Canadian Hudson's Bay is the new owner of the German department store chain Galeria Kaufhof and its Belgian subsidiary Galeria Inno. The North American group will use the acquisition to start its European expansion.
Seller Metro wants to focus on Media Markt and Makro
Up until now, the German Metro group owned Galeria Kaufhof, but it has now chosen to focus on its remaining activities in Media Markt, Metro and Real. Kaufhof had been hit with the competition from online players like Zalando and Amazon, which had impeded its position.
Hudson's Bay, the oldest still active Canadian trade company dating back to 1670, will become the new owner. It owns the Saks Fifth Avenue, Lord & Tailor fashion chains and the Saks Off 5th outlet. The Austrian investor Rene Benko also tried to acquire Kaufhof, in order to merge it with Karstadt, but lost out to Hudson's Bay.
First European activity for Canadians
The Galeria Kaufhof's acquisition is its first European activity and will instantly add 50 % to its turnover. A third of its activities will now be located in Belgium and Germany. "We have been tracking Kaufhof since 2006", one of Hudson's Bay's board members once said.
It is expected the Canadians will have to focus more on omnichannel, something Metro failed to do for a long time. It will also transform several Kaufhof stores into Saks Fifth Avenue outlets.
Belgian CEO stays in power
Hudson's Bay will pay 2.825 billion euro and also consists of the group's real estate. The Canadians have also accepted several judicial risks while Metro gains a positive 700 million euro EBIT contribution.
It is expected the deal will be finalized by the end of 2015's third quarter and the buyers will keep Galeria Kaufhof's current management on board. Its main office will remain in Cologne and Belgian Olivier Van den Bossche (who had previously streamlined Inno's activities) will still be the CEO.