Metro AG shares climbed on reports that Germany’s biggest retailer may be close to selling the Kaufhof department-store chain that has been a stalwart on the country’s shopping streets for the best part of 135 years.
Signa Retail GmbH, owned by Austrian property investor Rene Benko, offered close to €2.7 billion for Kaufhof, Manager-Magazin reported, citing unidentified company sources. Handelsblatt cited a purchase price of about €2.9 billion in a separate report.
Metro stock rose as much as 3.6 per cent in Frankfurt. It has gained 29 per cent this year, beating the DAX Index’s 21-per-cent increase, as chief executive officer Olaf Koch takes steps to divest underperforming divisions and modernise stores. Vienna-based Signa plans to merge the Kaufhof outlets with Karstadt Warenhaus GmbH, the unprofitable German chain that Benko purchased in August, according to the reports.
Signa declined to comment. Metro representatives couldn’t immediately be reached for comment.
Koch is trying to turn around Metro’s Cash & Carry wholesale division and the Media-Saturn electronics outlets, as well as reposition the Real food-store chain, as online competitors upend the conventional retail market. Traditional retail “is dead”, Koch said in a December interview.
Kaufhof and Karstadt have dominated German department-store retailing for more than a century. The chains have struggled to adapt to new competitors including Amazon.com, as shoppers seek more international brands in an increasingly crowded market.
News by Bloomberg, edited by ESM
