The Hudson’s Bay Company is making a move overseas with today’s announcement of the $3.9 billion acquisition of Germany’s Kaufhof department store chain.
Kaufhof’s parent company, Galeria Holding, was sold to HBC on Monday by Germany’s Metro Group for almost $4 billion, making the transaction a landmark move for The Bay’s international endeavors.
Kaufhof is the #1 department store in Germany and Belgium, selling men and women’s clothing, accessories, beauty supplies and shoes. There are 103 store locations, not including 16 Sportarena locations and 16 INNO locations. Both Sportarena and INNO, Belgium’s only department store, were acquired in the deal.
According to HBC, the Kaufhof acquisition price is expected to be largely financed by proceeds received from the Kaufhof Real Estate Transaction and, as a result, HBC does not intend to issue equity and expects to incur limited additional debt.
Through the Kaufhof acquisition, The Hudson’s Bay says they are building a “premier international retailer” with 464 locations in four countries, $13 billion in revenue and $11 billion in real estate value.
“These are exciting transactions that demonstrate our proven growth formula in action: improving solid retail operations, unlocking the value of real estate and growing through acquisitions,” says Richard Baker, Governor and Executive Chairman of HBC.
“This is the right investment at the right time. We have been carefully surveying the European retail landscape for many years for a potential expansion opportunity and have watched Kaufhof build on its exceptional real estate to become the #1 department store in Germany. We are excited to work with the existing Kaufhof management team, bring our expertise to bear in the German retail sector and welcome Kaufhof to our portfolio of dynamic brands.”
This is not Hudson’s Bay’s first foray into the international market; the iconic Canadian company also owns Saks Fifth Avenue, Lord & Taylor, Saks OFF 5th and Home Outfitters.
“This acquisition is a significant step forward in our plans to become a premier international retailer. 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,” says Jerry Storch, CEO of HBC.