Praktiker presents restructuring package

Germany’s ailing Praktiker group of companies has announced a far-reaching rescue package. Praktiker and Max Bahr, the two sales channels in Germany, are both to be retained. The group has already cut back its board and changed the division of responsibilities. Michael Arnold, previously in charge of international business, location management and human resources, and Pascal Warnking, formerly responsible for business in Germany, have stepped down. With immediate effect Thomas Fox, who has been running the group since the beginning of October, will be responsible for the entire operational business at home and abroad. Human resources and location management are in the hands of Josef Schultheis, who has been on the board as chief restructuring officer since mid-August. Markus Schürholz remains responsible for the financial sphere, in addition to IT and logistics. The group’s central office is to move from Kirkel to Hamburg, where Max Bahr is already headquartered. Category management and purchasing for both sales channels will be combined in one operational unit. In the future there will be 300 employees working for Praktiker in Hamburg, while some 170 jobs are to remain with subcontractors in outsourced divisions (payroll accounting, IT and accountancy) in Kirkel. Previously Praktiker had a staff of around 700 at the Kirkel central office. Over and above this the group is streamlining its portfolio of stores at home and abroad. Next year some 15 per cent of the current total of 236 outlets in Praktiker’s German network are to come under scrutiny to see if there is any long-term prospect that they will cease making a loss. Praktiker also intends to negotiate with the owners of the chain’s stores on the subject of “market-conforming rental terms and conditions”, according to a press release. Stores are also being closed abroad. Praktiker is going to withdraw from Albania, where the company has been operating for two years now, and from Ukraine, where it currently has five stores. In Germany Praktiker is to continue to follow a two-brand strategy and intends to sharpen the image of the two brands. At Max Bahr the group wants to expand the range of services available there. The Praktiker brand is to be positioned even more strongly as a discounting DIY store with a basic customer guidance system, a simplified price, quality and brand structure, widespread availability of the “Praktiker” own label and conformity of shelf prices. Overall the group plans to invest some € 300 mio in the modernisation of its stores and improvement of the product offer over the next three years. By contrast, the restructuring measures, which also include cancellation of the company’s advertising contract with the former tennis idol Boris Becker, are expected to result in annual savings of some € 100 mio.