BERLIN — Karstadt owner René Benko and his Austrian real estate company Signa Holding has reportedly once again made an offer for the Metro Group’s Kaufhof department stores.
Talks of a sale of the Galeria Kaufhof chain, which operates 119 stores in Germany and 16 in Belgium, have repeatedly emerged in recent weeks. Canada’s Hudson’s Bay Co., Thailand’s Central and the German Karstadt group are said to be among interested parties.
Though Metro has said Kaufhof is not part of its core business, signaling interest in a sale, current Metro chief executive officer Olaf Koch has long emphasized Metro is under no pressure to sell under an “adequate” price.
In a statement, Metro said “We will not comment on any speculations about a possible sale of Galeria Kaufhof. Metro Group has always made clear that Kaufhof has a great strategic potential, which is also reflected in the development of the business over recent years. However, we do not exclude a departure from Kaufhof if a potential buyer offers an appropriate price, solid financing and a coherent concept for the future. It is correct that various discussions are taking place within this context, but no results or decisions have yet emerged. As we have already repeatedly emphasized, we will only comment on this if all prerequisites have been fulfilled. At the moment, this is not the case.”
A Signa spokesperson was not available for comment.
The possibility of a merger between the two competing German department store groups goes back over a decade, and in late 2011, both Benko and the former Karstadt owner Nicolas Berggruen entered a bidding war for Kaufhof. At that time, industry sources placed Benko’s unsuccessful bid at about 2 billion euros. He is said to have upped his bid to about 2.9 billion euros.
In the second-quarter ending March 31, Galeria Kaufhof booked an operating loss of 24 million euros, or $27.1 million euros, compared to a loss of 2 million euros for the quarter, or $2.7 million, a year previously. Metro blamed the soft performance on weather factors and the resulting markdowns, as well as diminishing like-for-like sales. Sales for the department store division slipped 1.2 percent to 674 million euros, or $760.5 million. On a like-for-like basis, sales were down 0.6 percent.
As for Karstadt, the troubled group announced plans to close another five loss-making Karstadt department stores in the course of 2016. Attempts to turn around the group’s 83 door mid-market business have born little fruit under its last three owners Arcandor, Berggruen and now Signa.