Ceconomy’s board of directors has approved the electronics retailer’s realignment. The structures of the group with its chains Media Markt and Saturn are to be standardized, as the control committee decided on Tuesday in Düsseldorf. Associated with this is the shedding of up to 3,500 jobs – according to earlier information mainly in other European countries.
The jobs are to disappear in the next 24 to 36 months and the talks with the employee representatives are to begin “promptly”, it said. Because of the collapse in shops in the wake of the corona pandemic, Ceconomy also wants to close shops. 14 stores are initially affected, further closures in Europe could be added to a limited extent. Overall, the company hopes to save just over 100 million euros per year. As of June 30th, Ceconomy had 45,000 full-time employees across Europe.
Uniform management structures
The focus of the reorganization would be uniform management structures and standardized processes and procedures across all countries, the SDax Group announced. Up until now, Ceconomy has been managed very decentrally.
The innovations apply to the administrative functions in the national companies as well as to the organization of the markets, it said. As a result, management expects greater efficiency and lower costs. MediaMarktSaturn will also harmonize management structures across Europe in the markets. A standard organization is to be introduced in each of the currently around 1000 stores.
Quick recovery after Corona
The branch closings are not entirely surprising. The electronics retailer is confronted with major problems due to the Corona crisis and also had to apply for state aid: In May, the company received a credit line from the state development bank KfW and a bank consortium amounting to 1.7 billion euros.
Media Markt and Saturn were able to quickly get back on their feet after the corona-related store closings. In May, the retail giant’s sales of 1.55 billion euros were again 3 percent above the previous year’s level. In June the sales figures of 1.75 billion euros exceeded the previous year’s figure by 12 percent.
Sales decline and loss in the third quarter
However, the balance between the sales channels in the group has shifted massively under the influence of the pandemic. The decisive part in the rapid comeback of the electronics chains was due to the success of the online business, which grew by around 145 percent between April and June and now accounts for more than a third of total sales. In contrast, many customers stayed away from the branches.
Overall, sales in the third quarter fell by 8.4 percent to around 4.1 billion euros, as Ceconomy announced. The decline is mainly due to the store closings in April and May. In July, the positive sales trend from June continued, thanks in particular to the reduction in VAT in Germany and continued strong demand for home office products, for example. The company’s liquidity situation has also improved, so that KfW’s credit line has not yet been used. The bottom line is the loss of the group in the third quarter amounts to 104 million euros. (With material from the dpa) /