Canadian Retail Thread

[SpongeG]

The Lougheed Bay is going to close soon so its kinda in limbo now. I wonder if they have made a deal with shape to do something in Brentwood.

The metrotown store is pretty crappy too. It needs a good reno.

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I read an article today actually just before the one about the bay stores that they made a deal with wework in new york as well and will do the same with the lord & taylor store, they will only use the 3 lower floors leasing out the top floors to Wework, reducing the store from 650,000 to 150,000 sq ft.

I think smaller upscale stores is their future, everything is going low end or high end now, trying to be everything as they are now just isn't going to work.

[osmo]

HBC x WeWork actually looks to be a good fit. HBC gets cold hard cash for some of its assets and bubbly WeWork has no shortage of money right now. Lord and Taylor NYC was apparently one of the more expensive per/sqft locations in the city and bubbly WeWoek had no issues buying in. We will now see the same for other well located HBC properties where they can offload much of the top floors with locking in a captive customer base on site to come shop at their stores.

I think HBC will be fine, tbey have been bleeding money but long term the top end for retail will always be around. They are the only department store chain I see being around when I turn 50 here in Canada aside from Holt's and Simons (they all end up merging one day).

[MolsonExport]

fucking assholes at Sears.

Sears demise is Nortel all over again for pensioners, says expert


Sears Employees contribute to their pension plan over many years, and they might not get anything? How the fuck is this possible? Oh, but there is bonus money for executives:

Sears Canada employees angered by bonus plan for key executives

Assholes.

[wave46]

Originally Posted by MolsonExport

fucking assholes at Sears.

Sears demise is Nortel all over again for pensioners, says expert


Sears Employees contribute to their pension plan over many years, and they might not get anything? How the fuck is this possible? Oh, but there is bonus money for executives:

Sears Canada employees angered by bonus plan for key executives

Assholes.

Maybe I don't understand the legalities of the Sears Pension Plan, but the plan should be independent of the corporation, so the employees should get something, right?

It usually happens that these things get underfunded as the company loses money and tries to conserve capital. I'm not sure how that particular plan works - usually the employer contributes a matching percentage of the employee's share, right? I'm not sure that measures (outside of bankruptcy) that allow a company to defer contributions are a good idea.

[casper]

Originally Posted by wave46

Maybe I don't understand the legalities of the Sears Pension Plan, but the plan should be independent of the corporation, so the employees should get something, right?

It usually happens that these things get underfunded as the company loses money and tries to conserve capital. I'm not sure how that particular plan works - usually the employer contributes a matching percentage of the employee's share, right? I'm not sure that measures (outside of bankruptcy) that allow a company to defer contributions are a good idea.

What you are seeing the difference between defined contribution and defined benefit plans.

Today most private sector employers do defined contribution, both the company and employee put money in, it is managed at arms length and what the pensioner gets out the other end is a function of how well the plan is managed.

In the old days, defined benefits plans were used where the employee and employer put money in. However the employer guarantees a certain payout. When the stock market is doing well and the plan has more money that it needs to cover the payouts the employer does not have to put in as much, in bad times they need to put in more. It is not unusual (as is the case with Sears) for pensioners to be able to piggy back on the same group health plans that the active employees have (or an associated plan). When the company disappears so does the group health plan and there is no one to guarantee a certain payout.

The problem with defined benefits plans is the company has this massive liability that can develop over time. That is the reason very few "modern" company do this and the older companies that have been doing are trying to get out. Air Canada is a good example of what is happening these days older employees are on a defined benefits plan and new hires on a defined contribution plan. Government jobs are the only real way to get into a defined benefits plan these days.

[whatnext]

This was noted in the Vancouver forum, but surprisingly not here. If you wanted to mark a point in time that Hudson Bay Co. started to circle the drain, this is it:

Hudson's Bay Co. has put its flagship store in downtown Vancouver on the auction block, a move that could fetch as much as $900-million and help appease anxious investors.

Toronto-based HBC, which runs its namesake, Saks Fifth Avenue and Lord & Taylor chains among others, has hired real estate advisers CBRE and Brookfield Financial Corp. to find a buyer for its Hudson's Bay store in downtown Vancouver to try to cash in on a hot commercial property market, industry sources say...

https://beta.theglobeandmail.com/rep...ticle36753518/

[ue]

Originally Posted by whatnext

This was noted in the Vancouver forum, but surprisingly not here. If you wanted to mark a point in time that Hudson Bay Co. started to circle the drain, this is it:

Hudson's Bay Co. has put its flagship store in downtown Vancouver on the auction block, a move that could fetch as much as $900-million and help appease anxious investors.

Toronto-based HBC, which runs its namesake, Saks Fifth Avenue and Lord & Taylor chains among others, has hired real estate advisers CBRE and Brookfield Financial Corp. to find a buyer for its Hudson's Bay store in downtown Vancouver to try to cash in on a hot commercial property market, industry sources say...

https://beta.theglobeandmail.com/rep...ticle36753518/

Holy shit...

[WhipperSnapper]

Selling their flagship properties and leasing back the space is a smart move whether it's out of desperation (i.e. circling the drain) or not.

