HBC - or The Hudson's Bay Company - is one of Canada's largest retail groups, as well as North America's oldest company, tracing its roots as far back as 1670. Yet despite its unrivalled heritage in Canada and a well-established lead in upscale apparel, HBC wrestled with exactly the same challenges experienced in the US by Sears and JC Penney - fierce competition from mass-discounters such as Walmart and more recently from online giant Amazon. After 2008, though, the group made a strong recovery under new owner NRDC Private Equity, whose principal Richard Baker became governor & CEO. Baker sold off mass-market chain Zellers - the ill-fated buyer was US discounter Target - and acquired high-end US store Saks Fifth Avenue to focus more directly on better-off customers. HBC took its first steps into Europe in 2015 with the acquisition of Germany's Galeria Kaufhof and made an attempt to expand its presence dramatically in that region over the next couple of years, not least through a joint venture with main German rival Karstadt. Yet progress in Europe was disappointing, and HBC pulled out altogether in 2019, selling its 50% stake to Karstadt. HBC also divested its weaker US chain Lord & Taylor. In early 2020, HBC's chairman Richard Baker succeeded in taking the group private once again at a valuation of around US$1.5bn. His timing couldn't have been better: the Coronavirus scandal soon afterwards forced the temporary closure of all non-essential retailers. In another bold move, the online operations of Saks were spun off in 2021 into a separate company, still controlled by HBC but with a minority private equity partner. That business is now expected to issue an IPO in 2022. The group currently comprises around 89 Hudson's Bay stores in Canada and 167 Saks 5th Avenue and Saks Off 5th outlets in the US, as well as stakes in several real estate joint ventures. For its last reported financial year to Jan 2019, HBC reported revenues of C$9.4bn and a net loss of C$542m. Richard Baker took back the role of CEO once again following the buyback.
Capsule checked 24th April 2020
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Who are HBC's competitors? The group's main department store competitors in Canada are Holt Renfrew and Canadian Tire. In the US, the company competes with the likes of Macy's, Neiman Marcus, Nordstrom, Sears and JC Penney. See Retail index for other companies
Historical profile information for Hudson's Bay Company
Adbrands Daily Update 6th Jan 2020: Hard-pressed HBC finally accepted an offer from a consortium led by its chairman Richard Baker to go private at a valuation of C$2bn (or around $1.5bn US). That ends a prolonged dispute with minority private equity investor Catalyst Group, which had been opposing Baker's original offer worth a little under C$1.9bn. Catalyst had offered its own buyout at C$2bn, funded by high levels of debt, eventually forcing Baker to roase his own price.
Adbrands Daily Update 28th Aug 2019: HBC offloaded its hard-pressed Lord & Taylor department store business in the US to Le Tote, a clothing rental service founded only seven years ago. The sale price is around $75m upfront, with another $33m payable in 2021. HBC gets a minority stake in Le Tote as well as two seats on the board; it also retains the ownership or leases of Lord & Taylor's 38 physical stores, and will be responsible for future rent. However, Le Tote takes over all operations. It's an astonishingly bold move by the virtual start-up, which allows customers to rent apparel and accessories in return for a flat subscription fee starting at $79 per month.
Adbrands Daily Update 11th Jun 2019: HBC made an about-face on its operations in Europe with an agreement to sell its 50% shareholding in Kaufhof Karstadt to partner Signa, bringing an end to the Canadian retailer's presence in Germany. Deal price is $1.5bn, or €1bn. However HBC will retain ownership of stores in the Netherlands pending further restructuring. At the same time, executive chairman Richard Baker and a consortium of other shareholders and investors have presented an offer to take HBC itself private for around $1.6bn, a premium of around 50% above the group's undisturbed valuation.
Adbrands Weekly Update 26th Sep 2018: Canadian retailer HBC has been slowly but steadily expanding its presence in Europe following the acquisition of German chain Galeria Kaufhof three years ago. For the most part, it has been developing brands that were already present in the region, like Saks; but it took a big gamble on the Netherlands by transplanting its core domestic brand Hudson's Bay. It's not been the smoothest of projects, and the group recently sought assistance from German rival Karstadt by merging its local operations in Europe into a new joint venture. However this new spot from local powerhouse TBWA\Neboko is a charmer. But will it be enough to reignite the store's performance in Holland?
Adbrands Weekly Update 12th Jul 2018: Germany's two main department store chains Karstadt and Galeria Kaufhof look set to merge in a new joint venture that will be co-owned by Austrian retail and real estate investor Signa Group - current owner of Karstadt - and Canada's HBC, which acquired Kaufhof in 2015. A merger of the two competing businesses has been under consideration for more than a decade. Signa offered to acquire Kaufhof last year for €3bn, but the deal was rejected by HBC. Now the two companies are in talks to pool ownership, with Signa taking management control and just over 50% of equity.
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