By: Francine Kopun Business reporter, Published on Mon Jun 15 2015
Hudson’s Bay Company announced Monday morning that it has a deal to buy the Kaufhof chain of department stores in Germany in a deal worth $3.3 billion (Cdn.)
The Star spoke with newly appointed chief executive officer Jerry Storch,
who is bullish on department stores in general.
The questions and answers have been edited for length.
Q) How will this affect shoppers in Canada?
A) I don’t think it will affect shoppers in Canada initially at all. Over time they will have more opportunity to buy unique products sourced globally. As a larger company, we will be able to find and buy product no one else in the market will be able to get.
Q) How will this affect employees in Canada?
A) I think it’s all good news because Hudson’s Bay is now 50 per cent larger in revenue and 40 per cent larger in stores. It’s a much stronger and more global company.
Q) HBC is hoping to achieve $100 million in synergies (savings), and you’ve made
a new hire in human resources. Are we going to see job losses at the Canadian banners HBC operates?
A) No, most of those synergies don’t have much to do with Canada at all. Those are related to the acquisition of Saks Fifth Avenue. That also has nothing to do with the Kaufhof acquisition. Most are synergies in the back end . . . and we’ve already made $65 million.
Q) I don’t think anyone doubts the value of the real estate play in this, but retail is a pretty shaky industry these days. Aren’t you worried about the future of department stores?
A) I’m not concerned about that. We’ve done very well in Canada and the U.S. department stores are the business model for the future. They offer diversity of product; they are the distribution centre around the corner from your house, when you want it. The future of department stores, I believe, is quite bright.
Q) The Kaufhof stores are unionized. HBC has limited experience with unions. How are you going to handle that?
A) It’s a core part of doing business in Germany and we embrace that.
http://www.thestar.com/business/2015/06/15/hudsons-bays-33b-german-deal-what-does-it-mean-here.html