{"id":1004121253,"date":"2015-06-16T06:26:24","date_gmt":"2015-06-16T14:26:24","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004121253"},"modified":"2022-12-08T23:55:05","modified_gmt":"2022-12-09T07:55:05","slug":"hudsons-bay-shops-big-in-deutschland","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/hudsons-bay-shops-big-in-deutschland\/","title":{"rendered":"Hudson’s Bay Buys Big in Deutschland"},"content":{"rendered":"

By Scott Baltic, Contributing Editor<\/em><\/p>\n

\"Jerry<\/a>

Jerry Storch, Hudson’s Bay Co.<\/p><\/div>\n

In a landmark inter-hemispheric deal worth $2.72 billion (\u20ac2.420 billion), Hudson\u2019s Bay Co. has agreed to acquire Galeria Holding, the parent company of Kaufhof, Germany\u2019s number-one department store, Hudson\u2019s Bay announced Monday. The acquisition is expected to close by the end of the third fiscal quarter of this year.<\/p>\n

Galeria Holding operates 135 stores in all: 103 Galeria Kaufhof and 16 Sportarena stores in Germany and 16 Galeria INNO stores in Belgium. For the 12-month period that ended March 31, Kaufhof generated sales of $3.48 billion (\u20ac3.1 billion) and normalized EBITDA of $317 million (\u20ac282 million).<\/p>\n

Once the transaction is closed, HBC will operate 464 locations across four countries and eight major retail brands: Hudson\u2019s Bay, Lord & Taylor, Saks Fifth Avenue, Saks Off 5th and Home Outfitters, plus the three Galeria Holding brands.<\/p>\n

The expanded operation is expected to bring in $10.5 billion (C$13 billion) in revenue and more than $612 million (C$754 million) in adjusted EBITDA, and have a total real estate value of about $8.9 billion (C$11 billion). At that point, about 44 percent of sales will be generated in United States, 31 percent in Germany, 23 percent in Canada and 2 percent in Belgium.<\/p>\n

But wait, there\u2019s more. The deal also involves a second, related transaction. HBC has entered into an agreement in principle with Simon Property Group under which the U.S. real estate joint venture between HBC and Simon (announced in February<\/a>) will purchase at least 40 of Kaufhof\u2019s owned or partially-owned properties for at least $2.70 billion (\u20ac2.4 billion), subject to certain conditions, including securing acceptable debt financing.<\/p>\n

Because the Kaufhof acquisition price is expected to be largely financed by proceeds from the JV-related transaction, HBC reportedly \u201cdoes not intend to issue equity and expects to incur limited additional debt\u2026.\u201d<\/p>\n

\u201cThese are exciting transactions that demonstrate our proven growth formula in action: improving solid retail operations, unlocking the value of real estate and growing through acquisitions,\u201d Richard Baker, governor and executive chairman of HBC, said in the announcement. \u201cWe have been carefully surveying the European retail landscape for many years for a potential expansion opportunity and have watched Kaufhof build on its exceptional real estate to become the #1 department store in Germany.\u201d<\/p>\n

\u201cThis acquisition is a significant step forward in our plans to become a premier international retailer,\u201d\u00a0 Jerry Storch, CEO of HBC, said in the release. \u201cExpanding our footprint into Europe with Kaufhof also provides us with a strong foundation to explore to explore additional opportunities for growth throughout the Continent.\u201d<\/p>\n

To fund the Kaufhof acquisition purchase price and expected transaction costs, HBC states, it has received aggregate term loan B commitments of about $3.250 billion (C$4.001 billion) from Bank of America Merrill Lynch, Morgan Stanley Senior Funding, Inc., RBC Capital Markets, and Scotiabank. This funding will also be used to refinance the existing $650 million (C$800 million) senior term loan B.<\/p>\n

However, HBC reportedly does not expect to use the large majority of these new commitments, but rather will fund the Kaufhof acquisition largely from the JV-related transaction. In addition, Simon has a prior equity commitment of at least $179 million to the JV. HBC expects to retain a 65 to 85 percent interest in the JV, depending on its investment.<\/p>\n

\u201cThis is not just about HBC, but also Simon Properties Group,\u201d Jeff Green, president of Jeff Green Partners, told Commercial Property Executive<\/em>. \u201cBoth companies have had the appetite to expand (even) more globally, but HBC has never found the right \u2018fit\u2019 with other international department stores.\u201d<\/p>\n

\u201cThe U.S. developers (in this case Simon, but this is also true for other developers such as Taubman) have had a rough time developing shopping centers in foreign countries. This might make it easier for someone like Taubman to actualize that strategy.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

In a landmark inter-hemispheric deal worth billions, Hudson\u2019s Bay Co. will soon be the proud owner of a top German department store.<\/p>\n","protected":false},"author":952,"featured_media":1004118956,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21808,21783,21742,21749],"tags":[],"class_list":["post-1004121253","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-featured","category-investment","category-latest","category-retail"],"acf":[],"yoast_head":"\nHudson's Bay Buys Big in Deutschland - Commercial Property Executive<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/hudsons-bay-shops-big-in-deutschland\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Hudson's Bay Buys Big in Deutschland\" \/>\n<meta property=\"og:description\" content=\"In a landmark inter-hemispheric deal worth billions, Hudson\u2019s Bay Co. will soon be the proud owner of a top German department store.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/hudsons-bay-shops-big-in-deutschland\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2015-06-16T14:26:24+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-12-09T07:55:05+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2015\/05\/Jerry-Storch-Hudsons-Bay-Co..jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"576\" \/>\n\t<meta property=\"og:image:height\" content=\"516\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Anna Spiewak\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/hudsons-bay-shops-big-in-deutschland\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/hudsons-bay-shops-big-in-deutschland\/\",\"name\":\"Hudson's Bay Buys Big in Deutschland - 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