July 5 (Bloomberg) -- Shares of KarstadtQuelle AG, the German department-store operator led since June by a new chief executive, rose as much as 2.1 percent after the company said it will shed 4,000 jobs at its main business by 2006.

The shares climbed 37 cents to 17.91 euros, the day's highest price, at 9:20 a.m. in Frankfurt. That pared this year's loss to 8.6 percent and gave the company a market value of 2.10 billion euros ($2.57 billion).

The job cuts, which comprise about 8.5 percent of the Essen, Germany-based company's total work force, are in response to falling demand as KarstadtQuelle confronts its third straight year of dwindling sales. The cuts were ``necessary to save costs,'' spokesman Joerg Howe said Saturday in an interview.

The cuts will help KarstadtQuelle, Germany's biggest department-store company, to save 145 million euros in two years, Howe said.

Chief Executive Christoph Achenbach was named to replace Wolfgang Urban in May in an effort to step up the company's overhaul. An unemployment rate of more than 10 percent is deterring German consumers from spending and hampering an economy that's barely grown since 2001.

To contact the reporter on this story: Patrick Donahue in Frankfurt at at pdonahue1@bloomberg.net.

Last Updated: July 5, 2004 03:24 EDT