An ongoing slump on its domestic market has led KarstadtQuelle AG, Europe's largest retail and department-store group, to report first-quarter sales down almost 5 per cent.

The group, which makes 90 per cent of its revenue on the German market, said first-quarter sales fell 4.9 per cent from the year-ago period. By the end of April the decline narrowed to 3.6 per cent.

KarstadtQuelle chairman Wolfgang Urban wants to raise pre-tax profit to 729 million euros by 2003. He plans to do this through a series of cost-cutting measures that include slashing employee benefits and selling units of its mail-order subsidiaries Neckermann and Quelle.

For 2001, KarstadtQuelle said its final figures were in line with expectations. Sales rose 4 per cent to 16.1 billion euros, while earnings before tax were up 26 per cent to 344 million euros.