Inside A Galeria Kaufhof Store As Metro AG Sells Department Store Chain For 2.83 Billion Euros
Hudson's Bay is pouring money into its new purchase. Photograph by Bloomberg Bloomberg via Getty Images

Saks Owner Hudson’s Bay Is Investing $1 Billion in a German Department Store

Canadian department store operator Hudson's Bay plans to invest 1 billion euros or some $1.12 billion in its German chain Kaufhof over the next five to seven years, its chief executive told German business daily Handelsblatt.

"It's a big amount we are prepared to invest because we are convinced that Germany is a great market and that department stores have a future here," Jerry Storch was quoted in an interview on Friday.

Saks owner Hudson's Bay (hbayf) bought Kaufhof for 2.8 billion euros last year, giving it a launch pad to expand into Europe, something Storch said was on the cards.

"We are looking at Germany's neighbour countries. Apart from the German-speaking regions, we think the Benelux countries are interesting for us," Storch said, adding the company would open a new department store in Luxembourg in 2018.

Hudson's Bay, which owns Saks Fifth Avenue and Lord & Taylor, also gained a bigger foothold in e-commerce earlier this year when it snapped up flash-sales pioneer Gilt Groupe for $250 million in cash. The acquisition was aimed primarily at turning its discount Saks Off Fifth chain into an online powerhouse.

($1 = 0.8950 euros) (Reporting by Christoph Steitz)

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