HBC’s German chain to merge with rival: sources
BERLIN A top German BERLIN store chain owned by Hudson’s Bay, Kaufhof, has agreed to merge with its largest competitor, Karstadt, several sources said.
It is the latest change to the retail sector brought by fierce competition from e-commerce players.
Hudson’s Bay, which bought Kaufhof in 2015, has agreed to a joint venture with Austria’s Signa Holding, which owns Karstadt and will own 51 per cent in the new business, to be led by Karstadt boss Stephan Fanderl, the sources said.
The two sides had confirmed in July that they were in talks for a deal when sources said Hudson’s Bay was likely to receive close to 1 billion euros ($1.53 billion) for the transaction.
The merger would result in around 5,000 of the 20,000 jobs at Kaufhof being cut, newspaper Sueddeutsche Zeitung reported, adding that the remaining employees would face pay cuts. Karstadt employs around 15,000 staff.
Cuts are expected at the headquarters of the two groups, as well as in logistics and sourcing, sources had told Reuters.
The deal comes as booming online retail has undermined the business of many department stores.
Hudson’s Bay had hoped to make Kaufhof the centrepiece of an expansion into Europe, but the company is battling its own losses and faced a campaign from activist investors to boost its share price by extracting value from its real estate holdings.