Recently, 338-year-old Canadian retail giant Hudson’s Bay Company, which operates numerous chain nameplates such as discounter Zellers and The Bay department stores, received a takeover bid from U.S. retailer Lord & Taylor. Already a minor shareholder in Hudson’s Bay Company, Lord & Taylor wouldn’t be the first American company to own this brand; the company is already owned by American Anita Zucker, whose late husband, Jerry, gained control of the company in 2006.
On July 16, the sale was complete, and Hudson’s Bay is now part of the Lord & Taylor fold. Now that Lord & Taylor has a more impressive foothold in North America, what – if anything – do you think will happen to the Hudson’s Bay name? Will it float off into the ether like other venerable brands have over the years – Marshall Field’s, Filene’s, McAlpin’s – just to name a few – or will Lord & Taylor realize the brand has enough equity to keep it afloat?
I, personally, wouldn’t want to see the Hudson’s Bay name disappear across Canada, but what I think hasn’t stopped retailers from shifting and consolidating nameplates in the U.S. I think many people are still miffed about what Macy’s did over the past few years, taking away many regional banners and creating a “unified” Macy’s across the entire United States. Was it worth it for them? Time will tell, but the very reasons they used for unifying their holdings have been sort of left by the wayside, with separate, more upscale Macy’s locations popping up in certain places and not others. The issue is probably more weighty in some places rather than others, too; for example, Chicago’s affinity for Marshall Fields has probably cost Macy’s more money and loyalty than the regional banners in other areas, but who can be so sure? Only time will tell.
I think they’re going to keep the HBC name around, not just because they said so but also because they bought the company in part for brand equity. Keep in mind that NRDC bought Lord & Taylor specifically to revive the historic brand, and they’re attempting to do much the same with Fortunoff currently as well.
I heard that about a dozen or so Canadian HBC stores will be converting to the Lord & Taylor nameplate, and that Fortunoff “mini stores” are going to be rolled out in HBC locations all over Canada, but that is the only big change for now. If anything, since Canada has relatively few department store chains (even compared to the U.S.), I think it could be good to add the variety of some L&T locations.
From all I’ve read (which isn’t much I’ll admit) and seen for pictoral examples online of Canadian retail, I noticed something.
The lack of a department store that is NOT a discounter.
Of course there’s only the Hudson Bay and Sears (Canada) chains. There also used to be Eatons and Simpsons, but both of those eventually folded into Sears over the past few decades.
Then on the discounter end, you have Woolco (most locations eventually swalowed up by Wal-Mart), K-mart (defunct), and of course, Zeller’s, which to me I see as Canada’s version of our Target stores.
That all said, The Bay is really the only ‘department store’ left, and considering how old the company is, I don’t know if L&T would want to risk dumping it. In fact, I see this as an opportunity for L&T’s parent to really break out the nameplate in the more stable economy of Canada. Having several L&T locations in Canada will give those folks a more ‘upscale’ choice in shopping, and give malls a new anchor. The Bay and L&T are different enough where there’d be no overlap.
Correction:
“…..I see this as an opportunity for L&T’s parent to really break out the nameplate in the more stable economy of Canada.”
My bad. Was referring to the “Lord & Taylor” name here. I’m sure they have enough Hudson Bay locations as it is.
I really got to learn to proofread before I submit.
I think this will be good for Canada ,Hudson’s Bay Company and NRDC. Hudson’s Bay Company is a bigger company than Lord and Taylor is. I sure HBC is known across Canada and has the bigger name recognition. Zeller’s might also sale some more upscale items. Lord and Taylor/Fortunoff gets a international growth at the same time too. This move gives a win- win for all stores.
