Concern grows as Karstadt loses Premium Group head

Patrice Wagner was promoted to the position in 2006 when Karstadt, owned by Arcandor, announced it would transform its stores into luxury destinations to reverse the fortunes of the loss-making business.

Premium stores KaDeWe, Alsterhaus, Oberpollinger and some Karstadt stores were brought together to form the Premium Group. Sources close to the business also said that other senior management had left the Premium Group. Karstadt could not be contacted for confirmation as Retail Week went to press.

Wagner joined the German retailer more than six years ago. In a letter to colleagues and friends seen by Retail Week he said he was leaving the business to "address new challenges".

He wrote: "Department stores and luxury seemed to be two segments that would never combine in Germany. Thanks to your support, we have proven that this concept not only works in France, the UK or the USA but also could be realised with substantial success."
MHE Retail chairman Edward Whitefield said that his departure could indicate that the Premium Group had failed to show "green shoots". "It is unusual to leave after two years if things are going well. Two years is enough time to be sowing seeds of recovery. This shows the roots could have died in the ground."

Whitefield also warned that putting too much investment in a luxury positioning could be unwise, as the German retail market remains challenging. "It should have a designer architecture but not have all its eggs in one basket at this time when high earners are losing money on the financial markets," he said.

In its first quarter, which ran from October to December, Karstadt's adjusted sales rose just 0.1 per cent to 1.27bn (£1.19bn).