The real reason for merging Karstadt and Kaufhof

The real reason for merging Karstadt and Kaufhof

Published at: 2018-09-13 08:52 | Author: CIJ Europe
Writing in Suddeutsche Zeitung, Michale Klasgen claims that the proposed merger of Karstadt and Kauhof is not driven by a belief that together, the two classic department stores can rediscover a winning formula. Instead, he claims that both retailers sleepwalked through the retail revolution that's taken place over the past ten years and are hardly positioned to recover "They almost never thought of the customer," writes Klasgen. "They got wrong everything Amazon gets right."
So what's driving the proposed merger? The value of the prime real estate the two companies control has been rising, and continues to do so. Klasgen claims that if it weren't for the merger, Kaughof would fall quickly into bankruptcy and Karstadt would have had to fight tooth and nail for years to come.

Both companies have been suffering under the onslaught of on-line retail, as Germans have come to realize what their options are when it comes to middle market fashion and accessories. Kaufhof, owned by HBC, has been making consistent losses, while Galeria Kaufhof turned its first profit in years (just over €1m) in 2017.

Similar Stories:

Merko to build Lidl logistics center in Riga
SIA Merks, part of AS Merko Ehitus, has signed a contract with SIA Lidl Latvija for the co  »
Starbucks Reserve opens first Czech cafe central Prague
The first Starbucks Reserve store opened on Jungmannova street in central Prague at the fo  »
Merko to build Lidl logistics center in Riga
SIA Merks, part of AS Merko Ehitus, has signed a contract with SIA Lidl Latvija for the co  »
JUST GYM to open at M1 Poznań
Just GYM leased 2,000 sqm at the M1 shopping center in Poznań. Colliers International rep  »
Atrium European Real Estate Limited is exiting Romania, following its sale of the Atrium M   »
Are new retailers arriving in the Czech Republic because of the boom? The Czech Republ   »
One of Romania’s most consistently successful developers, AFI Europe, has big plans for   »
One of Romania’s most consistently successful developers, AFI Europe, has big plans for   »