NRDC should NOT open Lord & Taylor stores in Canada. For heaven’s sake, L&T just finished shuttering all of its stores outside the Northeast, since the brand didn’t do well outside of its home territory. Plus, while L&T is performing pretty well these days, the chain still has a lot of work to do to catch up and perform as well as Nordstrom, Bloomingdale’s, etc.; the L&T flagship alone is still crying out for renovations. NRDC shouldn’t cause L&T’s management to focus on another big project- bringing the chain to Canada- when its work in the US is far from complete.
just a couple of corrections. K Mart in canada was swallowed by Zellers, Woolco is completely closed , walmart took over all non union locations in 94 and finally, sears sold all shares in simpsons to the bay in the early 80s. The hudsons bay company may have a long history in canada but the bay stores have only been around since the early 70s, they got thier large department stores by takeovers of Simpsons, Henry Morgans, and Woodwards
Chris,
I agree with you on Lord and Taylor still has work to do. NRDC still wants to reduce the Manhattan flagship.
http://www.theglobeandmail.com/servlet/story/RTGAM.20080716.wbaker0716/BNStory/Front
The Manhattan flagship needs some woork. Everytime I go there, the store is always empty and the store is very dark. The 1st floor is the worse. But Lord and Taylor is a good store in general.
There is no way on earth L&T would just dump the Bay name wholesale. There’s too much equity and national pride in it for that to happen.
Although NRDC seems eager to expand the L&T and Fortunoff names north, there simply isn’t the name recognition in Canada. Maybe a few Canadians know the Lord and Taylor name, but Fortunoff (which, let’s not forget, is basically a NYC metro chain only) is entirely unknown here.
Some of the downtown Bay stores may be split in two with new L&T stores taking the other half, but what’s to say that 5 years from now they wouldn’t shut them down and turn them into condos?
There may be some changes at Zellers too. They picked up some big mall locations in the 90s after the demise of chains like Woodwards and Eatons, and they really seem out of place at some of the more super-regional and upscale malls (Micmac Mall in Halifax comes to mind). It wouldn’t surprise me to see NRDC attempt to covert these type of stores to L&T (though, again, I doubt they’d be that successful).
On the other end of the spectrum, one article I read (too lazy to find the link) said that 50% of the Zellers stores account for 80% of the chain’s sales, and that a possibility is that the weaker half gets re-branded into a new chain (never mind the fact that HBC already has a chain, Fields, for this kind of store and that Zucker was looking to expand that name already.)
Lord & Taylor wouldn’t kill The Bay. After all, Federated did one right thing when they sold Lord & Taylor to another firm. Now, they should’ve sold off Marshall Field’s, Foley’s, Robinsons-May, Burdines, Rich’s, Lazarus, Kaufmann’s, The Jones Store, Filene’s, etc. to other companies
Those seperate nameplates could have also spun off into their own companies, much like what Kohl’s and Prange Way did up here in WI. In both cases, the chains were sold off to top management, who went and formed new corporate entities. In those named examples, BATUS spun off Kohl’s to management, who went and formed Kohl’s Corp., setting up new headquarters in Menominee Falls WI, while H.C. Prange Co. a few years prior to that chain’s sale to Younkers, spun off its Prange Way division to management, who set up headquarters in DePere WI.
If only had Federated and May Co. pulled off those sort of moves, we’d still have all those regional names that….in the least, made the various shopping centers unique, even if their inline stores were all cookie-cutter.
Alas, what’s been done is done.
I don’t believe that the Hudson’s Bay name will cease to exist. That’s because it was bought by NRDC Equities, and not by kill-happy Federated/Macy’s, Inc.
It would be crazy to take a well-known name (The Bay) and replace it with an unknown name (Lord & Taylor) in Canada. Lord & Taylor is unknown even in parts of the US. Even Hudson’s Bay Company has credibility to US visitors of Canada, including its signature point blankets.
Unlike Macy’s, who’s name was already well-known when it gobbled up Marshall Field’s and the like.
