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Karstadt owner to join forces with rivals

Arcandor, the owner of Germany's Karstadt Premium department stores, said that Italian department store chain La Rinascente and French department store Printemps had agreed to take cross stakes in each others operations, to create a European super group.

Arcandor said the strategy aimed to create, "a unique European department store portfolio and to leverage the high synergy potential."

Historically, European department stores have tended not to venture outside of their core market. However following its acquisition of La Rinascente, Italian group Borletti bought Printemps, giving it stores across Italy, Spain and France.

The new venture will see a RREEF/Borletti consortium take a stake of up to 25% in Karstadt's premium operation. Karstadt may also take a 25% of the La Rinascente and Printemps department store groups.

Karstadt Warenhous chairman Peter Wolf is reported to have said: "The premium segment still has great growth potential both throughout Europe and beyond. Together with our partners, we will rapidly expand the Premium Group further, ultimately setting a clear market leadership in Europe's luxury segment."

Karstadt Premium has stores in Berlin, Hamburg and Munich. A fourth Karstadt store in Frankfurt is being redesigned to fit the Premium concept.

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