Joint Venture to include Galeria Inno, Hudson’s Bay Netherlands and Saks OFF 5TH Europe
Cologne/Essen, 11. September 2018 – Galeria Kaufhof GmbH and Karstadt Warenhaus GmbH, two iconic German banners, will join forces to create a stronger retail company. The strategic goal of the joint venture is to make the new entity fit for the future and to develop one of the leading omnichannel retailers in the digital age. The joint venture offers numerous opportunities, including more efficient processes, a broader product assortment, innovative retail formats, and well-performing online platforms.
“MERGER OF EQUALS”
SIGNA and HBC will form a new retail company, which will include Galeria Kaufhof GmbH, Karstadt Warenhaus GmbH, the entire retail business of HBC Europe (Saks OFF 5TH, Galeria Inno in Belgium, Hudson’s Bay in the Netherlands), as well as Karstadt Sports and the entire food and catering departments of both companies (Dinea, Galeria Gourmet, Karstadt Feinkost, Le Buffet). It will thereby have 243 established city-center locations in Europe and employ a total of 32,000 staff. SIGNA Retail will hold 50.01 percent of the shares of the holding company and HBC 49.99 percent. The newly formed retail company will be led by Dr. Stephan Fanderl, current CEO of Karstadt & SIGNA Retail, and include representatives from Galeria Kaufhof and Karstadt.
In addition, the joint venture will bring together the E-commerce businesses Galeria-kaufhof.de, saks-off-5th.de, inno.be, hudsonsbay.nl, dinea.de, karstadt.de, karstadt-restaurant.de, karstadt-reisen.de, hood.de, kisura.de and karstadtsports.de. This combined online presence provides a strong platform for further growth in E-commerce.
With the partnership, SIGNA Prime Selection AG will acquire a 50 percent equity interest in HBC’s European real estate holdings. These assets will include 39 properties owned by HBC’s existing Joint Venture in Europe and 18 additional properties held at Galeria Kaufhof. HBC will continue to hold 50 percent of the real estate assets, which has appreciated over its three-year ownership. The Kaufhof location in Cologne and the Carsch-Haus in Duesseldorf will be subsequently acquired by SIGNA Prime Selection AG and the proceeds will be invested in the combined retail entity and repay debt.
HBC and SIGNA Group have come to an agreement with the corresponding contracts already signed. The closing of the transaction is subject to approval from the antitrust authorities.
Helena Foulkes, CEO of HBC: “We are very pleased to partner with SIGNA and are confident of our direction for the future. This partnership is a smart, strategically sound opportunity to equip both companies with the capabilities to strengthen operations and overcome the challenges in the German retail market. We believe it is the best structure for customers, HBC, our associates/employees and the city-centers where we operate. Together, we will focus on seizing opportunities in the market, evolving the business model, and adapting it to meet changing consumer needs.”
Dr. Stephan Fanderl, CEO of Karstadt Warenhaus und Managing Director of SIGNA Retail: “We are looking forward to partnering with HBC. With this joint venture, two iconic companies have found an ideal solution to position themselves for success in the highly competitive German and European retail market. We are now entering a phase of hard work, major operational challenges and demanding market changes. Together, we can make better use of the opportunities of digitization and the strengths of inner-city retailing than ever before. In the future, our joint department stores will be accessible in the immediate vicinity to 80 percent of urban customers and reach out to more than 20 million customers in our loyalty programs.”
HBC is a diversified global retailer focused on driving the performance of high quality stores and their omni-channel platforms and unlocking the value of real estate holdings. Founded in 1670, HBC is the oldest company in North America. HBC’s portfolio today includes formats ranging from luxury to premium department stores to off price fashion shopping destinations, with more than 480 stores and approximately 65,000 employees around the world.
In North America, HBC’s leading banners include Hudson’s Bay, Lord & Taylor, Saks Fifth Avenue, and Saks OFF 5TH, along with Home Outfitters. In Europe, its banners include Galeria Kaufhof, the largest department store group in Germany, Belgium’s only department store group Galeria INNO, as well as Saks OFF 5TH in Germany and the Netherlands and Hudson’s Bay in the Netherlands.
HBC has significant investments in real estate joint ventures. It has partnered with Simon Property Group Inc. in the HBS Global Properties Joint Venture, which owns properties in the United States and Germany. In Canada, it has partnered with RioCan.
SIGNA Group is a privately held industry holding company in the real estate and retail sectors, founded by Entrepreneur René Benko in 1999. With real estate assets of over EUR 12 billion and an additional development pipeline of around EUR 8 billion, the company is one of the leading real estate investors in Europe and operates well-known retail companies with around 25,000 employees and sales of over EUR 4.5 billion thereof more than EUR 750 million profitable online revenues.
SIGNA Real Estate Group is one of the largest real estate owners in major European Metropolitan hubs covering, amongst others, Berlin, Munich, Hamburg and Vienna, and owns a remarkable collection of high street assets including iconic landmark buildings such as the KaDeWe and the UPPER WEST Tower in Berlin, the Golden Quarter with the Park Hyatt Hotel in Vienna, Alte Akademie and Oberpollinger in Munich, and Alsterhaus and Alsterarkaden in Hamburg.
The SIGNA Retail Group steers five independent retail platforms including SIGNA Premium, SIGNA Department Store Group, SIGNA Home & Lifestyle, SIGNA Food & Restaurants as well as SIGNA Sports United, continental Europe’s largest sports E-commerce platform. Each of these platforms has contributed to the strong European growth of the SIGNA Retail Group in the recent years. With over 200 premium inner-city locations and 100 web shops in 20 countries, SIGNA Retail is one of the leading retail holding companies in Europe.