Scott
Personally as a canadian the hudson’s bay company is almost as old as the country itself is. First off I’m sicken that it was even bought by an american institution, but L&T better keep zellers and the bay around as name plates. Even I will join in protests to prevent them from changing. I’m sickened that my country’s whole retail identity as british as it might have been is almost taken completely over by the U.S. I do kind of believe that Lord and Taylor will keep their promise to not change the name plates of Zellers and The Bay. I also hope that they keep the product lines that the bay and Zellers were selling as in canada Zellers is the only place where you can get neopets stuff(if you’re in to the virtual pet site which I am). But it’s just sad that as a canadian all the stuff/stores I knew as a kid are just gone. the kmart we had in town is now a storage unit rental place and a bingo hall. Woolworth downtown is now a Dollar Store(Not that I mind but you know). The Woolworth in one of our three malls and the zellers in that same mall has been razed for a “Lifestyle centre”. Woolco was bought out by WalMart in 94 and swallowed up. AT least it was bought by a chain that respects History and not like some people said Federated. I Think after hearing and seeing what Federated did to places like Marshalls Fields and the like I almost hate them as much as you guys in the states. Fine Macy’s New York. I can see that. Macy’s is a huge iconic historic landmark. But I disagree with Federated just razing everything and treating icons like garbage because they don’t carry a certain name plate. Sickening, I am grateful that L&T is respecting what Canadians want, unlike something Federated would do and has done. While they may not be perfect no one is I am glad that they’re being respectful with an iconic brand
As an HBC employee, I’ve seen several internal emails sent to employees and management from head office and NRDC. The company has told us that its intention is to revamp The Bay, Zellers, Home Outfitters, and Fields, while introducing Lord & Taylor stores to Canada, mostly by using extra space in the huge downtown Bay stores. $500 million will be spent directly on HBC stores, through renovations, expansions, etc. The Bay will move slightly more upmarket, and carry much more fashionable products. Zellers will carry more brand name apparel, and roll out a new 125,000 square foot prototype store that is being developed. Contrary to what an earlier poster mentioned, the large Zellers stores that are in fashion malls and power centres are among the best performing stores, and the company has excellent lease terms on many of them. With hundreds of millions of dollars being spent on HBC with a large customer base, I doubt they would close or sell everything just to get a handful of good Lord & Taylor locations. It’s also interesting that the new umbrella company for everything (including the US Lord & Taylor stores) is called Hudson’s Bay Trading Company. I could somehow imagine that when the smoke clears and HBC is revamped, a few Bay stores opening up south of the border.
i wood be for zellers or bay stores hear but we dont need winners thay are tj maxx and we do not need more of them i wish thay wood go under thay are a horble commpany that miss treets employees at all levels.
I always thought the entire idea was to spin off Zellers stores and rename them TARGET.
FYI Woolco was an American-based and originated chain; it went bust in the US in the early ’80s but lasted longer in Canada. It was owned by Woolworth.
It had been rumored for the last 2-3 years that HBC was considering selling Zeller’s to Target. I don’t know that NRDC/Lord & Taylor will keep Zeller’s, but if they sell Zeller’s, they would not be the ones changing their name. Zeller’s is basically the “Canadian Target” as it is, but I understand, Target is an American company . GM, Ford, Chrysler, and Safeway are American companies with a large Canadian presence that have operations that have tailored to Canada, i.e daylight running lights on the Big 3, factories, etc. to Canadian products in Safeway, so Target would likely exhibit good stewardship of Zeller’s with the exception of the name. Keep in mind that Zeller’s was once partially owned by the defunct US discounter WT Grant and absorbed KMart Canada, so it follows the mold cast by US discounters.
I doubt Lord and Taylor will eliminate The Bay, as it sits in the mid-range tier, while L&T occupies the lower rung of the highend department store set. The Bay banner has already supplanted Morgan’s and Woodward’s and some Eaton’s and Simpson’s as well. Many of the private labels and exclusives are Macy’s FMG brands such as Tools of the Trade and Alfani.
Given the sell of L&T to NRDC by Federated/Macy’s after the May merger, I wouldn’t be surprised that L&T has non-compete clauses and brand agreements in place with Macy’s, leaving this as the only way for L&T to expand both is company and presence. I could see some L&T stores in Toronto, Montreal, Vancouver and perhaps Calgary or Edmonton, but definately L&T would not succeed by supplanting The Bay as a banner. It would be interesting to see if Macy’s has an interest in NRDC as a result its sell of L&T.
The company that has assumed management of Lord and Taylor is attempting to rebuild the chain’s image as a premier store. While it enjoyed an unusual autonomy under the ownership of May Department Stores, it’s style and exclusivity had somewhat suffered.
