Canadian retail group Hudson’s Bay Company (HBC) has entered an agreement to merge HBC Europe, which trades as Galeria Kaufhof, with Austrian Signa Retail Holdings, which owns the Karstadt department stores.
The combined department store group had annual sales of around €5.4bn (£4.8bn) last year.
“We are excited to bring together these iconic banners to create Germany’s leading retail business,” said Helena Foulkes, HBC’s chief executive. “We are creating a stronger retail entity that is better positioned to capitalise on market opportunities.”
The new retail company will be led by Dr Stephan Fanderl, chief executive of Karstadt. HBC and Signa will share six board seats and have joint oversight of all major decisions.
HBC will own 49.99% of the group, while Signa will hold the remainder.
HBC trades as Hudson’s Bay, Lord & Taylor, Saks Fifth Avenue, Saks Off 5th, and Home Outfitters in North America.
In Europe, its brands include Galeria Kaufhof, the largest department store group in Germany, Belgium’s only department store group Galeria Inno, Saks Off 5th in Germany and the Netherlands, and Hudson’s Bay in the Netherlands.