América Retail | Homepage
Monday, July 24, 2017

La Primera Comunidad del Retail y Consumo Masivo en Latino América

Canada: Pressure mounts on Hudson’s Bay as shareholders back activist push

Canada: Pressure mounts on Hudson’s Bay as shareholders back activist push

Julio 11, 2017

Autor/Fuente: Reuters Canada 👤Periodista: María Alejandra Lopez 🕔11.Jul 2017

 

Several Hudson’s Bay Co shareholders are backing an activist’s call to unlock value in the retailer’s estimated $10 billion-plus real estate portfolio, piling pressure on the company to act swiftly to consider its options.

Activist investor Jonathan Litt and his company Land & Buildings, who last month disclosed a 4.3 percent stake in HBC, called the Saks Fifth Avenue owner “a real estate company, full stop,” asking the company board in a June letter to consider monetizing or repurposing its real estate, shuttering stores, or taking the company private.

Four shareholders, who jointly own more than 7 percent of HBC and include two top-ten investors in terms of percentage of holdings, told Reuters they support Litt’s efforts. But a fifth investor with about a 1.4 percent holding supported the board, saying it does not need an activist investor to push it. About 50 percent of HBC shares are held by insiders and investors close to the company.

Litt’s efforts could force HBC to shift its focus away from retail and more into real estate, the area where Richard Baker, the architect behind taking the company public in 2012, made his name.

Many of Litt’s supporters say they bought into HBC for its premium real estate holdings, which include two iconic Fifth Avenue buildings in New York City with a combined 1.33 million square feet of space and a total appraised value close to $4.4 billion. HBC also holds majority stakes in two joint ventures for its other global properties.

The push from Litt taps into shareholder frustration over the company’s share price not reflecting the value of its real estate holdings, and comes at a time when it is struggling to revive sales amid a fundamental downturn in the broader retail industry. Department stores, with their cavernous shopping spaces, have been particularly hard hit by changing consumer preferences and growing online competition.

“Because of the environment we’re in, the company should be open to dramatic change,” said Joshua Varghese, a fund manager at CI Investments with a 4.6 percent stake according to Thomson Reuters data. HBC should reinvest any real estate proceeds into flagship stores and pay down debt, not open more locations, he said.

Litt has not yet engaged with HBC’s board or management in person to discuss his plan, a person familiar with the matter said. Litt’s public relations firm declined to comment.

Jonathan Norwood, a fund manager at Mackenzie Investments, a top 10 shareholder with 2.5 percent ownership, would prefer HBC focus on its property assets over its retail operations.

“If they can right the retail business, that’s just icing on the cake for us,” said Norwood.

Litt and some shareholders say HBC should lease its marquee real estate to other retailers or companies seeking prime office space, or add a hospitality or residential component.

HBC has said it is reviewing Litt’s letter and would respond in due course, and declined to comment further.

To be sure, HBC has said it would look to monetize its real estate portfolio including a possible initial public offering (IPO) for one or both of the joint ventures.

 

Articulos relacionados

Canada: Tim Hortons set to launch order app after months of delay and controversy

Canada: Tim Hortons set to launch order app after months of delay and controversy

Julio 21, 2017

  After an almost four-month delay, Tim Hortons is finally ready to unveil its mobile app that will allow

Canada: Canada’s SeaChoice shifting focus from seafood retail to production

Canada: Canada’s SeaChoice shifting focus from seafood retail to production

Julio 21, 2017

  Canadian NGO SeaChoice is shifting its focus upstream, from ranking seafood products at retail to trying

Canada: Best Buy rebounds in the face of Amazon supremacy

Canada: Best Buy rebounds in the face of Amazon supremacy

Julio 21, 2017

  Five years ago Best Buy Co. looked like a retail dinosaur, another victim of e-commerce

Canada: Loblaws suffers another online security breach

Canada: Loblaws suffers another online security breach

Julio 21, 2017

  According to an email sent out to Loblaws account holders, the security of a ‘small

Estudios: Online shoppers may benefit from NAFTA tweaks, but not Canadian retailers

Estudios: Online shoppers may benefit from NAFTA tweaks, but not Canadian retailers

Julio 21, 2017

  Larry Rosen doesn’t think anyone would be crazy enough to pay more for Prada shoes

Últimas Noticias

SECTIONS

América Retail