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Lord & Taylor parent acquires Hudson’s Bay Company

Creates North American retail giant

Michael J. Knell -- Furniture Today, July 17, 2008

TORONTO — A new North American retailing powerhouse was born Wednesday when the owners of the upscale U.S. department store Lord & Taylor acquired Hudson’s Bay Company and its four retail banners.

In completing the acquisition, NRDC Equity Partners created a holding company called Hudson’s Bay Trading Company as the parent to HBC and the investment firm’s U.S. retail companies, Lord & Taylor and Fortunoff.

The new combined company will have annual sales of about $8 billion, 75,000 employees and some 650 stores with 55 million square feet of retail spaces across all 10 Canadian provinces and nine U.S. states, mainly in the Northeast.

“By acquiring Hudson’s Bay Company along with previous acquisitions Lord & Taylor and Fortunoff, we will have an unprecedented opportunity to recreate the retail landscape in North America,” said Richard Baker, CEO of NRDC.

Baker also will be CEO of HBTC and will become the 38th governor of the Hudson’s Bay Company, succeeding Anita Zucker. Before the purchase, Baker was a minority shareholder in HBC, holding about a 20% stake, and sat on the board of directors.

NRDC acquired HBC from True North Retail Investments, an affiliate of the InterTech Group, the company founded by the late Jerry Zucker. While the purchase wasn’t disclosed, several media outlets are reporting that NRDC paid slightly more than US$1.1 billion for the remaining 80% of the company.

NRDC also said it is investing $500 million in new equity into HBTC.

“The strategy of the combined company is to create a greater focus on The Bay department store business in Canada with an emphasis on the customer by offering better brands and better service,” NRDC said in a statement.

HBTC is planning to open between 10 and 15 Lord & Taylor stores in Canada while introducing Fortunoff Home Departments and Fortunoff Jewelry stores both within existing Bay department stores as well as freestanding units.

Two of HBC’s banners — The Bay and Zellers — devote significant floor space to furniture and mattresses as well as appliances and consumer electronics while a third, Home Outfitters, carries mainly accent and occasional furniture, with the odd sprinkling of small scale bedrooms, dining rooms and upholstery suites.

Fortunoff carries furniture but not appliances, while department store Lord & Taylor is a fashion specialist.

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Hudson's Bay Co. sold

Jul 20, 2008

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