HBC creditors greenlight Karstadt, Kaufhof tie-up

Hudson's Bay Company and SIGNA have agreed to merge Germany's largest department store chains Galeria Kaufhof and Karstadt, bringing negotiations to an end that begun last year after the Canadian retailer received a bid from its Austrian peer.

Both sides were still in talks in July, when Reuters reported that a tie-up of the retailers would see SIGNA holding a 51% stake and HBC receiving close to €1 billion under the terms—a much needed capital infusion for debt-laden HBC, which has been trying to offload some of its real estate holdings.

Merging the two companies is likely to result in job losses, with German media reports suggesting that as many as 20,000 jobs might be on the block, in addition to salary reductions for the remaining employees.

Both companies have a presence in Germany's largest cities—Kaufhof runs 96 stores, while Karstadt has 80—which could result in store closures to reduce the overlap, while also cutting costs by combining both logistics and sourcing.

News & Analysis

Related content