Merger of Kaufhof and Karstadt? "The mood is not good, because we know very little"
BONN · Employees from the Kaufhof and Karstadt department stores are feeling uncertain these days with speculation of a possible merger. The Bonn branches of both stores are regarded within their parent companies as having strong sales.
Kaufhof and Karstadt department stores in Bonn are separated by just a few steps over the Münsterplatz in the city center. Inevitably, this would lead to the question of whether two separate buildings so near to each other would make sense if the department store chains were to merge. Both branches, however are regarded as high-sellers within their own companies and are likely protected for the time being.
Changes and additional shops within the department stores
Kaufhof is currently investing heavily in the Bonn branch. Following the closure of the Sports Arena, which was replaced by the group's own Saks Off 5th designer outlet, a large sports department has been set up on the fourth floor. Since its takeover by Canadian Hudson Bay Company (HBC) in 2015, Galeria Kaufhof has introduced new features in some of its properties, including the cosmetics brand Sephora, with its own large space on the ground floor in Bonn. Many changes have taken place on other floors as well. The ladies' and men's fashion departments, for example, has been moved up one floor each and the home textiles has moved to the basement.
British fashion shops Topshop and Topman want to expand in the German market and plan to open three additional stores in November of 2018. They will be located in the Galeria Kaufhof stores in Cologne on Hohen Straße, in Düsseldorf on Königsallee and in Bonn.
Karstadt will also see some changes. In September, discount supermarket Aldi and drugstore dm will move into the basement of the department store in the city. Management expects that this will bring in a higher customer frequency.
Employees are feeling uncertain
When it comes to speculation about a merger of the two department store chains, Karstadt employees are feeling unsettled. “The mood is not good, because we know very little,” said Therese Thrun, workers’ council chair at Karstadt in Bonn.
A Catholic investment company bought the building in 2012 from the Highstreet consortium, along with a leasehold agreement. Only a few months earlier, the city had extended the expiring leasehold with Highstreet for 30 years. A closure is unlikely, was the word earlier at the investment company. Karstadt has committed itself to the property with a long-term lease: By 2026, both sides would have no opportunity to terminate.
Will it come down to a merger of Kaufhof and Karstadt?
The owners of Kaufhof and Karstadt have signed a 200-page agreement. The so-called “wrapper agreement” creates a basis for a contract. In principle, business negotiations should now take place. Details should be clarified by the end of July, at the latest in six weeks. But a potential deal could still collapse. In February, Kaufhof owner HBC rejected a three billion euro bid from Karstadt owner, the Austrian René Benko.
Orig. text: Claudia Mahnke, Ralf Arenz
Translation: ck
