NRDC Equity snaps up Hudson's Bay Co
By Leah Schnurr
TORONTO (Reuters) - Hudson's Bay Co, the Canadian retailer whose name is synonymous with the country's frontier past, was bought on Wednesday by the U.S.-based private equity fund that owns the Lord & Taylor department store chain, one of the oldest names in American retailing.
NRDC Equity Partners did not place a value on the deal, but said it would invest $500 million in new equity into the combined company, which also owns specialty U.S. retailer Fortunoff and Creative Design Studios.
Founded in 1670, Hudson's Bay Co is deeply entrenched in Canadian history, and is North America's oldest continuously operating company. Its banners include The Bay, Zellers and Home Outfitters, and it has more than 580 stores nationwide.
With Wednesday's deal, the combined companies will make up more than $8 billion in retail sales and employ 75,000 employees, NRDC said in a release.
Richard Baker, NRDC's current chief executive, who will serve as the head of the new holding company called Hudson's Bay Trading Co, said in an interview that the deal will allow for a huge potential in synergies between the companies.
Lord & Taylor could launch 10 to 15 stores in Canada in an effort to bridge the gap between The Bay and the more high-end Holt Renfrew. The stores would be in prime locations, either through existing HBC properties, or within flagship Bay stores.
Lord & Taylor, founded in 1826, is an icon of New York's Fifth Avenue. The department store chain now has 47 locations in the U.S. Northeast.
Baker said the company could take "oversized" Bay locations, such as its 900,000-square-foot store in downtown Toronto, and better utilize the space by putting in a Lord & Taylor or Fortunoff as well. Continued...