Restructuring / Turnaround Strategies Case Study

KARSTADTQUELLE: The German Retail Giant's Restructuring Strategies

Abstract:
KarstadtQuelle, one of Europe's largest department store and mail order groups, represented 50% of the German market share in this business. In 2000, the company shifted away from general retailing towards more specialised sectors such as fashion apparel and sports to attract additional foreign customers. It further diversified into new businesses such as financial services, tourism and mail order. But mismanagement and weak consumer demand in Germany began hurting the company's core activities, resulting in severe structural problems and a collapse in earnings. To revive its fortunes, KarstadtQuelle began restructuring its operations.

Pedagogical Objectives:

• To discuss the reasons for the problems faced by KarstadtQuelle and the restructuring strategies it adopted to turnaround
• To discuss the challenges ahead for the retailing giant.

Keywords : KarstadtQuelle; German retail market; Europe's largest department store chains; Neckermann and Quelle brands; Reorganisation; Europe's largest mail order groups; Restructuring strategies; Restructuring / Turnaround Strategies Case Study; Discount chains; Family-run business; Diversification strategy; Pricing strategy; The 'Intercontinental Department Store Group'; Mismanagement; Competitive strategies; Turnaround