● Purchase of an under-performing retail
division
● Provision of operational management
● Provision of additional working capital |
Situation
KarstadtQuelle is Germany’s leading department store group. Taking a new strategic approach, it decided to focus its resources on its more fashion-driven ‘boulevard’ stores. This meant the disposal of 74 department stores – ranging in size from 10,000 to 80,000 square feet, located in smaller cities and suburbs across Germany.
Action
Hilco, working in partnership with property specialists Dawnay, Day, acquired the stores for more than €450 million. The partnership’s combination of expertise in retail and property meant it could offer KarstadtQuelle its desired complete solution. Despite competition from several private equity funds, a deal was agreed, due diligence carried out, and the contracts completed in under ten weeks.
Result
The once loss-making business now trades on a stand-alone basis with a turnover of more than €650 million. Hilco has designed a turnaround plan, helped to strengthen the management team and has implemented a new supply-chain and sourcing strategy. All of which should see the business achieve profitable trading in its first year of independence.
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