Arcandor, the German group formerly called Karstadt-Quelle, reported a net profit of €16 million after minority interests for the short new financial year from Jan. 1 to Sept. 30, 2007, thanks exclusively to the results of its tourism subsidiary, Thomas Cook, which delivered operating earnings before amortization and depreciation (EBITDA) of €709 million for the period.
No major improvement in profitability was recorded in Arcandor's retail business, although the critical Christmas season was not accounted into the figures. The Karstadt division, which includes its department stores and its Karstadt Sports specialty shops, ended up with a 5.3 percent lower EBITDA loss of €34 million. The mail-order and internet division, called Primondo, had a virtually unchanged EBITDA loss of €74 million. That doesn't include Neckermann, a mail-order operation in which Sun Capital Partners took a 51 percent stake last Dec. 21.
The consolidation of Thomas Cook, which Arcandor previously shared with Lufthansa, allowed the group to post a 72 percent jump in total revenues to €14.3 billion for the 9-month period. Primondo returned to growth with a sales increase of 4 percent to €2.89 billion. Karstadt achieved largely stable sales of 2.35 billion.
In the first quarter of the new year ended last Dec. 31, Primondo raised its sales by 2.9 percent due to good performance in foreign business, e-commerce and TV shopping as well as specialized retail operations such as the newly acquired board sports retailer Planet Sports. The Karstadt department stores and Karstadt Sports specialty outlets saw their sales slip by 8.4 percent in the important Christmas quarter. Arcandor argues that sales in the 2006 Christmas season had been inflated by a promotion and by the prospect of a hefty increase in the German VAT rate.
