Hudson’s Bay Company has entered into a joint venture with European retail and real estate operator, Signa Retail Holdings to combine its efforts in Europe.
The deal will see Hudson's Bay Co.’s retail operations combine with Signals’ Karstadt Warenhaus and will give Hudson Bay Co. 49.99 percent stake in the combined businesses which include Galeria Kaufhof and Karstadt. Signa will retain 50 percent interest in Hudson's Bay Co.’s German property assets, with a 50/50 joint venture formed to oversee Hudson's Bay Co.’s German real estate operations.
“We are excited to bring together these iconic banners to create Germany's leading retail business,” says Helena Foulkes, chief executive officer, Hudson's Bay Co. “We are creating a stronger retail entity that is better positioned to capitalize on market opportunities. This transaction builds on our recent efforts to streamline HBC and provides a clear path forward to improve our European operations.”
The new joint venture will be overseen by Dr. Stephan Fanderl, chief executive officer, Karstadt.
Both companies will share six board seats and will each be consulted on major decisions.
“This transaction highlights the significant value of our German real estate assets, which are worth approximately $1.1 billion more than what we paid for Galeria Kaufhof in 2015,” says Richard Baker, governor and executive chairman, Hudson's Bay Co. “Our partnership with SIGNA will serve our business extremely well as it establishes a platform to strengthen our European retail and real estate operations further. This transaction reinforces our long-term focus of unlocking real estate value through strategic partnerships, redevelopment and enhancing the credit profile of retailer tenants along with managing a portfolio of retail banners.”
The companies are set to close within 90 days and are subject to European rule.