Karstadt stores to miss gross profit target - Spiegel

FRANKFURT, April 19 (Reuters) - Arcandor (AROG.DE: Quote, Profile, Research)'s Karstadt department store chain will miss its gross profit target for the fiscal year that ends September 2008, Spiegel magazine reported on Saturday.

Although the 129 Karstadt stores have been growing sales since January after a weak Christmas season, the division will not reach its goal of 148 million euros ($234.2 million) in gross profit for the fiscal year. Projections were for a gross profit of 110 million euros, Spiegel reported, quoting an internal company document.

A spokesman for the Anglo-German tourism and retail giant said he did not want to comment on specific figures. He added Arcandor would release an earnings forecast for the group at its shareholders meeting on Wednesday.

Overall, the company is performing above expectations, he said, adding that if a division was below expectations, another division's strong performance would compensate for that.

Arcandor comprises Thomas Cook, Europe's second largest tourism company, Karstadt and mail order group Primondo.

Spiegel also reported, quoting an Arcandor strategy paper, that the company was actively pushing for mergers and acquisitions in the department store sector.

Arcandor has said it sees benefits from acquiring Metro AG's (MEOG.DE: Quote, Profile, Research) Kaufhof department stores.

Spiegel reported there remains a possibility of a merger with a British department store chain or Spain's market leader El Corte Ingles.

Spiegel quoted Arcandor Chief Executive Thomas Middelhoff as saying; " We currently have several large transactions in the pipeline."

The Spiegel reported that Middelhoff gave no concrete details regarding merger plans. (Reporting by Rajiv Sekhri; Editing by Ruth Pitchford)