UPDATE 1-Metro boosts Media-Saturn focus with new board member

Tue Feb 5, 2013 7:35am EST

* Pieter Haas to become fifth member of Metro board

* Metro says reflects Media-Saturn standing as core unit

* Media-Saturn shareholder says move weakens unit

* Sales up 1.8 pct to 21 billion euros in 2012 (Adds statement from Kellerhals, share price)

FRANKFURT, Feb 5 (Reuters) - German retailer Metro has created a new management board position with responsibility for its Media-Saturn chain of consumer electronics stores to reflect what it sees as one of its most important businesses.

Pieter Haas, currently chief operating officer of Media-Saturn, Europe's largest chain of consumer electronics stores, will become the fifth member of the management board in the second quarter, Metro said on Tuesday.

Haas will be charged with improving the fortunes of Media-Saturn, which was late to set up online sales and which last year had to cut prices at the expense of margins to better compete with online rivals.

Decision-making at Media-Saturn has also been hampered by frosty relations between Metro management and Erich Kellerhals, the chain's billionaire founder who still owns a blocking minority of around 22 percent in the unit.

In a sign of the strained relations, Kellerhals's investment vehicle Convergenta said Metro had acted without its agreement.

"This takes away operational know-how from the Media-Saturn management team and weakens the company," a spokesman for it said. "However, Metro has at least finally agreed to our wish for more bitterly-needed retail expertise in the board of Metro."

Metro said Haas will still continue to work closely with Media-Saturn management.

Metro also runs cash and carries, hypermarkets and department stores, but has said it wishes to focus investment on cash and carry and consumer electronics stores, which it feels have better prospects given their size and international standing.

"Media-Saturn is and remains a core business of Metro - this now also reflects accordingly in the structure of the Management Board portfolio," said Metro supervisory board chairman Franz Markus Haniel, who represents Metro top shareholder Haniel.

Metro's shares were up 0.9 percent at 22.58 euros at 1215 GMT, outperforming a 0.3 percent gain for German medium-sized companies.

Media-Saturn reported sales of 21 billion euros ($28.5 billion) for 2012, an increase of 1.8 percent on 2011. Metro will release full details of 2012 earnings on March 20.

($1 = 0.7376 euros) (Reporting by Victoria Bryan and Matthias Inverardi; Editing by Mark Potter)