BONNGermany gets a new department store giant: The Federal Cartel Office gave green for the merger of Karstadt and Kaufhof. Antitrust President Andreas Mundt said on Friday in Bonn: "We have been intensively investigating the project, not from the point of view of consumers, nor from the point of view of producers and suppliers, that there has been tremendous competition concerns." Karstadt and Kaufhof have not only a stationary business. Online trading also creates additional competitive pressure.
The new retail giant will have 243 branches in Europe and will employ around 32,000 people. Under the auspices of the new venture, not only German Kaufhof and Karstadt branches, but also Karstadt sports stores, European branches of the Saks Off 5 sales chain, Galeria Inno department stores in Belgium, which were recently founded by Hudson & Bay's department stores in the Netherlands, as well as a number of Internet providers.
For employees, the decision was not taken without fear because of the threat of job losses. Karstadt Chairman of Board of Directors Jürgen Ettl called on the owner and the management to do everything in their power to ensure the work of all employees. Especially in cities where department stores are located in close proximity, intelligent solutions are now sought.
Also, communities are observing mixed feelings. Cities are interested in "that after merger, all branches will remain," said Helmut Dedy, CEO of Helmut Dedy. Because large department stores are important for the attractiveness of inner cities. Norbert Portz of the city and community federation appealed to corporations to prevent "clear cuts" in inner cities.
What the merger brings to workers and communities is still very uncertain at present. There are also no expected job losses and there are no signs of a possible closure. However, owner René Benko has recently tried to alleviate fears of drastic cuts: "Of course we need to rehabilitate, but we will fight for each branch and try to put them in black," he said.
Merging was born out of necessity. For years, Kaufhof and Karstadt have been making a triumphal march of cheap service providers such as Primark and online retailers such as Amazon or Zalando, as well as the competition of large shopping centers. Since the merger, these two chains have hoped to improve their competitive position. Purchasing power volumes should enable Kaufhof and Karstadt to obtain better conditions from suppliers. In addition, considerable amounts could be spared by experts in the field of administration, data processing and logistics. The new giant of the department store will be led by former head of Karstadt, Stephan Fanderl.
The owner of Kaufhof HBC stressed after the decision of the antitrust authorities that the merger creates conditions for both companies to strengthen their business and to tackle the problems in the German retail sector. Initially, no comments were received from the signatory of the Cardholder Benkov.