Canada’s Hudson’s Bay is reportedly in talks with Austrian property and retail group Signa Holding to sell at least part of its German department store business Kaufhof.

Sources have told Reuters that while Hudson’s Bay rejected a US$3.7 billion bid by Signa for Kaufhof earlier this year, discussions have resumed as the Canadian company tries to restore its ailing North American business.

Reuters reports that rather than a full sale of the business, talks are focused on Signa’s department store division Karstadt buying half of Kaufhof’s property business and a controlling 51 per cent stake in the operating company, with options to buy the remainder later.

Earlier this month, Hudson’s Bay announced it would close 10 Lord & Taylor stores, including the brand’s New York City flagship.