Media-Saturn launches online strategy to fight losses

According to a press release, the decline in earnings was mainly due to a strong drop in like-for-like sales especially in Germany as well as investments to sharpen the price profile. Higher operating losses in France, start-up losses in China as well as higher expenses due to the further implementation of the multichannel strategy also affected the company‘s earnings.

The strategic realignment comprises the integration of the store-based business under the brands Media Markt and Saturn with respective online shops as well as the fast expansion of the Internet specialist Redcoon. Media-Saturn plans to accelerate growth by further acquisitions. “With the new corporate strategy, we have now paved the way for returning to our former earnings power,” said Horst Norberg, CEO of Media-Saturn Holding. “In this context, we will strongly focus on price and cost leadership.” As a leading company in brick and mortar consumer electronics retailing in Europe, Media-Saturn now also targets market leadership in Internet retailing with online sales of Euro 5 billion (US-$ 7.24 billion) by 2015. Customers of Media Markt and Saturn will have the opportunity to order merchandise online and then either have it shipped to their homes or pick it up at the store. According to the company, the customers are to perceive all brands of the Media-Saturn Group as offering the best value for money. Media Markt, for example, defined a product range of around 2,500 articles to be offered at identical rock bottom prices both in the Media Markt online shop and the local Media Markt stores. The company plans to launch the Media Markt online shop in Germany in January 2012, while saturn.de will go live in October 2011. To finance its low price strategy, Media Saturn has announced significant cost cutting measures including the elimination of 3,000 jobs.