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The German shopping landscape has long been characterised by giant chains of department stores such as Karstadt and Hertie. Now, however, as the first of these two contemplates job cuts which could rise as high as 10,000, it seems that what has until now been a core element of the country's shopping streets and malls could be living a rapidly-accelerating death.

Karstadt: hard times

 
Even Chancellor Schroder, says the newspaper Die Welt, has been criticising those in charge of the store chains, stating in a recent interview that Karstadt-Quelle had exhibited "the worst kind of management failures".

That attitude, Die Welt says, shows that what is currently Europe's largest department store chain can expect little sympathy - or financial help - from the government. Schroder's criticism was aimed more at former executives than the current management team, who are accused of failing to spot changing lifestyle trends, getting sidetracked by niche activities and generally having bought, merged and managed a number of acquired companies poorly. "We danced at too many marriages for too long", the current boss, Christoph Achenbach, poetically suns up Karstadt-Quelle's plight.

But even as Achenbach draws up his plans to save at least part of the enterpries, some experts are asking whether the department store concept itself truly has a future. "The life-cycle of these stores", says Joachim Zehntes, professor of retail management and marketing at the University of Saarbrücken, "is clearly coming to an end. The concept of 'everything under one roof' is no longer a contemporary one. All Achenbach can do is put off what eventually has to happen".

James Bacos, retail expert at the management consultancy, Mercer Management Consulting, is equally pessimistic, Die Welt says. "I don't think Karstadt will go bust", he tells the paper, "but up till now it's been going in the completely wrong direction. In Germany, the things that work are either the very cheap or very expensive. Because Karstadt chose to exist in the middle ground, department stores have become a real accident case".

Should the Karstadt brand disappear - like Hertie, Horten and Kaufhalle before it - apart from a few Woolworth stores, only the Metro-owned Kaufhof would remain to represent the sector. And even Kaufhof is performing poorly, even if its fresher concept compares favourably to that of Karstadt.

"Even the Kaufhof people have got a lot of locations that they simply can't do anything with", says Joachim Zehntes. The problem? Internationally-active clothing chains, electrical discounters, drugstores and DIY outlets have sucked away the traditional customer base of department stores as a result of their clearer positioning.

Department store owners, Die Welt says, simply have not come up with concepts to counter the perception that such chains offer goods of acceptable quality at very attractive prices.

Click on the link below (left) to read a fuller version of this story for yourself, in German, on the website of Die Welt. Alternatively, click on the link below (right) to visit the site of the 'German patient' Karstadt...  while, it appears, stocks last.