The chief executive of insolvent German retailer Arcandor said its department store business Karstadt could survive independently and may not need to merge with rival Kaufhof, a German magazine reported.

Arcandor filed for insolvency in June after its request for state help failed. Official insolvency proceedings are due to start on Tuesday and company sources have told Reuters that CEO Karl-Gerhard Eick will step down at about the same time.

Eick had been keen to find ways to prevent the group from being broken up but gave up the search for a new anchor shareholder earlier this month citing a difficult market environment.

Eick was quoted as saying by Der Spiegel that a merger with Kaufhof was not necessarily needed.

I'm deeply convinced that it is possible to run Karstadt profitably, Eick told Spiegel. But it would be necessary to give up unprofitable stores and cut costs further, he said.

Arcandor's insolvency administrator Klaus Hubert Goerg has already said that Arcandor's units -- Karstadt and the mail-order business Primondo -- could survive and that he was already looking for potential investors.

Karstadt's rival Kaufhof, which belongs to German retailer Metro, has already signalled it was interested in acquiring some Karstadt stores, but earlier talks between the two companies were unsuccessful.

(Editing by Mike Peacock)

Germany