Peter-Vincent Schuld

Look, look but don’t buy. Anyone who has ever entered a department store with their own eyes will not have missed
the fact that there are more viewers than people queuing at the cash registers at times when it is not a total sale.

Some retail experts argue that department stores such as the Dutch Bijenkorf, the defunct V&D and Hudson’s Bay are actually outdated. In any case, at the time, investor/owner Sun Capital pulled the plug on the traditional Dutch V&D.

A dozen buildings were then leased to the Canadian department store chain Hudson’s Bay, which thus entered the Dutch retail landscape.

At the moment, the Dutch branches of Hudson’s Bay, which should compete most with de Bijenkorf in terms of segment, are not yet in a storm. To date, only the figures in the Den Bosch branch of the department store, which is new to the Netherlands, seem hopeful.

But Hudson’s Bay is under heavy pressure to do something substantial about its skyrocketing debt burden.
The shareholders of the retail company have long been dissatisfied with the loss-making activities of the company, which became known in Belgium through the takeover of the Belgian department store chain Galeria Inno through its subsidiary Galeria Kaufhof.

The annual balance sheet of many department store chains has quite a few different items. Buildings in which department stores operate are either owned or
rented from real estate companies. Sometimes it is lucrative for a company, or at least the shareholders, to sell their own real estate in which they operate shops in order to rent it back later, so that there is at least an increase in cash in the short term.

In recent weeks, Hudson’s Bay sold its real estate gem on 5th Avenue in New York for 730 million euros. The company’s executive board did not do this with full conviction, but was actually forced to do so by its shareholders who want to see the company’s billion-dollar debt reduced.

This does not solve the company’s debt burden. Some shareholders are of the opinion that Hudson’s Bay should withdraw from Europe altogether or at least sell Galeria Kaufhof and thus Galeria Inno in Belgium.

This week, Hudson’s Bay received an offer of three billion euros for Galeria Kaufhof from Austrian real estate and retailer Signa, owner of the German department store chain Karstadt. Hudson’s Bay is not yet taking Signa’s offer too seriously and would not contain any substantiation of Signa’s financing.

In any case, the offer of three billion that is now on the table is that Hudson’s Bay has paid for Galeria Kaufhof and also includes the debts to the German subsidiary. Shareholders are of the opinion that Hudson’s Bay should seriously consider and even accept the offer. Once again, the company would be able to acquire substantial liquidity and thus reduce its debt burden.