The Breuninger family’s intention to sell has surprised many in the fashion industry. Some of the alleged interested parties have dismissed the idea when asked.
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According to a report in the “Wirtschaftswoche” newspaper, the Breuninger fashion chain wants to sell its business. There are apparently numerous interested parties. The planned step has surprised many in the industry, as the company, which was founded in Stuttgart in 1881, has been considered exemplary up to now: the department store chain has always focused on affluent clientele, and its “boutiques within a boutique” store concept in the main store and the twelve other branches works, as does online trading.
According to the report in “”, negotiating circles are speculating that the entire Breuninger Group could be sold on the basis of a company value of 2.5 billion euros. After deducting debts, the purchase price could be around 2 billion euros, with around 1.8 billion euros likely to be for the real estate alone. The first offers should be available by the end of October. According to a list from the investment bank Macquarie, 31 companies have expressed interest in Breuninger, including both financial investors and retail companies.
Breuninger itself did not want to confirm or deny the planned sale: “We cannot provide any information on the questions you have asked, as Breuninger generally does not comment on market rumors,” the company said in response to Capital’s query.
In 2023, the turnover generated by the approximately 6,500 employees was still 1.5 billion. According to Breuninger, this is an increase of seven percent compared to 2019. Breuninger makes half of its turnover through its online business. Bad business is therefore unlikely to be a reason for the divestment plans that Willem van Agtmael (77) and Wienand Meilicke (79) apparently have. Their families own the majority of Breuninger. The upscale price segment has so far been spared in the German fashion industry, which is plagued by bankruptcies.
KaDeWe buyer Central Group in discussion
But how concrete and how far along is the possible sale – and how seriously interested are potential buyers? According to “Wiwo”, well-known takeover candidates have already come forward: El Corte Ingles from Spain, Galeries Lafayette from France, Richard Baker and the Central Group from Thailand, which recently acquired the KaDeWe Group. According to industry expert Jürgen Müller on the portal profashionals.de, the latter option in particular would offer considerable synergy advantages: the KaDeWe stores and Breuninger would become the luxury market leaders, the online know-how would boost both and the Central Group would be in a strong negotiating position in purchasing with its remaining portfolio – Selfridges, Globus, De Bijenkorf and La Rinascente. This is true of luxury brands, which are increasingly more keen on their own stores and online shops than traditional wholesalers.
Today, the Central Group has 42 stores in eight countries, making the company owned by the billionaire Chirathivat family the largest luxury retailer in Europe. The family also owns hotels in Japan and Austria. Nevertheless, Thailand remains the group’s main base. Here, it is the market leader in shopping centers and continues to operate traditional department stores, hotels and restaurants. It also builds residential complexes in Thailand and, according to its own statements, is the leading developer and operator of office buildings.
The Central Group is best known in Europe for its collaboration with René Benko’s defunct Signa Group. After the series of bankruptcies at Signa, the Central Group recently acquired Benko’s shares in the KaDeWe Group. The famous KaDeWe property in Berlin has also belonged to the Central Group since this summer. When asked by Capital, the Central Group did not want to comment: “We will not comment on the speculation,” the company said.
It is of course also conceivable that Breuninger could be broken up and the real estate and the actual retailer sold separately. However, such strategies, i.e. splitting up and re-renting, turned out to be a major burden, and not just in the Karstadt-Kaufhof saga.
Properties should be sold separately, but to whom?
According to the report by “Wirtschaftswoche”, the retail business and real estate will definitely be sold separately. It remains unclear whether all of the locations used by Breuninger are owned by the family. According to the report, the three Frankfurt-based fund companies Deka, DWS and Union Investment, all three providers of open-ended real estate funds, are among the potential buyers. The US bank Morgan Stanley and the private equity company Apollo are also mentioned.
Neither DWS, Deka, Union Investment nor Morgan Stanley wanted to comment on the report when Capital asked them about it, and Apollo initially left a request unanswered. Behind closed doors, however, it was said that a few names of the “usual suspects” had apparently been dropped in order to initiate the sales process. One of the potential buyers named in the report said he was definitely not interested in the Breuninger properties. Another was surprised. “That’s the first I’ve heard about it,” was the response to Capital’s query.
The 14th Breuninger branch is due to open on October 17th in the Westfield Quartier in Hamburg’s Hafencity. More may be known by then. That would be important for many employees. The Verdi union does not see any major threat to the 6,500 jobs for the time being. “I am less worried about job security. Breuninger is in a much better position than other textile retailers,” says Wolfgang Krüger, who heads the trade department at Verdi in Baden-Württemberg. Some employees are certainly worried.
Source: Stern
