Embattled German retailer sees salvation in international expansion
KarstadtQuelle chief executive Thomas Middelhoff says the troubled German retailer is considering international expansion when its restructuring is complete at the end of next year, with London one of three locations topping the list.

Middelhoff believes that the company's department store concept can be successful in cities such as London, Paris and Shanghai, with a total of 15 international locations under consideration.

The company is planning far-reaching changes to the retail conglomerate from 2007 onwards, including re-evaluation of the structure of the group once operations and sales have improved at the three core divisions: mail order, department stores and tourism.

Middelhoff said at the end of next year the company will take stock and decide the direction for each of the three divisions. He insisted he was not planning a full break-up of the retailer should sales fail to recover, although he says he would consider a joint venture, merger or partnership within each of the three businesses.

In April, former chairman Dr Christoph Achenbach stepped down after his reconstruction programme failed to deliver for the deeply troubled group.

The retail arm has sold off specialist retail fascias and divested 75 of its poorly performing department stores to a consortium of British investors led by Dawnay, Day and Hilco. It has also gone into a joint venture with German grocer Rewe to run 73 of its food halls, in a bid to turn the company's fortunes around.

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