Castro and Otto will jointly own Castro Deutschland, in which €20 million will be invested over the next five years.
Castro (TASE:CAST) today signed an agreement with Otto Group subsidiary Heinrich Heine GmbH to establish a chain of 80 stores in Germany under a jointly-owned company called Castro Deutschland. 40 men and 40 women's fashion stores will be founded over the next five years. Castro Deutschland will begin operations in April 2004 and the first stores will open in September. Israel Castro and Roter families control Castro.
Otto will own 51% of Castro Deutschland and Castro 49%. Under the plan six stores - three for men's fashion and three for women's - will open in September 2004.
Castro chairman Gabi Roter said today that €20 million would be invested in the joint venture over the next five years. "Castro will invest €5 million of this amount in Castro Deutschland as equity and an owners loan." He added that Castro Deutschland was expected to reach the same sales turnover as Castro's current turnover in Israel.
The German antitrust authority must approve the deal.
Castro has 45 stores and 36 men's fashion stores in Israel.
Published by Globes [online] - www.globes.co.il - on November 9, 2003