Oct. 28--Ian Schrager Hotels may open a third London hotel at Selfridges' flagship store on Oxford Street. The American company, whose signature London hotels are the Sanderson and St Martin's Lane, has been approached by the department store group, which is drawing up plans to redevelop its store in the capital. 

Ian Schrager, chairman and chief executive of the hotel company, is considering the offer, although informal talks have also been held with other operators. 

The Selfridge hotel is operated by Thistle, but its lease expires this year. The retailer wants to attract a four- or five-star operator to reinforce its upmarket image. 

Schrager's hotels are popular with the world's jet-setting elite. The company has a 50-50 joint venture with property company Burford, in which Burford owns the European hotels and Schrager manages them. 

The hotel is being redeveloped as part of a UKpound 250 million plan to expand retail space at Selfridges' 1.1 million sq ft store. The proposals include new office space and luxury apartments. The project will also provide Selfridges with a new food hall. The department- store group is in talks with Westminster council about the proposals and intends to submit a detailed planning application before Christmas, but the scheme is sensitive and discussions are at a crucial stage. 

Selfridges' development partners, property companies British Land and Stanhope, originally wanted a 20-storey tower block at the site, but planners were unhappy with the idea. The company is likely to apply for permission for a smaller block. 

Schrager opened the legendary New York club, Studio 54, in the 1970s with partner Steve Rubell, who has since died. The club closed in 1980 after the two men were jailed for tax evasion. 

Schrager sold the club to a hotel owner, taking possession of a run-down New York hotel when the buyer defaulted on the payment. His company now owns several landmark hotels in America and Europe. 

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