Hudson's Bay Co. plans public offering of shares

Michael J. Knell -- Furniture Today, October 18, 2012

TORONTO — Canadian retailer The Hudson's Bay Co. will return to the stock market with an initial public offering of shares planned in the next few months, according to documents filed with securities regulators.

HBC was last traded on the Toronto Stock Exchange in early 2006 before it was taken private by the late Jerry Zucker, a U.S.-based investor who had acquired the company a few months earlier.

It was subsequently sold to its current owner, New York-based NRDC Equity Partners, which also owns Lord & Taylor, the upscale American department store chain, in 2008. HBC acquired Lord & Taylor this past January.

In addition to Lord & Taylor and its 48 stores in the northeastern United States, HBC also operates The Bay, a 90-unit upscale department store in Canada, and Home Outfitters, a 69-unit home décor and accessory specialist.

Two years ago, as part of a strategy to reduce its debt, HBC sold the rights to 186 leases in Canada held by Zellers for $1.8 billion to cheap-chic U.S. retailer Target, which is expected to begin converting the units to its format beginning early in early 2013. Zellers will be gradually phased out as Target starts opening stores.

Both The Bay and Lord & Taylor have a strong big ticket home goods business. While both have active furniture businesses, Lord & Taylor doesn't sell mattresses or major appliances.

Historically, The Bay has been one of Canada's leading and most influential furniture and mattress retailers. Industry insiders place HBC among the country's Top 20 furniture merchants.

In recent years, HBC has worked to revitalize its Bay stores, introducing high-end boutique spaces in its flagship Toronto stores as well as obtaining the rights to produce uniforms and merchandise for Canada's Olympic teams.

Some retail industry analysts note the IPO comes as HBC girds itself to face increased competition, not only from Target but also from Nordstrom, which has already announced it intends to open four Canadian stores - in Calgary, Ottawa, Vancouver and Toronto - in 2014.

Founded by Royal Charter in 1670, Hudson's Bay is the oldest commercial corporation in North America and among the oldest in the world.

In a brief statement filed with regulators, the company said, "The offering is being made through a syndicate of underwriters led by RBC Capital Markets, BMO Capital Markets, CIBC and BofA Merrill Lynch who will act as joint book runners."