* Metro in talks with potential investor HTM Group
* Expansion plans centred on Russia, Turkey, China
(adds details, background, analyst comment)
FRANKFURT, Oct 29 German retailer Metro
(MEOG.DE) said on Friday it was evaluating options for the
future of its Media-Saturn Group stores in France, one of which
was to sell some or all of them to investors.
The world's No. 4 retailer this month opened its first
Saturn store in Russia, runs the Cash & Carry, Media Markt and
Saturn brands, and in May opened its 250th Saturn store
worldwide in the French city of Lyon.
Metro said it had started talks with potential investor HTM
Group, adding other options included a strategic partnership and
the development of new growth strategies.
Media Markt and Saturn head Roland Weise said the group,
Europe's biggest electrical goods retailer, intends to focus
more on countries where its business is growing rapidly and
where it has the potential to become market leader.
In France, he added, this would only be possible through
"disproportionally high effort".
"The French business was never a star performer and was even
loss-making," Commerzbank analyst Juergen Elfers said, adding
this was a clear sign to investors it would "get it right or
quit" to ensure profitability.
"It is a positive sign as it shows that management is not
willing to compromise."
RBS analyst Justin Scarborough said: "France is a very
difficult marketplace," adding he welcomes the fact the company
is considering its options, saying it underscores Chief
Executive Eckhard Cordes' commitment to capital discipline.
Saturn stores have sprung up in Greece, Luxembourg, Turkey
and Switzerland over the past two years. Weise said that Russia,
Turkey and China are central to the group's "capital-intense
In August, Metro -- which has more than 2,100 stores in 34
countries in Europe, Africa and Asia -- lifted its capital
spending budget for this year to 2.1 billion euros ($2.92
billion) from 1.9 billion, but said it is still cost-cutting to
boost profits amid sluggish sales.
A Reuters poll of 10 analysts forecasts that Metro's
earnings before interest and tax (EBIT) rose by 18 percent in
the third quarter. It reports earnings on Nov. 2.
Metro shares were down 2.13 percent at 0902 GMT,
underperforming Frankfurt's 0.3 percent weaker DAX index
(Reporting by Josie Cox and Matthias Inverardi, additional
reporting by Mark Potter in London; editing by David Hulmes)