This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Hudson's Bay Studies Its Real Estate Options

NEW YORK ( The Deal) -- Hudson's Bay's pursuit of either creating a real estate investment trust for its properties or considering other options such as additional sale-leaseback agreements still appear to be in the works even though the Canadian retailer completed the sale of some of its Toronto properties on Wednesday.

"The Company remains committed to using our significant real estate holdings to unlock additional value for our shareholders and are exploring alternatives to help accomplish that goal," Hudson's Bay spokeswoman Tiffany Bourre said in a Feb. 26 email. "The Toronto sale-leaseback was a one-off transaction and does not change that commitment."

Founded in 1670 as a fur trading business, Toronto-based Hudson's Bay represents the longest continually run company in North America. The company currently operates department store chain Hudson's Bay and kitchen, bed and bath superstore Home Outfitters in Canada, along with Saks Fifth Avenue and Lord & Taylor in the U.S.

Through the sale of its Queen Street store and downtown Toronto complex to The Cadillac Fairview Corp. Ltd., Hudson's Bay garnered C$650 million ($584.7 million) that it said will be used to reduce a debt load that includes loans that were used to support its $2.9 billion acquisition of Saks.

Must Read: Williams Cos. Sells Canadian Assets for $1.2B

Specifically, Hudson's Bay will pay down all of its $300 million second-lien term loan due in 2021 that was bearing interest at 8.25% and $150 million of the $2 billion first-lien term loan due in 2020 bearing interest at 4.75%. The remaining proceeds will be used to pay down the company's revolver.

In connection with the transaction, Hudson Bay has leased both properties from Cadillac Fairview for at least 25 years. Canada's first Saks Fifth Avenue store, which the company anticipates will be launched in the fall of 2015, will be located at the Queen Street property.

The Deal first reported on July 29 that Hudson's Bay intended to place all of its real estate into a public company after acquiring Saks.

Hudson's Bay completed the acquisition of Saks on Nov. 4. It then announced the sale of its Toronto real estate assets on Jan. 27.

After the Jan. 27 announcement, analysts began floating the idea that additional sale-leaseback arrangements for Hudson's Bay's other locations could follow.

The completion of the Saks acquisition and the sale of the Toronto assets came before management changes at Hudson's Bay. On Feb. 10, the company disclosed the resignation of Michael Culhane as CFO. The company has yet to name a replacement for Culhane, who joined Hudson's Bay in 1997 and took over as CFO in 2009. Hudson's Bay president Donald Watros will fill in as acting CFO, with assistance from Douglas Scovanner.

For the third-quarter ended Nov. 2, Hudson's Bay posted C$984.1 million in revenue, up from C$930 million a year earlier. Its loss narrowed to C$124.2 in the period from C$287.2 the year before, while normalized Ebitda slid to C$64.3 million in the third quarter, from C$153.3 million for the same timeframe in 2012.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $95.18 1.64%
FB $117.43 -0.96%
GOOG $692.36 -0.84%
TSLA $232.32 -3.92%
YHOO $36.01 -1.42%


Chart of I:DJI
DOW 17,750.91 -140.25 -0.78%
S&P 500 2,063.37 -18.06 -0.87%
NASDAQ 4,763.2240 -54.37 -1.13%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs