Hudson's Bay Company

[Blovertis]

If I were in their shoes, I'd convert the Bloor-Yonge Bay into an L&T (maybe losing a couple of floors) and spend a fair amount giving it some street presence at that intersection, which is near the heart of Toronto's high-end shopping district.

As for the Queen store, I don't know whether it's currently profitable or whether it ever could be at that size. I wouldn't be surprised to see it closed.

 

[Towered]

Woodbine Bay - R.I.P. - This store is destined to close down.

Good, it's in the way of my desired Sheppard extension.

 

[TJ O'Pootertoot]

It is not for sure - it is speculation on toforumer's part.

42

That makes more sense. If they have to go "northern GTA" they could go as far as Upper Canada Mall which, like Fairview and Promenade, is in the midst of a more upscale branding. There's no room at Promenade (unless they boot Sears) and L&T doesn't seem fit for Vaughan Mills.

If Centrepoint is going to get a kick in the pants from the new subway, turning that Bay into a L&T might be the logical thing to do.

I kinda have a soft spot for The Bay and I'll be sorry to see them go.

 

[interchange42]

Good, it's in the way of my desired Sheppard extension.

I am inclined to agree with toforumer's speculation about the Woodbine location, but it's still just speculation. Sheppard stays on hold.

I kinda have a soft spot for The Bay and I'll be sorry to see them go.

They're not all going - as far as we know...

42

 

[ShonTron]

The Bay has closed a number of stores in the past few months. The Shoppers World Bay closed, with a Sears Outlet Store temporarily replacing it (as if Brampton doesn't have enough Sears Outlets already). There's rumours that the owners of Shoppers is looking at repurposing that space and going through another round of boxing, according to Brampton Transit, which is really wanting to get a new space for their terminal.

 

[k.w.l.]

The title of this thread is a little misleading - L&T isn't buying HBC, NDRC Equity Partners is. They also happen to own L&T, and have turned it around quite nicely in the last two years. Hopefully they'll be able to do the same with HBC. This is not at all a death sentence for HBC, quite the opposite in fact.

From the Star:
http://www.thestar.com/Business/article/461506

New owner to spruce up Bay

The Hudson’s Bay Co. has been purchased by the owner of American department store chain Lord & Taylor, which plans to expand its brand into Canada and give a fresh approach to both The Bay and Zellers.
HBC, which has a 338-year history that contributed to the exploration and development of large parts of Canada, has been under American ownership since 2006, when it was bought for $1.1 billion by entrepreneur Jerry Zucker.

Since Zucker’s death in April, there had been speculation that HBC would be sold.

The buyer, New York-based NRDC Equity Partners, plans to give HBC operations a major facelift that will expand on the behind-the-scenes work that Zucker had initiated..

NRDC launched a similar plan in 2006 when it acquired the Lord & Taylor group for $1.2 billion in cash and took a bottom-up approach to reworking the image of the company.

NRDC also owns Fortunoff jewellery stores and Creative Design Studios home-decor chain.

The value of the deal hasn’t been publicly disclosed, but representatives for The Bay and NRDC have said it’s “slightly†higher than the initial sale price of $1.1 billion two years ago.

The combined company, to be known as the Hudson’s Bay Trading Co., has 75,000 employees and annual sales totalling more than US$8 billion.

Richard Baker, a principal with the new owner, becomes CEO of Hudson’s Bay Trading Co. and 38th governor of the Hudson’s Bay Co. He said NRDC will make a new investment of $500 million in the project.

“Enormous potential exists by upgrading the offerings at both The Bay and Zellers and by bringing Lord & Taylor, Fortunoff & CDS into the mix,†Baker said.

He said Lord & Taylor is set to launch 10 to 15 stores in Canada, filling a gap in the Canadian retail landscape between the mid-market Bay department stores and the more upscale Holt Renfrew chain.

â€We are not closing any Bay stores to open up Lord & Taylor, and the primary focus is to improve The Bay business,†Baker said in an interview.

Those improvements include bringing in more outside brands, improving customer service and broadening product selection, he said, noting that the company will adopt a more competitive approach to gaining market share.

Since the demise of the legendary Eaton’s chain, The Bay’s main direct competitor has been Sears department stores owned by Sears Canada Inc. (TSX:SCC), which acquired a few of the Eaton’s locations and added them to its existing chain.

Prior to that, the Canadian department store chain underwent a period of consolidation — including HBC’s acquisition of the Woodward’s and Simpsons chains — that left very few retailers offering The Bay’s broad range of fashion, jewelry, housewares, appliances, furniture and electronics.

“In Canada, The Bay has not had to deal with a lot of competition so we believe they haven’t been as aggressive and focused on service and price and the quality and selection of the merchandise as they could be,†Baker said.

With the plan, The Bay could wind up having several stores, such as a Lord & Taylor location or Fortunoff jewelry store under its roof

“Many of the (existing) stores are oversized and we think that by bringing in other brands within the box we can make the stores more efficient,†Baker said.

Reworking the face of Hudson’s Bay Co. comes two years after Baker and his team gave operations at Lord & Taylor a fresh coat of paint, revamping everything from advertising to the look of bags and boxes shoppers took home.

“We worked with the vendors in order to bring in all kinds of new brands that weren’t presently sold at Lord & Taylor and we moved the business up-market that way,†Baker said.

“There’s tremendous opportunities at The Bay in order to modify the offering in order to be attractive to a larger segment to the population.â€

Zellers — a national discount department chain similar to Target in the United States — will undergo a similar initiative with a focus on lower priced options aimed at creating a “more exciting place to shop,†Baker said.

“Jerry Zucker and his team did a phenomenal job over the last two years, but they were doing a lot of back-of-the-house inventory optimization,†he said. “You can’t just tinker in the background to be more efficient. You have to drive the top-line.â€

While Baked denied that any of The Bay locations will switch signs to Lord & Taylor, that plan might change, suggested Richard Talbot, the chief executive of retail watcher Talbot Consultants International.

“Having the Lord & Taylor banner in their back pocket, they’ve got an extra option there. They could rebrand the downtown stores Lord & Taylor and keep the suburban stores as The Bay,†he said.

“Over the last couple of years under the Zucker regime, they’ve had a good look at which stores are going to work and what aren’t. They haven’t made any major changes, and that information is going to be available.â€

NRDC was a minority owner along with Zucker’s InterTech Group in Hudson’s Bay Co., which was founded in 1670 and is the oldest continually operating company in North America.

As part of the new changes, the company will replace Hudson’s Bay chief executive Rob Johnston with a new leader who will be announced tomorrow. Johnston is a Montreal native who orchestrated the takeover by Zucker.

Both The Bay and Zellers will get new chief executives in the longer term

 

[casaguy]

^Thank you for clearing up the mistakes in how this news came out today.

The Bay WILL NOT be changing/losing its name.

 

[adma]

I can't picture Hillcrest's Bay going L&T, in part because I can't picture Hillcrest itself lasting...

 

[toforumer]

^Thank you for clearing up the mistakes in how this news came out today.

The Bay WILL NOT be changing/losing its name.

No, just the poor performing Bay stores will be closing shop.


I guess the rumor I heard about Home Outfitters being sold off is true. There's no mention of any plans for Home Outfitters which leads me to believe it'll be sold off pretty soon.

 

[adma]

And of course, imagine the Zellers-being-sold-off-to-Target scenario.

One thing to regret about the eclipse of the Bay, though

Somehow, I can't see L&T selling those without wincing.

 

[vancouverguy_76]

I believe they are only transforming some Bay locations. Zellers is a completely different banner with a different target demographic. Lord & Taylor will be targeting the same demographic that The Bay wasn't trying but a little higher class, basically in between The Bay and Holt Renfrew. The Zellers locations are primarily in areas that fit their demographic shoppers so obviously a Lord & Taylor popping up in that area would not happen.

Zellers has some very exceptional locations in some 'first rate' malls. Some Zellers locations also have L&T-sized square footages. Given that the Bay will keep its current nameplate, I am guessing that more than one Zellers location in better malls could be converted to L&T banners.

I'd question the conversion of the Yonge & Bloor Bay to a Lord and Taylor. The ceilings are so low!!! I'd wish them luck with that one... subdivision of the Queen Street store is more likely in my opinion.

I wonder if Quebec's french language laws would affect expansion of L&T in Quebec? Just throwing that out there

Here's my guess for for potential L&T locations, West-to-East. I'm adding more locations than 10-15, so obviously not all of these would be up for conversion:
-Vancouver Oakridge Centre, replacing Zellers (80,000 sq ft), or an entirely new Lord & Taylor store as part of a new Oakridge expansion (110,000-140,000 square feet)
-Vancouver Downtown: 200,000 sq ft L&T within current 650,000 sq ft Bay store. Zellers and Fortunoff on two 80,000 sq ft concourse levels, and 300,000 sq ft Bay store.
-Burnaby Metropolis at Metrotown-Zellers-115,586 square feet
-Edmonton - West Edmonton Mall-Zellers
-Calgary Downtown: 120,000 L&T within current 500,000 sq ft Bay store. Lower level Zellers-70,000 sq ft, 240,000 sq ft Bay store, and 70,000 sq ft Fortunoff on the 6th floor
-Calgary Chinook Centre-Zellers-115,586 sq ft
-Winnipeg Downtown (Within current 675,000 sq ft Bay store)
-Winnipeg Polo Park-Zellers-97,201 sq ft
-Toronto Queen Street: 300,000 sq ft L&T within current 975,000 sq ft Bay store, to be located on Yonge Street side. 400,000 square foot Bay store, Basement Zellers, and upper level Fortunoff in excess of 100,000 square feet.
-Toronto Yonge & Bloor - Current store roughly 340,000 sq ft: Good luck with the low ceilings!
-Toronto Yorkdale: 100,000 square feet of the Bay's 300,000 square foot store. Remaining 200,000 square feet for the Bay, or possible outward expansion for further square footage
-Toronto Sherway Gardens - Conversion of part of the Bay, with some new construction given the Bay is only 223,447 sq ft
-Mississauga Square One-Zellers-160,000 sq ft
-Newmarket Upper Canada Mall- Zellers-116,015 sq ft
-Ottawa Downtown (Rideau)- Within current Bay store
-Montreal Downtown - within current Bay store, possibly the St. Catherine Street side with four above-grade floors.
-Montreal Rockland Centre - Bay subdivision or new construction (not likely though as Bay Rockland is only 153,648 sq ft)
-Quebec City Place Laurier-Zellers-133,700 sq ft

