BERLIN, Nov. 9 (Xinhua) — German antitrust regulators gave their seal of approval to the merger of the Karstadt and Kaufhof department store chains on Friday.
President of the Federal Cartel Office Andreas Mundt told press that there were no concerns about competition, either from the perspective of consumers, or producers and suppliers.
The chief of the Bonn-based government agency noted that Karstadt and Kauhof had to contend with plenty of competition from both traditional retail stores and online rivals.
The new Karstadt-Kaufhof entity will own a total of 243 department stores in Europe and employ around 32,000 workers. Aside from the locations of the Kaufhof and Karstadt chains in Germany, the merger unites Karstadt’s sportsware stores, the European presence of the outlet chain Saks Off 5th, department stores in Belgium and the Netherlands, as well as a range of online retailers.
Kaufhof’s Canadian owner, Hudson’s Bay Company (HBC), and Signa Group, the Austrian parent company of Karstadt, have both described the deal as a “fusion of equals”. However, Signa is set to acquire just over half of the shares (50.01 percent) of the new joint venture and will also become responsible for the operative end of business.
Following its acquisition by Signa in 2014, Karstadt has implemented a corporate restructuring program under chief executive officer (CEO) Stephan Fanderl which has returned the ailing retailer to profitability. By contrast, Kaufhof has so far failed to reverse a trend of declining revenue and losses since it became part of the HBC portfolio three years ago.
Both department chains have expressed hope that the fusion will allow them to demand better conditions from suppliers. Additionally, industry experts have pointed to large potential savings which the merged company can achieve in administration and logistics. However, the trade union ver.di has already warned that it will resist any moves which will lead to a significant deterioration in working conditions for staff, widespread lay-offs, or store closures.
Karstadt and Kaufhof have stated in previous negotiations that they intend to retain most current staff and will only close a small number of existing stores. The “Europaeische Warenhaus AG” established as a result of the successful fusion will become Europe’s second largest department store chain after Spanish company El Corte Ingles.