Germany's main retailers' federation, BAG, warned Wednesday that after a weak first half, forecasts of domestic sales for the full year would have to be pared back, and the country's main department store chain announced a restructuring. BAG president Walter Deuss said in Frankfurt retailers' hopes of a recovery this year had not been borne out and it would take optimism to expect full year sales just to meet the level of last year. He said adjusted sales figures to June showed a drop of 1.2 per cent in both real and nominal terms. Deuss spoke as KarstadtQuelle, Europe's biggest combined department store and mail order operator, warned investors it would take a charge to cover the costs of "refocussing" but said it would withhold details till the end of September. The stockmarket-listed company reported it lost 298 million euros (358 million dollars) in the first six months, almost six times its business losses in the first half of 2003. The Essen-based group said sales sagged 6 per cent in the first half to 6.87 billion euros, and while there might be a lift in the second half, the company would end the year with a fallback of 4.5 to 5 per cent in sales. Its May forecast had been for a 3-per-cent fall. The KarstadtQuelle board said it would seek to stabilize sales and apply stringent cost management, which would have a one-off impact on earnings in the third quarter.
