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Eckhard Cordes said there was private equity interest in Kaufhof while other people familiar with Metro’s plans said the group might look to retain a minority stake in the event of a sale.

“The assumption we are working on is that Kaufhof should be sellable in 2010 – unless the financial world breaks down again,” Mr Cordes told the Financial Times.

Mr Cordes has previously refrained from setting out an expected timeframe for selling Kaufhof, which has in effect been up for sale for at least two years. Metro’s hopes of a deal to sell Kaufhof earlier were dashed by the financial crisis.



Mr Cordes said that “financing should now be available” for private equity groups, which he said had shown interest in a deal. “We have had regular contact with private equity firms [since 2008]. Everyone has said: ‘We want you to know that once markets come back we are interested’.” However, he said it was “not the case” that formal talks were taking place with potential buyers.

Any sale process involving Kaufhof, which had 126 German stores at the end of the year, may also have an influence on plans by the administrator of Arcandor, the insolvent German retail and travel company, to sell its Karstadt department store subsidiary.

Arcandor’s administrator wants to sell Karstadt in its entirety by the end of April and has also cited interest from private equity buyers. Mr Cordes believes potential buyers would be more interested in adding a selected number of Karstadt’s 120 stores to the Kaufhof business – something Metro has previously shown interest in.

People familiar with the sale plans expect some private equity groups to consider a deal involving both Kaufhof and Karstadt assets. “The business combination of Kaufhof and parts of Karstadt makes sense in the appropriate form. That is not new. It continues to make sense,” Mr Cordes said.

Kaufhof earned €119m ($160m) before interest and tax in 2009, from sales of €3.5bn, improving margins slightly. Mr Cordes said there would be “no fire sale”.



Metro – which earned €2bn before interest and tax from sales of €65bn – also owns an eponymous cash and carry chain, the Real hypermarket chain and the Media Markt and Saturn electronics store group. In contrast to Kaufhof, these are more international businesses that Metro believes have better growth prospects.

Since taking charge of Metro in 2007 Mr Cordes – previously best known as a Daimler executive – has also said he wants to improve or sell Real, which has more than €11bn of annual revenues but where margins remain much lower than targeted.

Mr Cordes said Real’s improvement was “exactly on plan”, and that it was “absolutely open” as to whether the chain could be sold.

Metro remains in the middle of a cost-cutting and efficiency improvement plan called Shape 2012, which Mr Cordes said had “made good progress”. The programme should contribute €300m towards profit this year on top of €200m last year, Mr Cordes said this month.

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