His Signa Group took over the furniture chain Kika/Leiner from the Steinhoff Group in 2018 and, according to its own statements, thus prevented insolvency.
(Photo: Getty Images for Oberpollinger/ )
Vienna Galeria owner René Benko has sealed a deal worth millions in his native Austria. It was officially announced on Thursday that his Signa Group had sold the 40 remaining properties belonging to the furniture chain Kika/Leiner to the real estate company Supernova owned by the German investor Frank Albert. A group around the Kika/Leiner managing director Hermann Wieser takes over the operative business.
Signa has thus said goodbye to the furniture chain, which it acquired from the ailing Steinhoff Group in 2018. The South African company with German roots got into financial difficulties as a result of a balance sheet scandal and had to sell various furniture retailers.
Signa announced on Thursday that the sale was made for “strategic reasons”. But it wasn’t an easy decision, admits Signa Holding boss Christoph Stadlhuber. There are increasing signs that Signa is consolidating its business after years of aggressive growth. Because the deal isn’t the first surprise sale in recent times.
In March it was announced that Signa was selling a 49.9 percent stake in the property of the luxury department store KaDeWe in Berlin. In May, Signa also sold a commercial building on Kärntner Strasse in Vienna where Apple is renting.
In Germany, the Signa Group includes the department store giant Galeria. This is suffering severely from the structural change in the department store business and was also hit hard by the corona pandemic. The bankruptcy proceedings only ended this week. The restructuring plan provides for the closure of almost a third of the last 129 branches.
René Benko should have made a profit with Kika/Leiner
Neither side made official statements about how much Signa had once paid for Kika/Leiner and how high the transaction price was. According to Austrian media reports, Signa paid around 430 million euros for Kika/Leiner and has now received 400 million euros for the company.
>> Read also: Galeria owner René Benko builds a European luxury department store empire
That doesn’t mean, however, that Signa made a loss with the deal. Since 2018, Signa has repeatedly sold properties from Kika/Leiner in Austria. In addition, the entire Eastern European business was sold to the Austrian furniture retailer XXXLutz in 2018.
According to reports, these sales have already recouped most of the purchase price. Overall, the takeover of the ailing furniture chain was a “very good investment” despite the difficult market environment, confirmed Signa Holding boss Stadlhuber.
The real estate industry is currently under pressure. Rising interest rates, skyrocketing construction costs and high inflation are causing problems for housing companies and investors. The companies therefore keep their money together or try to raise funds by selling real estate.
The Signa group itself is a nested construct. It consists of several companies mainly engaged in retail and real estate business. Each company has its own supervisory board, its own management and its own group of owners. Signa Holding acts as a bracket above the companies. It is purely an investment company and has no operational function.
Benko has no official function at Signa Group
The private foundation of the Benko family holds the narrow majority of 51 percent. It is striking that the 46-year-old Benko no longer has a formal function at Signa. However, the billionaire is fully committed to the company.
The purchasing company Supernova was founded in 1994 by Frank Albert. The 56-year-old entrepreneur comes from the Sauerland region, but studied in Graz. In Croatia, Slovenia and Slovakia, Supernova mostly operates specialist stores on the outskirts of town. The target audience is the growing middle class in these countries.
In Austria, Supernova took over the Baumax DIY chain from insolvency in 2015. Some of their locations are now rented to Obi.
Kika/Leiner is to be continued as a furniture dealer. Managing Director Hermann Wieser is considered a proven expert in the industry. He managed Kika/Leiner even before Signa got involved and had previously worked for the competitor XXXLutz.
The furniture trade is a competitive business. But property owner Albert is obviously banking on Kika/Leiner being able to hold their own against the dominant providers Ikea and XXXLutz. His credo is: you have to develop real estate. So it is likely that he wants to find other tenants for the properties in addition to Kika/Leiner.
With agency material
More: Galeria: These three branches will remain after all
First publication: 1.6.2023, 10.04 a.m