What I think we will see is a more upscale Hudson’s Bay Company. They have the original Simpson’s flagship store in Downtown Toronto, which is already more upscale than any other HBC store. Without an Eaton’s to compete with, The Bay competes primarily with Sears Canada (another off-shoot of the original Simpson’s). Sears in Canada is much more upscale than the US stores, but The Bay has the history, especially in Western Canada, behind it. This is a chance to not only revitalize a revered Canadian trade name, but to also help both L&T and HBC expand. L&T is needed in Canada as an upscale competitor to Holt Renfrew. And HBC could be a formidable and serious competitor to Macy’s in US cities close to the Canadian border, where The Bay name is already somewhat familiar with people due to cross-border TV advertising. I could easily see Bay stores in places like Burlington,VT; Buffalo; Detroit; etc… With the failure and consolidation of so many department stores, there are prime mall locations available for HBC to decorate and move right into.
It’s the Hudson Bay Company which is 338 years, not The Bay department store. The Bay department store has been around only since the 1960s. So, technically, it wouldn’t be “the end of an era” if The Bay nameplate disappeared at the expense of Lord & Taylor brand, as it would be the case if it was the whole 338 years old Hudson Bay Company that disappered.
But I do admit, I find it odd that Lord & Taylor actually wants to install itself in Canada when they don’t even have stores in all US states. In fact Lord & Taylor operates in only 9 US states. The only reason I know about Lord & Taylor is because I’ve been to NY and NJ in the past, otherwise I would have never known about this chain. I would have find it more credible if national chains like Macy’s or JC Penney wanted to establish in Canada. But Lord & Taylor is a just a Northeast US regional chain. What in the right minds of NDRC Equity Partners would make them think that Lord & Taylor has a chance of succeding in Canada when they’re not even present in California, Texas or Florida.
Lord & Taylor was more widespread, May Co. downsized L&T a couple of years before the meger with Federated(aka Macy’s). Lord & Taylor was the crown jewel of the old Associated Dry Goods(ADG) department store chain prior to its 1986 acquisition by May Co. May made L&T more promotional and dependent on sales and clearances than it had been under ADG as well as compared to the other upper market department store competition, and had cut back some on service. Lord & Taylor was present in Florida, Texas, and Atlanta prior to downsizing. After May acquired Marshall Fields from Target, it was evident that May had taken L&T down the wrong path, as from all appearances, May was working to move L&T back upmarket, positioning it once again as May’s premium department store the way Macy’s Inc. has Bloomingdales while considering taking the Marshall Fields banner national in place of its regional banners for the mid-tier department stores, a similar strategy with Federated rebranding its stores to Macy’s. Lord & Taylor’s present status is a result of being spun off by Macy’s because the stores occupied the same niche as Bloomingdale’s and Macy’s mined the L&T real estate for locations for Macy’s and Bloomingdale’s prior to selling the chain off.
The Lord & Taylor name has a regal ring to it, along with a reputation as a quality high service retailer, and is a difficult segment agains Nordstrom, Nieman-Marcus, Bloomingdales, and Saks 5th Avenue, all of which have a more widespread footprint. The high-end segment is underserved in Canada and Lord & Taylor would fit well in Toronto, Vancouver, Montreal, Calgary or Edmonton and possibly even Ottawa, Winnipeg, and Quebec City. The Bay would still exist filling the mid-tier, with Sears as the only competitor for The Bay. Hudson Bay Company rolled out They in the late 60’s, replacing the recently acquired Morgan’s Department Store, and over time has supplanted the Simpson’s that didn’t become Sear’s, Eaton’s and Woodward’s, a consoldidation similar to what has happened more recently in the US.
As a Montrealer directly involved in the Zellers’ chain of department stores, I find that the move by Lord & Taylor to purchase HBC will be the make-it or break-it event for our cherished Canadian icon. Zellers’ has been bleeding customers to Walmart since the latter has come to Canada and taken this market segment by the throat due to Walmart’s buying power, superior inventory control and savvy marketing. As for the Bay stores, they are in some trouble too as the Canadian market is quite price sensitive and does not have much space for upscale stores in light of our relatively small market and lower discretionary income due to our high taxation rates vis-a-vis the U.S.
