Sunday , April 2 2023

The green light for the merger between Karstadt and Kaufhof


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Karstadt and Kaufhof Karstadt and Kaufhof

The Karstadt and Kaufhof branches are located on a street in Dusseldorf. Photo by Marius Becker

Source: dpa-infocom GmbH

Competitors have no objection to the merger of store giants. Because competition in stationary trade and in InterNet is high. But for employees and communities, the decision makes mixed feelings.

BOnn (AP) – Germany becomes a new giant of the universal store: The Federal Bureau of the Cartel took a step forward for the merger between Karstadt and Kaufhof.

The President of the Bundeskartellamt, Andreas Mundt, said in Bonn: "We have intensively examined the project. Neither from the consumer's perspective nor from the point of view of producers and suppliers, there have been constant competition concerns.

Karstadt and Kaufhof not only have many competitors in stationary business. Online commerce also creates additional competitive pressures.

The new retail giant will have 243 locations in Europe and employ around 32,000 people. Under the umbrella of the new holding, not only will the German branches Kaufhof and Karstadt be united, but also the Karstadt sports shops, the European branches of the Saks Off 5 distribution chain, the Inno Galleries in Belgium, which were recently founded Hudson's Bay in The Netherlands, as well as a number of internet providers.

For employees, the decision was not taken without concern because of the threat of job cuts. Karstadt Labor Council chairman Jürgen Ettl has asked owners and executives to do their best to protect the jobs of all employees. Especially in cities where there are shops of both brands in the immediate vicinity, intelligent solutions are in search.

Cities and cities also follow developments with mixed feelings. Cities have been interested in "the fact that, after the merger, if possible, all the store locations remain," said Helmut Dedy, executive director of the German Cities Association. Because the big stores are important for the attractiveness of the inner cities. Norbert Portz of the city and community federation also appealed to corporations to prevent "clear cuts" in inner cities.

What the merger will bring to workers and communities is still very uncertain at the moment. There is no estimated number of job losses, and there are no indications of any closures. However, the Karstadt owner, René Benko, has endeavored to mitigate the fears of drastic cuts: "Of course we have to get back, but we will fight for each branch and try to put them in black," he said.

The merger was born of necessity. For years, Kaufhof and Karstadt have made the triumph of low-priced suppliers such as Primark and online retailers such as Amazon or Zalando, as well as the competition of major shopping centers.

From the merger, the two chains hope to improve their competitive position. The purchasing power group should allow Kaufhof and Karstadt to obtain better conditions from suppliers. In addition, according to industry experts in the field of administration, data processing and logistics, considerable savings could be made. The new giant of the store will be led by former Karstadt chief Stephan Fanderl

According to the antitrust decision, the owner of Kaufhof HBC stressed that the merger would create conditions for both companies to consolidate business and master the challenges in the retail sector in Germany. Initially, no comments were received from owner Karstadt's signatory, Benko.

Opinion of the Bundeskartellamt

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