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There may be an alliance in the making between the two largest German department store chains. Canadian Hudson’s Bay, owner of Kaufhof, is in talks with Signa Holding, which acquired Karstadt in 2014.
Joint venture
At the beginning of this year Signa Holding, the investment fund of Austrian businessman René Benko, made a 3 billion euro offer for Galeria Kaufhof, the largest department store group in Germany. At that time, Hudson’s Bay found the bid too low.
According to insiders, both parties are now talking about a joint venture, with Karstadt taking a 51% in Kaufhof (with an option for a full acquisition later) and also buying half of the real estate. A deal could be closed in the coming weeks. On the German market, this would lead to a remarkable alliance between two direct competitors, who are also located close to each other in many cities – leading to a fear of store closures and layoffs.
Hudson’s Bay is struggling, especially in Europe, and is working on a repositioning to be better armed against the growth of e-commerce. In the US, the group sold its outlet web shop Gilt to competitor Rue La La and closed various branches of its American chain Lord & Taylor. The retailer is also tackling its cost structure in Europe.
