KarstadtQuelle does over 90% of its business within Germany

Christoph Achenbach took on the task of restoring the firm's fortunes after it lost its previous boss amid financial problems.

But plans to speed recovery with asset sales have flagged and the retailer is expected to report a loss.

Mr Achenbach is to be replaced by the firm's chief financial officer, Harald Pinger, on a temporary basis.

Change of approach

Mr Achenbach lasted less than a year in the top job

The company said Mr Pinger would take on Mr Achenbach's role "until a replacement could be found".

Analysts said that despite some sell offs, the company is involved in too many areas, including retailing, travel and banking.

But one analyst suggested the change of chief executive could make it easier to sell Thomas Cook, of which it owns 50%. "Achenbach wanted to wait two years to see the success of the restructuring at Thomas Cook," said Volker Bosse, an analyst at HVB.

"But if there's a bidder who will pay a very good price, they could sell it tomorrow."

KarstadtQuelle's results for 2004 are due out next Tuesday and analysts polled by Reuters expect it will post a 1.4bn euro (�0.96bn; $1.81bn) net loss, partly due to costs associated with its restructuring programme.

The retailer's results are also expected to show it is suffering from sluggish consumer demand in Germany, which accounts for more than 90% of its sales.

It will also face greater competition in future because fashion retailer H&M of Sweden is planning to open more new stores in Germany than in any other country.

KarstadtQuelle's shares rose 0.14 to 7.96 euros by Thursday's close.