Toronto-based Hudson’s Bay Company (HBC) will acquire the German department store operator Galeria Kaufhof from Düsseldorf-based Metro Group for €2.825 billion (US$3.185 billion). The deal is expected to close by the end of the third quarter.
Galeria Kaufhof operates 103 Galeria Kaufhof department stores and 16 Sportarena stores in Germany and 16 Galeria INNO department stores in Belgium. It’s Germany’s top department store company by market share, with annual sales of around $3.5 billion.
HBC will keep the current Kaufhof management in place; it will report to Richard Baker, Jerry Storch and Donald Watros in Toronto.
“This acquisition is a significant step forward in our plans to become a premier international retailer,” said HBC chief Storch in a statement. “With Kaufhof, we will operate eight leading banners in Canada, the United States, Germany and Belgium. Expanding our footprint into Europe with Kaufhof also provides us with a strong foundation to explore to explore additional opportunities for growth throughout the Continent.”
The combined company will operate 464 stores; HBC says that 44% of sales will comes from the U.S., 31% from Germany, 23% from Canada and 2% from Belgium.
“This is an exciting transaction that demonstrates our proven growth formula in action, and it is the right investment and the right time,” said HBC executive chairman Baker. “We have been carefully surveying the European retail landscape for many years for a potential expansion opportunity and have watched Galeria Kaufhof build on its exceptional real estate to become the #1 department store in Germany. We are excited to work with the Galeria Kaufhof management team to leverage our expertise, and we welcome Galeria Kaufhof to our portfolio of dynamic brands.”
HBC operates 90 Hudson’s Bay stores, 50 Lord & Taylor stores, 39 Saks Fifth Avenue stores and 83 Saks Off Fifth stores.