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Hudson’s Bay Company completes acquisition of Galeria Kaufhof for EUR2.5bn

Published 02 October 2015

Canadian department store chain Hudson’s Bay Company (HBC) has completed the acquisition of Germany-based department store chain Galeria Kaufhof and its Belgium subsidiary for €2.5bn.

Hudson's Bay Winnepeg

HBC raised finance for the acquisition by selling 41 Kaufhof properties to HBS Global Properties, which is its real estate joint venture with Simon Property Group. The JV owns the Saks Fifth Avenue store in Beverly Hills, California besides other sites.

HBC intends to launch the Saks and Saks OFF 5th brands to Canada by next year and over time bring them to the German market as well.

In June, the firm agreed to purchase Galeria Kaufhof and its Belgian unit Galeria Inno, in addition to related real-estate assets, to enter into European market.

This deal is will boost the sales of the Canadian retailer by about 25%.

With this acquisition Kaufhof, which is a leading department-store chain in Germany, HBC will run eight banners spanning across four countries. Its other banners comprise its namesake outlets in Canada and Lord & Taylor in the US.

In the last few years, HBC has been expanding aggressively - in 2013, it purchased Saks Fifth Avenue operator Saks Inc for around $2.9bn.

A few days ago, the Canadian department store chain announced its plans to axe 265 jobs at its head office and corporate offices in North America, as part of its strategy to save costs.

The consolidation of corporate functions will save retailer will CAD75m ($55.86 m) annually. It will bear a CAD20m ($15m) charge in the third quarter.

A company spokesperson was quoted by The Wall Street Journal as saying that the layoffs would account to less than 1% of the total workforce.

The layoffs would affect only in corporate functions of accounting, IT and finance. Most of the jobs will be cut at its US operations.

 


Image: HBC completes acquisition of Galeria Kaufhof. Photo: Courtesy of KrazyTea/Wikipedia.