Shares in Hudson’s Bay Company (HBC) surged by more than 9% this morning after the Canadian retailer confirmed it has received a bid for its Galeria Kaufhof business from the owner of its principal German competitor – retail estate business Signa Holding.
In a statement yesterday (1 November), which HBC said was published at the request of Investment Industry Regulatory Organisation of Canada (IIROC), the retailer confirmed it has received an “incomplete, non-binding and unsolicited offer with no evidence of financing” from Signa to acquire its German business, as well as other real estate assets.
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Founded in 1670, HBC is one of the oldest companies in North America. Today its banners across North America and Europe include Hudson’s Bay, Lord & Taylor, Saks Fifth Avenue, Gilt, Saks Off 5th, Galeria Kaufhof, the largest department store group in Germany, and Belgium’s only department store group Galeria INNO.
The retailer has recently been driving its European strategy, opening its first store under the Hudson’s Bay banner outside of Canada in Amsterdam this September, followed by a further nine stores across the Netherlands later that month.
Hudson’s Bay drives EU strategy, opens first store outside Canada
Now, HBC says its board intends to review the offer in due course, but warned the offer is subject to “many assumptions, conditions and contingencies”.
“As we’ve previously stated, our European business is an important element of the company’s strategy,” HBC said in the statement. “HBC remains focused on executing its strategy and plans for the upcoming holiday season.”
The retailer added that as a matter of policy, it “does not comment on rumour and speculation and does not plan to comment further unless required by law”.
The news follows a series of strategic transactions announced last month in partnership with WeWork Companies and private equity firm Rhône Capital – including the sale of its Lord & Taylor Fifth Avenue flagship – as part of a relationship designed to maximise the productivity and value of HBC’s global real estate assets.
The partnership will see Rhône Capital buy US$500m (CAD632m) of convertible shares in HBC, and partner with WeWork to form a joint venture – WeWork Property Advisors – to buy the retailer’s Lord & Taylor building in New York for $850m (CAD1.08bn).
HBC to sell Lord & Taylor flagship for US$850m
HBC is currently in the midst of a transformation plan it says will make it more agile, drive its business forward, improve its all-channel business model, and re-align its expenses to focus on growing its digital business.
Designed to increase operational synergies, sharpen capabilities and reduce expenses, the initiative is expected to realise total annual savings of more than CAD350m by the end of fiscal 2018, and includes plans to reduce total headcount by about 2,000, representing around 3% of the company’s more than 66,000 employees.
Last month, HBC said its efforts are “proceeding as expected”.
Hudson’s Bay Company to cut 2,000 jobs as Q1 loss widens
Hudson’s Bay restructuring effort “proceeding as expected”
