Bloor West Villager
Active Member
How can they afford to buy Neiman Marcus when they can't afford to run air conditioning in their existing stores? Who is funding this?
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christiesplits
Senior Member
Definitely feels like a Hail Mary.
Northern Light
Superstar
Richard Baker and NRDC Equity Partners are doing just fine........... and they are the ones, along w/their creditors and co-investors fronting the money to HBC.........
HBC's Parent Compan...... Vultures..........are not short of capital, they've been accruing capital as they bleed HBC dry.
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TossYourJacket
Senior Member
Welcome to the joys of Private Equity. They don't care about any of these businesses succeeding, they just will wring every penny out of them and leave them for dead. These are not people with good intentions. Sadly, Neiman Marcus is just the next casualty of the PE firm that has effectively ruined HBC. Within 5 years those stores won't have working escalators or AC either.
rdaner
Senior Member
I wonder if Nieman Marcus owns the properties that they occupy?
Northern Light
Superstar
The majority are leased.
JasonParis
Moderator
There's really nothing here for Canada. In fact, it will be spun into a separate division. Sak's will likely still leave the market, NM won't enter it, and Hudson's Bay will continue it's slow whither to death.
cslusarc
New Member
FYI: The Bay's website recently rebranded back to Hudson's Bay. For a while, Hudson's Bay experimented with spinning off its website. I guess that failed. The website no longer has any Trusted Brand Partners, it cannot parcel ship to the territories up north and its pricing is higher than instore.
DSC
Superstar
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Deck chairs and sinking ships come to mind. Sad!
Brian S-W
New Member
There’s very strong rumblings of a sucker, oops, a buyer waiting in the wings to buy the spun-off HBC retail operations in Canada which operate under the Hudson’s Bay Company banner. This purchase will also include the online TheBay/Hudson’s Bay Company brand. P.T. Barnum is not one of the potential buyers but his spirit lives on through whoever thinks this is a good idea. Strongest rumours are the new buyer is going to try to…curry favours from existing and new brands to put the spice back into the satora, oops, into the store.
Northern Light
Superstar
HBC's bones aren't actually complete crap......but the business is clearly very damaged goods.
The strong points are they have a good number of strong'ish private labels, the heritage collection (striped blankets et. al), they carry a wide range of product and there's lots of nostalgia for the brand and even for Zellers.
For all of that......the Baker boys have stripped the cupboard bare.......stores in disarray, inventory issues, unpaid bills, lack of music, and working elevators/escalators etc.
The marketing has been poor, the positioning indecisive and and even cutting into the Queen St. Store for Sak's was utterly wrong headed. IF one had wanted to bring Sak's here, it should have gone to the Bloor store with a total custom makeover, better for that brand and better for 'The Bay'.
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Fixing things is an enormous rebuilding of trust with vendors and the customer base, its a huge backlog of maintenance/renos, and its the need to trim the Hudson's Bay banner down to somewhere between 12-35 stores nationally, that have a high 'experience' factor.
I'm not sure about truly reviving Zellers, but if you could put the right team behind it, it can't be a corner of a Bay Store. That's just silly.
Just looking at the HBC brand, I think you need at least 2B in capital infused for renos, fresh product, marketing and paying off the bills.
Reviving Zellers, in a serious way, would be every bit as expensive; though some of the Bay stores one might cut could be repurposed at low cost.
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Based on sales data, I think there is room for one high-end dept. store brand other than Holt's in Canada.
Whether that brand should be Sak's given how badly HBC treated that brand here is another question.
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Final thought...... I'm fascinated at the thought of anyone buying the brand given the required investment to make it work...........that's a lot of capital for what I think is at best a play for a 12-15% return 5 or more years out.
cslusarc
New Member
I wonder if Macy's or Canadian Tire would be a good buyer for the Hudson's Bay and its Canadian operations. I'm thinking Macy's because Hudson's Bay carries many Macy's exclusive brands. I'm thinking Canadian Tire because they are Canada's most successful multi-banner retailers.
What do you all think?
What do you all think?
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Natika33
Active Member
I'm intrigued by the Canadian Tire angle, though these two businesses seem very opposite on the spectrum.
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Northern Light
Superstar
They've also closed stores in Winnipeg and Windsor. The claim is that HVAC systems are overwhelmed by the heat. One store having such a problem is believable........two at the same time, unlikely......at least 5 across 3 provinces? To the extent that its true, it would certainly reflect a complete under investment in maintenance.