Canadian Retail Thread

[whatnext]

As always, the Globe & Mail has a great in-depth piece. Bottom line, don't sell a retail company to an American without any retail experience.

The fall of Hudson’s Bay: How Richard Baker presided over the failure of a retail icon
Susan Krashinsky Robertson Retailing reporter
Published 1 hour ago
Updated 48 minutes ago
For Subscribers

....All the while, Mr. Baker has insisted questions about the company’s financial precarity were “illogical,” partly because it owned a trove of valuable real estate.

And over the years, the company executed a series of real estate deals that generated significant cash – by selling off all or part of its buildings in Canada, and by using special rights on its department store leases to extract payments from landlords who wanted to redevelop their malls.

But at the same time, it spent heavily. The parent company took on debt to acquire Saks Fifth Avenue, and further expanded with other acquisitions that former insiders say drew focus and investment away from Hudson’s Bay....

....“There was more than enough capital generated through monetizing assets in the Canadian business to make the Bay as a department store very successful,” said Mark Foote, a veteran retail executive who spent four years with the Bay as president of Zellers before the discount stores were sold to Target Canada. “They monetized a lot of things in that company, and the money didn’t go back into the business. It went into acquiring a whole bunch of other retail banners,” he said.

Under Mr. Baker’s ownership, the Canadian stores looked increasingly shabby; reports emerged of broken escalators and ventilation systems. As HBC bled cash, fewer and fewer parties were willing to lend money to the company....


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