Karstadt Reports Structural Over-The-Counter Sales Drop

DUSSELDORF/ESSEN, Germany (November 17) - In its third quarter, which ended on September 30, Karstadt saw its over-the-counter retail sales decrease 6.3%. Karstadt-Quelle group showed a sales rise of 0.3%. Mail order grew by 7.5%. Group earnings before tax totaled € 54 million in the third quarter. In the first nine months of 2002 the KarstadtQuelle Group achieved sales of € 11 billion, a 2% decline (after minus 3.1 per cent as of June 30, 2002). Group earnings (EBT) stood at - € 293 million after nine months (2001: - € 99 million). This figure results from both the generally weak retail business for large-format suppliers in inner-city locations and the seasonality in Over-The-Counter retail. Earnings for the current year are burdened by extraordinary flexibilisation costs, due to payments for settlements and part-time work for retiring staff of 94 million euros. "We look forward to Christmas business with cautious optimism", said Karstdt-Quelle Chairman Wolfgang Urban. For 2002 a sales decrease of 3% and € 250 million gross profit are still anticipated. A short-term revival in consumption is not to be expected. The disposable income of the consumer in Germany will decrease in 2003. (FN)