KarstadtQuelle, Procurement, Outsourcing, Li & Fung
KarstadtQuelle sells procurement unit to HK's Li & Fung
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Europe's leading retail group KarstadtQuelle AG said it is selling its worldwide procurement unit KarstadtQuelle International Services AG to Li & Fung Ltd in an agreement that will see the Hong Kong company become its purchasing agent.
A KarstadtQuelle spokesman said the sale price for the retailer's unit is a 'low three-digit million euro' level.
The unit, whose 1,100 employees will be absorbed by Li & Fung, handles all procurement for the company's department store businesses as well as for mail-order units Quelle and Neckermann.
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KarstadtQuelle's statement yesterday said Li & Fung will handle an annual total of about EUR 2 bln worth of procurements for the company.
The outsourcing deal allows KarstadtQuelle to cut purchasing costs by up to 10 pct and for the German retailer to pay its orders in 120 days instead of the current 20-day payment deadline.
According to KarstadtQuelle's CEO, Thomas Middelhoff, "We are entering a new phase of our restructuring with the goal of significantly improving our operating performance."
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