Neckermann plans job cuts

Neckermann, one of Germany's traditional mail order houses, is looking to cut more than half of its overall workforce, officials from the service-sector union Verdi reported on Friday. The union said 1,400 of the firm's 2,500 employees would be shown the door. Management confirmed the planned firing of 1,380 people.

"This is a social catastrophe, a real job cull," Verdi spokesman Wolfgang Thurner said in a statement.

He said most jobs would be cut at the company's headquarters in Frankfurt. Thurner, who is also on Neckermann's Supervisory Board, said the location's logistics center would be completely closed, according to management plans.

Neckermann will reportedly start negotiations with the staff council next week in a bid to make the planned cuts in as fair a manner as possible.

Old sales channels faltering

In 2011, the company moved into negative territory due particularly to its sluggish catalog-based business segment. Neckermann offers some 700,000 fashion, furniture and technology products. The firm secures almost 80 percent of its revenues through online sales, with some 90 percent of new customers being lured by its online sales portal.

Neckermann had announced that it would focus even more on its online segment in the future, while cutting back on its catalog-based activities.

Neckermann was founded in Frankfurt in 1950. In 1995, it became the first German mail order company to start an online business section of its own. Like its erstwhile rival, Quelle, it temporarily belonged to the Arcandor Group, which later went bankrupt. Neckermann is owned solely by US investor Sun Capital Partners.

hg/sms (dpa, dapd, AFP)