Karstadt eyes department store merger, IPO

By Rajiv Sekhri

LONDON (Reuters) - KarstadtQuelle KARG.DE could merge its department store division with a rival as a prelude to a separate stock market listing for the unit within 18 months, Chief Executive Thomas Middelhoff told Reuters on Tuesday.

"(What) we did in tourism with Thomas Cook, we could easily do with our department stores," Middelhoff said. "Like we had the consolidation of assets in our tourist business, I tell you I believe the same is going to happen in the department store business."

By the time he leaves KarstadtQuelle at the end of 2008, the department store arm could have merged with another player in the sector and could be spun off or listed, he said at the Reuters Consumer and Retail Summit in London.

Thomas Cook (TCG.L: Quote, Profile, Research, Stock Buzz) bought British package holiday firm MyTravel in February. The combined tourism company listed on the London Stock Exchange on Tuesday and its shares closed unchanged at 333 pence.

OPENING IN RUSSIA

Middelhoff said he planned to open a premium department store in Russia as early as this year, modeled on the company's KaDeWe flagship store in Berlin.

"We are in very advanced negotiations in St. Petersburg, we have negotiations going on in Moscow and we are considering Istanbul and Dubai," Middelhoff said, adding that a decision on St. Petersburg could come as early as this year.

He expects KarstadtQuelle to have 7-8 premium stores abroad, each garnering annual sales of 150-200 million euros ($201-268 million).  Continued...