DUESSELDORF Germany (Reuters) - German retailer Metro is not interested in bringing together its Kaufhof department stores with the struggling Karstadt chain, its chief executive said.
“Karstadt is still absolutely not an issue for us,” Metro Chief Executive Olaf Koch told journalists at an event late on Wednesday.
Speculation has long swirled about a possible merger between the two former giants of German retail and flared up again this week after the chief executive of loss-making Karstadt stepped down after only five months in the job, hinting at a lack of support from the firm’s billionaire owner.
Karstadt was rescued from insolvency in 2010 by Nicolas Berggruen, but unions have accused him of not investing enough in the chain, allowing Kaufhof to take market share.
Department stores around the world have faced difficulties in recent years due to competition from e-commerce players like Amazon, prompting suggestions Kaufhof could buy Karstadt or a third party investor could buy and merge both chains.
While Metro has long said it would be prepared to sell Kaufhof for a fair price as it focuses on developing its cash-and-carry and consumer electronics businesses, Koch said he was under no pressure to sell Kaufhof as it was profitable.
“Kaufhof has great perspectives. We see growth, we see a need to modernize. We will continue to invest,” he said, adding that Metro would consider any reasonable offers for the business but there were currently none under consideration.
Kaufhof, which is celebrating its 135th anniversary this year, saw sales fall 0.4 percent in the first half of Metro’s fiscal 2013/14 year to 1.68 billion euros ($2.29 billion).
($1 = 0.7331 Euros)
Reporting by Nikola Rotscheroth; Writing by Emma Thomasson; Editing by Maria Sheahan