[whatnext]

Originally Posted by WhipperSnapper

Selling their flagship properties and leasing back the space is a smart move whether it's out of desperation (i.e. circling the drain) or not.

Just like it was a smart move for Eatons to do it, and Woodwards before then? It always marks the start of a death spiral.

It says something about Vancouver's whacked land prices that this store is valued at close to a billion dollars.

[MonctonRad]

Originally Posted by whatnext

Just like it was a smart move for Eatons to do it, and Woodwards before then? It always marks the start of a death spiral.

It says something about Vancouver's whacked land prices that this store is valued at close to a billion dollars.

It depends on where the $900M goes. If it's used to pay off debt or reinvest in other properties then that's OK. If it's used as a quickee dividend for the investors then HBC is fucked.......

[WhipperSnapper]

Originally Posted by whatnext

Just like it was a smart move for Eatons to do it, and Woodwards before then? It always marks the start of a death spiral.

It says something about Vancouver's whacked land prices that this store is valued at close to a billion dollars.

They will also have to reinvest smartly in their stores and branding which Eatons didn't do. Changing the store colours to "Aubergine"? LOL. I can cherrypick too. I can gives a long list of retail operations that divested of their real estate holdings and continue to go strong. I can also give you names of defunct businesses that took their retail holdings down with the ship.

The $650 million they got for the Toronto flagship years ago helped to pay down the cost of the renovations that, on the surface, look like it's working well for them. It's busy. They also saved hundreds of millions not having to pay to reskin the deteriorated, precast office tower. Real estate is not their core business.

[LeftCoaster]

Originally Posted by WhipperSnapper

Real estate is not their core business.

Exactly. With cap rates the way they are there is no better time to divest this asset and they are being rewarded by waiting.

[whatnext]

Originally Posted by WhipperSnapper

They will also have to reinvest smartly in their stores and branding which Eatons didn't do. Changing the store colours to "Aubergine"? LOL. I can cherrypick too. I can gives a long list of retail operations that divested of their real estate holdings and continue to go strong. I can also give you names of defunct businesses that took their retail holdings down with the ship.

The $650 million they got for the Toronto flagship years ago helped to pay down the cost of the renovations that, on the surface, look like it's working well for them. It's busy. They also saved hundreds of millions not having to pay to reskin the deteriorated, precast office tower. Real estate is not their core business.

The Bay just redid their downtown Vancouver store, so you're celebrating the fact they can blow that kind of money again renovating a smaller store.

[240glt]

While I'd normally agree that businesses divesting from real estate holdings to focus on core business is neither abnormal nor an indicator of that businesses strength, in HBC's case I do think it's only a matter of time before it suffers the same fate as the many other department stores that have failed over the years. HBC just seems to be holding on a little longer

[MolsonExport]

Originally Posted by whatnext

This was noted in the Vancouver forum, but surprisingly not here. If you wanted to mark a point in time that Hudson Bay Co. started to circle the drain, this is it:

Hudson's Bay Co. has put its flagship store in downtown Vancouver on the auction block, a move that could fetch as much as $900-million and help appease anxious investors.

Toronto-based HBC, which runs its namesake, Saks Fifth Avenue and Lord & Taylor chains among others, has hired real estate advisers CBRE and Brookfield Financial Corp. to find a buyer for its Hudson's Bay store in downtown Vancouver to try to cash in on a hot commercial property market, industry sources say...

https://beta.theglobeandmail.com/rep...ticle36753518/

yeah this is not a positive development. Not HBC. The last man standing. And one of the few places that have a half-decent selection on mid-range apparel for men. Mind you, outside of the big urban flagship stores in Montreal, Toronto, Vancouver (and I suppose a few other big cities, but I cannot comment for lack of experience), the selection at the typical suburban mall locations is...really limited.

[ue]

^ I've heard the St-Catherine flagship isn't on the same par as the Granville and Queen flagships, though I've only walked past the St-Catherine store myself.

If HBC could become more "Simons-sized" in footprint, focusing on key locations in urban locales, and ensuring their stores are of the same high calibre (seriously, even with renos, the Bay stores in Edmonton are mostly shit), they'd probably be able to survive.

[SpongeG]

the west vancouver store compared to the downtown store is crap, as is metrotown, guildford, oakridge etc. They need to up the brands in the suburban stores and renovate them to a better standard.

[Proof Sheet]

Originally Posted by MolsonExport

yeah this is not a positive development. Not HBC. The last man standing. And one of the few places that have a half-decent selection on mid-range apparel for men. Mind you, outside of the big urban flagship stores in Montreal, Toronto, Vancouver (and I suppose a few other big cities, but I cannot comment for lack of experience), the selection at the typical suburban mall locations is...really limited.

Makes you look back wistfully to the golden age of retail before the crisis

https://www.malls.com/upload/resize_...a39510a0f4.jpg

[MolsonExport]

dammit, the Bari Shopping Mall crisis...all over again!

[Loco101]

HBC stores really need a more stable and realistic owner and operator. At this point, the only ones I can really see to do it are the Westons or Canadian Tire Corp.