Saks Fifth Avenue owner to buy Germany's biggest stores chain

The owner of US stores chain Saks Fifth Avenue, Hudson's Bay, is buying Germany's biggest department store chain, Kaufhof, for €2.8bn (£2.03bn).

Kaufhof, currently owned by Metro, owns 120 stores across Germany.

Hudson's Bay (HBC), based in Toronto, bought high-end retailer Saks Fifth Avenue in 2013 for $2.14bn (£1.38bn).

The deal would give Hudson's Bay more than 450 stores across four countries. HBC's Richard Baker said it been hoping to expand in Europe for some time.

Mr Baker said: "We have been carefully surveying the European retail landscape for many years for a potential expansion opportunity and have watched Kaufhof build on its exceptional real estate to become the #1 department store in Germany."

Retail experts say the deal could be tricky. "It's difficult for any foreigner to penetrate any developed market," Thomas Roeb, retail consultant, says. "Whenever you look, entering a mature retail market is always a risky venture."

Mr Roeb also points out that department stores have been in steady decline since the early 1980s.

The world's biggest retailer, Wal-Mart, moved into the German market in 1998, only to retreat in 2006, selling its 85 German stores to Metro