Why Hudson’s Bay Is Shopping For A Takeover Amid 2017’s Retail Bloodbath
The first quarter of the year has deepened a period of bloodletting in the retail industry: Over the last few months, nearly a dozen retailers have filed for Chapter 11 bankruptcy protection and many more have announced major store closure plans and financial restructuring efforts. As retailers slim down their store counts — and in some cases buckle under mounting debt burdens — analysts anticipate a period of consolidation for the industry, in which similar retailers will merge in order to survive. Retailers that position themselves as conglomerates stand to gain, making Hudson’s Bay Company’s growth strategy — leveraging the prime real estate of luxury department stores — particularly intriguing. “We do view ourselves as a global consolidator,” Richard Baker, executive chairman of Hudson’s Bay, told analysts on a conference call in early April, highlighting acquisitions as a key piece of its growth strategy. Neiman Marcus, a luxury department store saddled with nearly $5 billion in debt, may be next on the Canadian department store’s wish list. Sources told The Wall Street Journal in March that Neiman Marcus’ private equity owners were in talks to sell to the Canadian retailer, and analysts say a buy falls in line with Hudson’s Bay’s acquisition history, which over the years has included a number of high-profile, luxury U.S. department store chains such as Saks Fifth Avenue and Lord & Taylor. Neither Hudson’s Bay nor Neiman Marcus would comment to Retail Dive on whether they are in discussions over a deal, but the rumor gives insight into what Hudson’s Bay is looking for in an acquisition and which types of retailers may be next on its shopping list. Read more at Retail Dive.
