TORONTO (Reuters) - Hudson’s Bay Co (HBC.TO) is planning to open its first namesake department store in Canada in at least five years, the company confirmed on Thursday, even as other competitors are shuttering stores in a brutal retail market.
HBC’s planned opening in Montreal comes as it faces pressure from activist shareholder Jonathan Litt, who is pushing for the company to make better use of its marquee properties, worth more than $10 billion, or consider other options.
Litt revealed a 4.3 percent stake in HBC last month.
The new location comes as other department store chains in North America, as well as some of HBC’s other banners, have struggled. But company executives have said its Hudson’s Bay stores are among its strongest performers.
The new store, which has been in the works for months, will fill a space formerly occupied by Target Corp (TGT.N) in Carrefour Angrignon, an 850,000-square-foot shopping center in southwest Montreal, according to sources familiar with the matter.
The mall generates more than C$430 per square foot in sales, according to the company website, and serves a lower- to mid-market clientele, one of the sources said.
The new store is an incremental addition to HBC’s overall retail expansion plans but comes at a time when shareholders are calling for HBC to capitalize on its real estate and even close some stores.
HBC operates 90 Hudson’s Bay stores in Canada, a number that has not changed since at least 2012 according to company filings. Globally, it had 479 stores as of April 29 this year.
In response to the challenging retail environment, HBC has announced plans to cut about 2,000 jobs but not close stores.
Reuters reported on Wednesday that Euler Hermes, a French credit insurance company, has slashed its trade credit insurance for suppliers of HBC’s Kaufhof chain in Europe.
Meanwhile, a historic HBC property in downtown Montreal that was set to become Canada’s largest Saks location when it was slated to open in fall 2018, had yet to apply for a renovation permit, according to the city.
Still, HBC is on track to launch its first international Hudson’s Bay stores in the Netherlands later in the year and open a number of Saks Off 5th locations, spending between $450 million and $550 million in capital investments this year.
Its expansion stands in contrast to other department stores, most recently, Sears Canada SCC.TO, which kicked off a liquidation sale last week as part of a bankruptcy protection plan that included slashing 2,900 jobs and closing 59 locations, or roughly a quarter of its stores.
Reporting by Solarina Ho and Allison Lampert; Editing by Dan Grebler and Bill Trott