Hudson's Bay Company completes acquisition of Lord & Taylor
Michael J. Knell -- Furniture Today, January 24, 2012
TORONTO — The Hudson's Bay Company has completed the acquisition of its affiliate, U.S. department store chain Lord & Taylor Holdings, and named Bonnie Brooks, who has served as president and CEO of The Bay since August 2008, to oversee the newly expanded retail operation as president of the Hudson's Bay Company.
Prior to this announcement, Hudson's Bay and Lord & Taylor were side-by-side affiliates. Both were owned Hudson's Bay Trading Company, a holding company owned by NRDC Equity Partners, a retail estate and investment firm owned by Richard Baker.
Both were acquired by NRDC in 2008. Baker then became governor and CEO of Hudson's Bay Company.
Baker will remain in those posts as will Donald Watros, the company's chief operating officer.
"We are fortunate to have both Don Watros and Bonnie Brooks round out the leadership team of the Hudson's Bay Company," Baker said in a statement. "Don's operational and financial expertise has been instrumental in contributing to both The Bay and Lord & Taylor's year-over-year profitability despite the poor economic environment around the globe.
"Bonnie's extraordinary leadership at The Bay and previous global retailing expertise from Lane Crawford are a natural fit to lead this new integrated organization as we move to our next phase of growth and evolution," he said, adding, "The turnaround and speed of growth at The Bay under Bonnie's leadership is unprecedented in modern times."
Lord & Taylor and The Bay will maintain their distinct identities and nameplates while leveraging the merchandising strengths of the organizations to improve and accelerate their continued growth, officials said.
Analysts have praised Brooks for her performance at The Bay. Insiders have reported that after a decade of declining sales, same-stores sales growth for The Bay's 91 units was 6.5% in 2011, building on almost similar growth in 2010.
Having said that, Lord & Taylor is also enjoying something of an uptick. Sources have reported same store sales for its 46-unit chain were up 8% last year and 12% the year before.
As part of a strategy to reduce HBC's debt, Taylor sold the rights to 186 leases held by Zellers for $1.8 billion. Target, the U.S. based rival to Wal-Mart, acquired those leases and is expected to begin converting the units to its format beginning early in 2013.
As part of the restructuring, Hudson's Bay Company invested some $427 million in Lord & Taylor, all of which was used to reduce the latter's debt.
Both The Bay and Lord & Taylor have a strong big ticket home goods business - although, unlike The Bay, Lord & Taylor doesn't sell mattresses or major appliances. Both have active furniture businesses.
In addition to its 42 stores across nine states, Lord & Taylor also operates two Lord & Taylor Home stores. Two new L&T stores are planned for 2012.
In addition to The Bay and its 91 units, Hudson's Bay Company operates another 500 stores under three other banners including Zellers, Home Outfitters and Fields.
"We look forward to an even stronger 2012 with this new leadership structure in place and the strength of two dynamic teams coming together and leading the HBC into the future," Baker said.
Brendan Hoffman, who has served as president and CEO of Lord &Taylor for the past three years, will be leaving the company to pursue another opportunity.