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The Sakal group is in talks with several parties about possibly bringing in a new strategic partner, Haaretz has learned.

Sakal also is involved in talks concerning a possible merger between group company Sakal Electric and Traklin Hashmal, while the firm has closed shop at Haifa's Castra mall, where it has rented stores totaling 1,400 square meters.

"Sakal is in negotiations with several parties to bring in a strategic partner to the group, and will announce in due course if there is something to announce," a Sakal spokesman said yesterday.

Chairman of the Sakal Group, Solly Sakal, reportedly has been looking to merge three group companies - Sakal Duty Free, Sakal Sport and Sakal Brothers - into one firm that would be two-thirds owned by Solly Sakal, and one-third owned by Meir Sakal.

Solly Sakal has noted that annual group sales are at $300 million, and that turnover at its duty free store in Ben-Gurion Airport accounted for 60 percent of the group's total in 2000. Sakal Electric, he added, recorded 25 percent of the amount of sales of Sakal Duty Free, while Sakal Sport contributed a quarter of all group revenues. Sakal Sport is Israel's distributor of several international brand names including Reebok, Nine West, Donna Karan New York and Timberland.

Sakal Electric operates 23 outlets, while Traklin Hashmal has 40 stores. In the electric goods sector, it is estimated that Traklin has annual sales of NIS 300-350 million, while Sakal Electric has annual revenues of NIS 190 million. Other sector sources believe the estimate is high and that Sakal has far less turnover.

"As of now, there is nothing [to report]," Shaul Zilberstein, owner of Traklin Hashmal, said yesterday "When there is, we'll let you know."

Sakal has paid $12 per square meter for several stores it has been running in the Castra mall. A group spokesman said that after three years of operating at the mall, the group had decided not to extend their rental option and it will close its outlets there next month.

"The Castra arts center is using Sakal's exit as an opportunity to divide the space and rent to artists that will produce on-site," said Erez Harpaz, manager of the Castra mall, adding that the mall will return to its main objective. "Most of our space is rented, and there are negotiations concerning the rest."