German department store Kaufhof needs cost cuts after poor Xmas
today Jan 23, 2019
German department store chain Kaufhof may have to cut costs after sales fell over the Christmas period, sources close to the company said.
Kaufhof's sales in Germany fell in the quarter beginning Nov. 4 through to the start of January, compared with a year ago, missing expectations, one source told Reuters, with the online business also shrinking.
Kaufhof declined to comment.
German regulators approved a merger of Kaufhof with rival chain Karstadt in November, creating a group with 243 department stores in Germany, Belgium and the Netherlands, 32,000 employees and annual sales of 5.4 billion euros (4.72 billion pounds).
Kaufhof, owned by Canada's Hudson's Bay Co and Austria's Signa Holding, does not give a breakdown for sales in Germany.
Their merger was sealed as booming online retail has hit sales at many department stores. Britain's House of Fraser group collapsed last year and U.S. chain Sears was saved last week in a bankruptcy auction.
Another source said Kaufhof might have to restructure and that the owners might have to invest several hundreds of millions of euros.
Both owners last year invested 100 million euros each in the newly merged company.
Signa Holding owns 50.01 percent in the merged business, led by Karstadt boss Stephan Fanderl, while Hudson's Bay, which bought Kaufhof in 2015, owns the rest.
The sources also said the merged group would decide by the end of January on the future of the companies' headquarters. Karstadt's is in Essen and Kaufhof's is in Cologne.
Kaufhof's supervisory board is due to meet on Wednesday, the sources said.
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