HBC’s Galeria Kaufhof Merges with Karstadt

The Hudson’s Bay Co. (Toronto) has announced a new “strategic partnership” with the Signa Group (Vienna), which owns Karstadt, a prominent department store in Germany.

The deal is aimed to raise money for HBC and lower its debt. Signa Group will pay $468 million (converted from Canadian dollars) to acquire a majority stake – 50.01 percent – in HBC’s European retail operations, and a 50-percent stake in its German real estate, valued at about $3.76 billion, according to Women’s Wear Daily.

HBC will use the proceeds of the deal to pay down some of its debt, which totals about $3.2 billion. The department store company has been selling some of its other assetts to raise money as of late, including Gilt, which it sold to Rue La La earlier this year, and Lord & Taylor’s New York flagship, which it sold to WeWork late last year.