Hudson Bay Company sold again - this time it's different

The rumoured purchase of the Hudson Bay Company by NRDC Equity Partners became reality today. 

The sale of HBC to another American may not be noteworthy to those who already lamented its passing from Canadian hands when Jerry Zucker acquired it in 2006. However, there are several aspects of this latest move that are noteworthy.

First, NRDC already owns the Lord & Taylor department store chain. NRDC’s owner, Richard Baker, is credited with a significant turnaround in that chain’s fortunes and turnaround skill is something that could benefit HBC.

More importantly, the Lord & Taylor connection is a terrific synergy for The Bay in particular, and the running of the large retail portfolio in general. In fact, the announcement points to 10-15 Lord & Taylor stores coming to Canada with some or all as converted Bay stores. These will likely be the more urbanite, downtown stores. This in itself will be a more tangible change to this Canadian icon than anything seen under Zucker’s reign.

Lord & Taylor, while still battling to full recovery in the U.S. would occupy a unique niche here, in an upscale position closer to Holt Renfrew. The Bay was never able to make that move, with too many years of “Bay Day” baggage and drilled-home customer perceptions. Depending on timing, this will make for interesting viewing, balancing Holt’s staggering success with the looming retrenching of consumers in a flat economy.

Jerry Zucker and Robert Johnston (CEO) had stabilized the organization. As a minority shareholder, Baker would be privy to the challenges and strategy being implemented. Baker’s successes elsewhere seemed more activist, or hand’s on than Zucker’s patient course of improvement. This suggests other changes across the broader network of Bay stores, as well as Home Outfitters and Zellers may be in store.

While I remain convinced the traditional department store concept is a relic of a past shopping era, this will be fun to watch and might be the last real chance the company has in its current form.

Related Canwest News article: www.canada.com/vancouversun/news/business/story.html