Canadian department store group Hudson's Bay Company (HBC) is considering the sale of its Galeria Kaufhof properties due to 'commercial difficulties', according to media reports.
HBC purchased Germany's 136-year old Kaufhof department store chain and its Belgian unit Immo in a deal valued at over €2.8 bn in June 2015. It proceded to finance the acquisition through the sale of 41 of the properties to its US real estate joint venture with Simon Property Group, Simon-HBC JV, for around €2.6 bn.
A report from Germany's Wirtschaftswoche said that Hudson's Bay was now limiting its vendor credit, whicht it said implied the company faced 'commercial difficulties'. According to the article, Austria's Signa Group, which owns Kaufhof's main competitor, Karstadt, could be interested in buying the stores, after Karstadt improved its market share at Kaufhof's expense.
Meanwhile US business magazine Forbes reported that the Canadian group had released a statement, saying that 'Galeria Kaufhof is an important part of HBC. We are committed to that banner and our business in Europe. Since our acquisition of Galeria Kaufhof two years ago, we have invested heavily in the business and continue to do so in the future through a comprehensive capital expenditure programme.'
HBC added: 'As a normal course of business we regularly assess and optimise our real estate to build on our track record of value creation.' Management added that it had no interest in doing business with Signa.
The developments in Germany could negatively impact HBC's growth plans in the Netherlands. After entering the country in May 2016, it announced it would open 20 stores over a two-year period.
A recent warehouse deal in the town of Mijdrecht was flagged as the first of a possible 10 new sheds for the Canadian company to support its growing retail store network and online sales business in the Netherlands.
Hudson's Bay announced in early June that it has launched its exclusive shopping format Saks OFF 5TH on the European market with the opening of its first European store in Carsch Haus in Düsseldorf.
The opening of the store in Düsseldorf marks the beginning of the market launch in Germany and the Netherlands. Another store opened shortly afterwards in Frankfurt am Main on 22 June, followed by an opening in Wiesbaden city centre on 29 June.
These will be joined later this summer by further stores in Heidelberg, Stuttgart and Rotterdam. A store in Amsterdam is also in the pipeline.
