Hudson Bay Group's Acquisition Of Galeria Kaufhof Continues To Expand

The Hudson'sBayCo. (TSE:HBC) Hudson Bay Group recorded double-digit growth in the first quarter of the year. However, due to the higher SG&A expenditure and the cost of sales, the group lost its share in the first three months of May 2nd.

Net loss in the first quarter amounted to $54 million, or a loss of $0.30 per share, compared with a net profit of $176 million in the same period last year, or a profit of $0.97 per share, mainly due to the proceeds from the sale of a property in Toronto.

The adjusted net loss expanded from $27 million in the same period last year to 33 million Canadian dollars.

Net sales increased by 11.7% to $2 billion 72 million a year, slightly below the market forecast of $2 billion 80 million, compared with $1 billion 855 million in the same period last year.

The group's same store sales grew by 11.7%, but the growth rate of same store sales was narrowed to 2.7% after the exchange rate was removed, and the number of sales increased by 37.2% over the same period last year.

Canadian retailers Hudson's Bay Co. (TSE:HBC) Hudson Bay Group announced that it has reached an agreement with Metro AG (MEOG.DE) Metro to acquire Galeria Kaufhof of the German chain department store, which is the first step in the expansion of Europe and eventually to become a "global senior zero seller".

The Hudson's BayCo. Hudson Bay Group will pay 2 billion 825 million euros ($3 billion 200 million, including debt) for Galeria Kaufhof, which is expected to be completed by the end of September.

The assets of Galeria Kaufhof include 103 Galeria Kaufhof department stores, 16 Sportarena stores, 16 Belgian Galeria Inno department stores, and several logistics centers, warehouses and Galeria Kaufhof offices in Cologne, Germany.

Galeria Kaufhof, founded in 1879, earned about 3 billion 100 million euros last year, and its core earnings EBITDA was 193 million euros.

Richard Baker, executive chairman of Hudson's BayCo. Hudson Bay Group, said in its announcement that the group has been seeking expansion opportunities in the European retail market for many years, and that the acquisition of Galeria Kaufhof is the right investment at the right time.

Hudson's BayCo. Hudson Bay Group is the oldest enterprise in North America. In 2008, it was acquired by private Partners NRDCEquity Partners, founded by Richard Baker, and in 2013, it bought $2 billion 900 million US dollars for SaksInc., a high-end chain store retailer in the US.

The group now plans to introduce SaksInc.'s SaksFifthAvenue Sax Fifth Avenue and discount department store SaksFifthAvenueOFF5TH into the European market, open shop in some GaleriaKaufhof stores or in newly purchased or leased properties.

GaleriaKaufhof will be pformed by e-commerce expansion, shop floor optimization and productivity enhancement.

Hudson'sBayCo. JerryStorch, chief executive officer of Hudson Bay Group, said at a news conference that GaleriaKaufhof will make full use of its local distribution center's role to develop full channel retail to compete against Amazon.comInc. (NASDAQ:AMZN) Amazon group.

GaleriaKaufhof's 21 thousand and 500 employees will be retained. MetroAG chairman Metro OlafKoch pointed out that this is the key factor for Hudson'sBayCo. Hudson Bay Group to win the battle between GaleriaKaufhof and Austria real estate tycoon Ren Benko bank. RichardBaker also promised not to end any stores and layoffs in the next 3 years at the press conference.

In addition, the Hudson'sBayCo. Hudson Bay Group also wins its more robust financing structure and alignment.

Investment and growth plan.

Ren e Benko bank is the largest competitor of GaleriaKaufhof in Germany, Karstadt department store owner, people familiar with the matter said that if the two major department stores are likely to lead to large-scale closes and layoffs.

Ren's Benko subsidiary SignaRetailGmbh said in a statement that it regretted that GaleriaKaufhof had fallen into his hands and said it would focus on the development of Karstadt department store in the future.

It also has Canadian Hudson 'sBay name.

After joining the GaleriaKaufhof, the Hudson'sBayCo. Hudson Bay Group of HomeOutfitters stores and Lord&Taylor stores in the United States will increase the total number of stores to 464, with an annual revenue of over 13 billion yuan (US $10 billion 600 million), 44% of them in the United States, and 31% from Germany, Canada and Belgium contributing 23% and 2% respectively.

On the other hand, MetroAG, Metro, the fourth largest retailer in Europe, expects that the sale of GaleriaKaufhof will inject 1 billion 600 million euros into its cash flow and reduce its liabilities by 2 billion 700 million euros.

After getting rid of GaleriaKaufhof, Metro MetroAG will get capital to increase investment in store modernization and e-commerce, and enhance its growth ability in the increasingly competitive market.

This is the second time in a week.

Investment in German retail businesses.

CentralGroup, the largest retail group in Thailand, bought the KaDeWeGroup50.1% stake in luxury luxury department stores in Italy last week through its wholly owned Italy high-end chain store group KaDeWeGroup. The remaining 49.9% stake in KaDeWeGroup continued to be held by SignaRetailGmbh SignaRetailGmbh of Ren Benko bank.

Thanks to the low unemployment rate and low interest rates, Germany's consumer confidence index is at its highest level in 2001.

The HDE Retail Association says that domestic consumers prefer to buy cars and houses rather than clothes.

Since the paction price was less than 3 billion euros of investors' expectations, smaller debt reduction and no special dividend payments, MetroAG (MEOG.DE) fell 4.81% to 29.51 euros late on Monday when no fashion Chinese net was written, and the stock rose 16.6% in 2015.

Hudson'sBayCo. (TSE:HBC) reported a $24 gain last Friday, and the news of the impending close combination pushed up 5.17% all day.