FRANKFURT, May 28 (Reuters) - A consortium led by restructuring and liquidation specialist Gordon Brothers is interested in parts of insolvent German department store chain Woolworth, a source close to the matter told Reuters.

Gordon Brothers Group

The consortium was eyeing around 130 small stores out of the total 311 and had already been in touch with administrator Ottmar Hermann, the source said on Thursday 28 May.

A spokesman for the administrator declined to comment.

Woolworth, owned by British investor Argyll Partners, ran out of cash in April after struggling with falling sales as supermarkets, discounters and other specialist retailers snatched away customers.

Administrator Hermann last week asked Woolworth's staff to join a temporary training company from which future investors could then hire.

Retailers Tengelmann, Rossmann and DM have also expressed interested in Woolworth stores, according to media reports.

Store closures are on the cards but the administrator's spokesman declined to say how many.

Other German department stores are also facing problems -- Hertie filed for insolvency last year as did SinnLeffers and Wehmeyer, all of which once belonged to tourism and retail group Arcandor (AROG.DE) when it was still called KarstadtQuelle.

Arcandor itself is now also fighting for survival.

U.S. retailer F.W. Woolworth founded its German subsidiary in 1926 and opened its first store in the northern German city of Bremen in 1927. The unit split from its parent in 1998 in a management buyout and since 2007 has been owned by Argyll Partners.

Woolworth employs about 9,000 in Germany and generated about 900 million euros ($1.3 billion) in sales in the year ended October 2008.

Woolworth's insolvency came months after Britain's Woolworths -- also an offshoot of the former U.S. retailer -- went into administration in November. (Reporting by Eva Kuehnen and Alexander Huebner; Editing by David Holmes)