Karstadt set to reap unexpected profit

The beleagured high-street department store Karstadt has shown itself to be a more stable business than previously thought, with insolvency commissioners expecting a profit this year.

Karstadt set to reap unexpected profit
Photo: DPA

“Things are going significantly better than planned,” insolvency commissioner Rolf Weidmann told financial weekly Wirtschaftswoche on Saturday.

According to the magazine’s report, Nicolas Berggruen, the German-American investor currently overseeing the restructuring of Karstadt, is building on a stronger business model than previously diagnosed.

Weidmann is expecting a stable turnover and a profit margin in the tens of millions for the current business year, which ends in September. In the year before the insolvency declaration of June 2009, Karstadt had recorded a loss of around €120 million.

Earlier appraisals by potential bidders had predicted a profit of €39 million, before interest, taxes and allowance for depreciation. Now figures of between €45 and €60 million are being mooted internally.

The improved prognosis is attributed to a combination of production cuts in the restructuring plan, a good Christmas shopping season, and extra World-Cup-related sports equipment sales.

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German Amazon workers strike on ‘Black Friday’

Amazon workers in Germany started a three-day strike Thursday timed to disrupt the online retailer's "Black Friday" sales bonanza.

German Amazon workers strike on 'Black Friday'
Signs for the Amazon strike in Leipzig. Photo: DPA

The strike, called by the powerful Verdi union, is set to last until Saturday and marks the latest escalation in a years-long battle with Amazon for better pay and working conditions.

“We estimate that around 2,500 people went on strike today, a higher number than in similar actions in the past and given the difficult circumstances caused by the pandemic, it's a big success,” a Verdi spokesman told AFP.

To limit the risk of Covid-19 infections, the union said it was not staging any rallies during the strike.

Amazon in a statement said the walkouts were not affecting customer deliveries since “the majority of employees are working as normal”.

The stoppage affected Amazon distribution facilities in Leipzig, Bad Hersfeld, Augsburg, Rheinberg, Werne and Koblenz.

Verdi has long wanted Amazon to sign on to regional wage agreements covering retail and e-commerce, and has organised numerous walkouts in recent years.

It also wants Amazon to improve health and safety at work, accusing the retail giant of not doing enough to protect staff from the coronavirus at some of its German sites.

Amazon defended its policies, saying it offered “excellent” wages, benefits and career opportunities in a “modern, safe” work environment.

The company employs more than 16,000 people in Germany and has taken on an additional 10,000 seasonal employees to cope with a boom in online shopping triggered by the pandemic.