KarstadtQuelle AG: Li & Fung assumes worldwide import
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The issuer is solely responsible for the content of this announcement.
Essen/Germany, May 20, 2006. The KarstadtQuelle Group intends to strengthen
the operating performance of its retail segments by optimizing its global
import organization. The objective is a considerable gain in efficiency,
higher flexibility and significant cost reductions.
With this target, KarstadtQuelle AG and Li & Fung Ltd., Hong Kong, one of
the largest procurement service providers worldwide, signed a letter of
intent (LOI). In the future, Li & Fung will assume worldwide import for the
KarstadtQuelle Group. In the process, imports are to be bundled with the
aim having an order volume of more than €2 billion managed by Li &
Fung. From this realignment, KarstadtQuelle expects a reduction of purchase
prices of up to 10% and a reduction of working capital within the group by
approximately €500 million, driven by a considerable extension of
terms of payment. Furthermore, process costs within the organization should
be reduced and the efficiency of the procurement processes considerably
The LOI also provides the divestment of KarstadtQuelle International
Services AG, St. Gallen, with a total of some 1,100 employees, to Li &
Parallel to this the KarstadtQuelle Group, Europe’s largest textile
retailer will establish design centers in Europe and Asia within the next
few months. The objective is to achieve a more active procurement process
and considerably increase the number of collections.
Essen/Germany, May 20, 2006
The Management Board
Issuer: KARSTADT QUELLE AG
45133 Essen Deutschland
Phone: +49 (0)201 727-9816
Fax: +49 (0)201 727-9854
Listed: Amtlicher Markt in Berlin-Bremen, Frankfurt (Prime Standard),
Hannover, Düsseldorf, Hamburg, München, Stuttgart
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