ESSEN, Germany — Struggling German retailer KarstadtQuelle said Tuesday it plans to sell nearly half of its department stores and raise about $615 million through a share offering as it restructures in response to Germany's persistent retail slump.
The company said it also would sell its majority stake in a joint venture with coffeehouse chain Starbucks Corp., in addition to parting with its Runners Point, Golf House, SinnLeffers and Wehmeyer specialty outlets in an effort to concentrate on its core retail activities.
KarstadtQuelle said its restructuring plan includes cuts in social programs and vacation for employees, and added that it won't pay a dividend this year or next. The company gave no word on any job losses, but the employees' union said the changes would result in thousands of cuts.
"These steps are inevitable and also overdue," chief executive Christoph Achenbach told a news conference in the western city of Essen.
KarstadtQuelle has 181 department stores across Germany. As a first step toward selling 77 of the smaller stores, they will be transferred to a new company, the company said.
"The strong focus on the core businesses and the depth of the cuts is positive," said Christian Schindler, an analyst with the Landesbank Rheinland-Pfalz. He said the 2005 return to profitability forecast by Karstadt is a distinct possibility.
"Still, we must wait and see how successful KarstadtQuelle is in future competition," Schindler said.