German Department Stores Merge As Competition With Amazon Heats Up

Hudson’s Bay Company (HBC) and Signa Retail Holdings, a European retail and real estate operator, have agreed to merge two of Germany’s largest department stores.

Under the agreement, HBC’s Galeria Kaufhof and Signa’s Karstadt will merge to form Europe’s third-largest department store chain by revenue, after Spain’s El Corte Ingles and UK’s Marks & Spencer (M&S). The combined department store group will generate annual sales of approximately 5.4 billion euros ($6.3 billion USD).

The merger comes at a time when European department stores are experiencing similar issues to those in the U.S., related to falling profits, an overreliance on markdowns and younger audiences shopping elsewhere. UK-based Debenhams recently brought in advisors to explore restructuring options, while rival House of Fraser has an uncertain future after being acquired by Sports Direct last month. In the case…