Just my two cents... I'm sure the future will show that at least some of these guesses will be correct.

 

[adma]

-Toronto Yorkdale: 100,000-120,000 square feet of the Bay's 300,000 square foot store, including possible new space expansion of the Bay. Or new construction

Though the remaining external elegance of Parkin's Simpson store might suit L&T just fine...

 

[vancouverguy_76]

Queen Street Store Split-Up Possibly Confirmed...

http://www.nytimes.com/2008/07/17/business/worldbusiness/17hudson.html?ref=business

Note below that a Lord & Taylor/Bay combination is already being considered for Toronto's Queen Street Bay store.

As well, free-standing Fortunoff shops may open, likely in locations where a current HBC property used for L&T would not have room for a Fortunoff home furnishings section.

Published: July 17, 2008

OTTAWA — The Hudson’s Bay Company, North America’s oldest name in retailing, will have some buildings gain the comparatively youthful banner of Lord & Taylor after its purchase on Wednesday by the private equity firm NRDC Equity Partners.
Skip to next paragraph

Terms were not disclosed. The sale comes about two and half years after the 338-year-old Hudson’s Bay was acquired for 860.4 million Canadian dollars and then taken private by Jerry Zucker, a technology and textiles investor from Charleston, S.C. Lord & Taylor was started a mere 182 years ago.

The sale on Wednesday to NRDC, which had a minority stake in Hudson’s Bay in addition to owning Lord & Taylor, appears related to Mr. Zucker’s death three months ago.

NRDC immediately announced that it would partly convert about 10 to 15 of Hudson’s Bay’s 94 full-line department stores, which are commonly known as The Bay, into Lord & Taylor outlets, a decision that surprised some analysts.

“I don’t think it’s a very well-known name in Canada except in some cities near the border,†said Omer Malik, who leads retail analysis at DBRS, a debt rating agency in Toronto.

But an even larger problem than building Lord & Taylor’s name in Canada may be the historic status of Hudson’s Bay. Much of what is now Western and Northern Canada was once fur trading territory controlled by the company. The passing of the Hudson’s Bay into the hands of an American, Mr. Zucker, was considered a scandal by some Canadians.

But under Mr. Zucker, the company played up its history, offering a line of products based on the distinctively patterned, wool blankets it had once traded for furs. Its stores are now promoting a line of clothing that will be worn by Canadian athletes at the coming Olympics.

“Canadians will want to be sure that The Bay stays The Bay,†Mr. Malik said.

In an apparent bid to avoid controversy, Richard A. Baker, the chief executive of NRDC Equity, said the new owner would not fully convert Bay outlets to Lord & Taylor stores. Instead large stores, like the 900,000-square-foot flagship in downtown Toronto, will be reduced to 300,000 to 400,000 square feet, and a Lord & Taylor store will take over some or all of the other space.

“If it works, it works,†said Mr. Baker, who will become the 38th governor of Hudson’s Bay, as the company’s chairman is known. “But the primary focus is to make The Bay better.â€

Under the plan, Mr. Baker said that Lord & Taylor will try to position itself between The Bay and Holt Renfrew, a small, high-end chain.

In 1999, Sears Canada tried to fill that same market by buying the bankrupt remains of the T. Eaton Company, Canada’s other national department store chain. It revived several Eaton stores under their old name, filling them with fashionable and more expensive merchandise. The experiment failed and stores were closed or converted into standard Sears outlets.

Mr. Baker said Lord & Taylor had a “huge advantage†over the Sears in that it has well-established relationships with suppliers of higher-end products.

Fortunoff, a jewelry and home furnishings retailer owned by NRDC, will open departments within Bay stores as well as stand alone properties in Canada.

While the Bay may attract the most attention, the company’s overall performance will be determined by its Zellers discount chain, which has about 280 stores.

Zellers has been dealing with increased competition from Wal-Mart Canada by making its stores more like those of Target, which does not operate in Canada.

 

[ganjavih]

I wonder if Quebec's french language laws would affect expansion of L&T in Quebec? Just throwing that out there

There are plenty of big chains that successfully operate in Quebec... all they have to have is French signs, that's all. No biggie.

 

[yyzer]

Lord et Taylor.....