Arcandor, operator of department store chain Karstadt and home shopping group Primondo, is to restructure its business at a cost of €900m (£800.4m) over the next five years.

Karstadt will form part of a new management board-level division called Atrys. Arcandor aims to save 5 per cent of its €7bn (£6.23bn) purchasing budget within two to three years and wants Atrys to reduce negative cash flows by €300m (£266.8m). Core profit margin targets were set at 6 per cent for Karstadt and 7 per cent for Primondo.

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