Hudson's Bay CEO hints that more real estate sales are in retailer's future
TORONTO - After selling its downtown department store in Toronto, Hudson's Bay Co. executives are looking for other locations to put on the market.
Chief executive Richard Baker said at the retailer's annual meeting on Tuesday that the company is just "in the earliest stages" of unlocking value in its real estate holdings.
"One important distinction of our real estate portfolio compared to other retailers â€” even those who also own millions of square feet â€” is our concentration of value in several marquee assets," Baker told shareholders in a speech.
"We remain committed to surfacing the value of our real estate, which we believe is unappreciated by the market."
Last year, the company struck a $650-million deal to sell and lease back its Queen Street store and Simpson Tower office complex in Toronto, which are across the street from one of the city's biggest shopping malls, the Eaton Centre.
Baker said that agreement was "a glimpse into the power of our assets" and that Hudson's Bay (TSX:HBC) has several properties that could fetch a hefty price on the market.
While he didn't directly say that any locations were for sale, Baker described the Saks Fifth Avenue store in New York City as the company's "crown jewel."
Across Canada, Hudson's Bay has 90 department stores, with several located in the bustling cores of the country's biggest cities, while there 49 Lord & Taylor department stores across mostly the northeastern and mid-Atlantic United States.
The Saks Fifth Avenue luxury brand has 39 department stores in the U.S.
In 2011, Hudson's Bay sold more than 200 Zellers locations in Canada to U.S. discounter Target as part of a $1.8-billion deal.
The move came as the company reworked its strategy to focus on what it says is a growing luxury goods market, which U.S. company Nordstrom also hopes to capture when it opens its first store in Calgary later this year.
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