KarstadtQuelle's Empire

Department stores Karstadt KarstadtSport Wertheim Hertie KaDeWe Alsterhaus Catalogues Quelle Neckermann Tourism 50% of Thomas Cook JMC Club 18-30 Skiers World Vrij Uit Condor Airline

Earnings from its retail outlets rose 5.6% to 8bn euros but its mail order business earnings were steady, coming in at 7.7bn euros versus 7.6bn in 2000.

The firm is restructuring its ailing catalogue, which posted a third quarter loss of 26.5m euros despite rising sales.

Insiders claim the group has also managed to reduce supplier prices by roughly 1%.

According to some market reports, investors are expecting the company to predict profit growth of between 35% and 40% for both 2002 and 2003.

In November, KarstadtQuelle slashed its full-year sales forecast to 4% from an earlier 7% as economic gloom weighed on retailers.

Retail Empire

The group emerged in 1999 when Karstadt acquired Europe's second largest mail-order business, Quelle.

With 110,000 employees, the group's department stores, with the famous Berlin's KaDeWe among them, account for 36% of the German market.

The group also owns wholly or partly several tour operators, financial companies, real-estate agency, charter airline and insurance companies.

Shares in KarstadtQuelle, which are listed on Germany's MDAX segment for mid-cap stocks, gained 33% during the course of 2001.

On Thursday shares were traded flat at 43.10 euros by, while the Dow Jones pan-European retail index fell 0.2%.