April 5, 2017 / 3:25 PM / 6 months ago

UPDATE 2-Hudson's Bay eyes 'major reinvention,' seeks more deals

(Updates shares to close, adds IPO comments)

By Solarina Ho

TORONTO, April 5 (Reuters) - Canadian department store operator Hudson’s Bay Co said on Wednesday it was looking at a “major reinvention” of its business as it seeks to improve performance and further reduce costs.

Executives also reiterated to investors in a conference call that acquisitions remained part of the company’s corporate strategy. But they would not comment on reports it was in exploratory talks with debt-laden luxury retailer Neiman Marcus Group, following a failed effort to bid for Macy’s Inc.

“In no way would we do an acquisition that affected our debt ratios and impacted our existing business in a material way, but we do view ourselves as a global consolidator,” Chairman Richard Baker said from the Netherlands, where the company is planning to open more than a dozen Hudson’s Bay and Saks OFF 5th stores.

The stock, which had fallen more than 10 percent this week ahead of results, rose 7.7 percent to close at C$10.45 on Wednesday on the Toronto Stock Exchange.

The Saks Fifth Avenue and Lord & Taylor owner reported a fourth-quarter loss after markets closed on Tuesday.

Its results mirrored a wider trend in retail, especially department stores in the United States and Europe, which have been hurt by changing consumer trends and fierce competition.

Earlier this year, Hudson’s Bay said it was undergoing an operations review and was expecting initial annualized savings of C$75 million. Executives told analysts that was a “first step” with more to come.

“It is a major league, full-time effort in our company right now,” said Baker. “We’re not just looking at a little tinkering with the business model. We are looking on major reinvention and change in the business.”

Baker also used stronger language than previously regarding an initial public offering of its real estate joint ventures, formed two years ago.

“What we should’ve done and what we should be doing as quick as possible is IPO-ing our U.S. real estate portfolio and/or IPO-ing our Canadian real estate portfolio,” he said, adding that other options were still possible.

“Maybe in hindsight, we would have been better off IPO-ing the portfolio six months ago or eight months ago.”

Founded in 1670, Hudson’s Bay began primarily as a fur trading business. It once owned more than 40 percent of what is now Canada, and a significant portion of what became Minnesota and North Dakota. It was acquired in 2008 by mall developer NRDC Equity Partners, headed by Baker, and went public in 2012.

Reporting by Solarina Ho; Editing by Nick Zieminski and Peter Cooney

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