I just hope that Lord & Taylor will succeed and HBC will be around for many years to come!!
Not sure where else to put this, but another big piece of Canadian (or at least Ontario) retail news broke today…
The A&P, Dominion and Loeb names are disappearing. They’re being rebranded Metro over the next 18 months after they were sold to the Quebec chain a few years back.
http://www.cbc.ca/consumer/story/2008/08/07/metro.html
Also affected are the smaller chains The Barn in Hamilton and Ultra Food and Drug in Burlington and Guelph.
For those that don’t know, A&P bought Dominion in the mid-80s, sold off Dominion’s operations outside of Ontario to various owners, and then limited the Dominion banner to the Greater Toronto area and A&P to the rest of the province. Loeb, an Ottawa-area chain, has been owned by Metro for several years.
I WORKED FOR L+T STORE IN MICHIGAN FOR YEARS AND LEFT THEM MONTHS AGO. I KNOW THAT THEY BOUGHT HUDSON BAY STORES AND I HEARD THAT THEY ARE CHANGING THE THE BAY STORES TO L+T NAME PLATE AND THE L+T STORES IN MICH WILL BE GONE.
Amy, there really aren’t many Canadian retail icons left, and to think that they’ve even been slightly British-influenced in recent decades is delusional. First off, you have Woolworths, which you mentioned as a store you missed–it was American.
Secondly, as old as Hudson’s Bay Company is, their The Bay department stores ARE practically Canadian Macy’s stores. They sell many of the same private label brands as Macy’s does, such as Charter Club, Tools of the Trade, Alfani, etc., and they compete in the same middle-of-the-road price segment.
On this note, I’m also going to echo previous posters’ sentiments that there are very few non-discount department store chains in Canada. You have Sears, The Bay, and Holt Renfrew. What else? I can’t think of any. I think that Nordstrom would do well in the largest and wealthiest Canadian cities, namely Vancouver, Calgary, and Toronto (multiple locations could do well in the GTA, both in the city and in suburbs such as Brampton and Mississauga). Those would be good places to start before venturing into smaller or less affluent markets like Winnipeg, Edmonton, and Ottawa. I think that Quebec and Montreal, in particular, already have enough high-end retail and regional department stores–it’s the other places that are lacking.
Regarding Zellers, it IS basically a Canadian Target. Like the Macys-The Bay relationship, Zellers sells a couple of Target’s pseudo-private-label brands, such as Cherokee and Mossimo. Even where the brands do differ, the strategies are similar.
TheStar.com – Business – Hudson’s Bay to be Canadian again?
American owners surprise conference with talk of public stock offering for iconic retailer by 2011
September 24, 2009
Dana Flavelle
Business Reporter
Ownership of Hudson’s Bay Co., Canada’s oldest retailer, could be returned to Canadians as soon as the first half of 2011 through a public stock offering, the American owner of the company said yesterday.
NRDC Equity Partners, a New York-based private equity firm, would remain involved in Hudson’s Bay after the initial public offering, both as an owner and operator, said president and chief executive Richard Baker.
Baker, whose company has owned the iconic Canadian retailer for just over a year, made the surprise announcement at the International Council of Shopping Centres conference in Toronto.
“Our great hope is to return the Hudson’s Bay Company to the people of Canada through an initial public offering, perhaps as early as the first half of 2011,” said Baker.
“Nothing’s final, but we are beginning discussions about giving the HBC back to the Canadian public, as a public company on the Toronto stock exchange,” Baker told reporters in a later interview. “We would still be involved and very active in the business.”
The offering could include all or part of Hudson’s Bay Co., which operates nearly 500 stores across Canada under the names The Bay, Zellers, Home Outfitters and Fields, Baker said. It could even include a stake in Lord & Taylor, The Bay’s sister department store chain in the U.S., he added.
No decisions have been made about how much of the company would be offered for sale to the public, he said, or at what price.
Many Canadians mourned the passing of the country’s oldest company into American hands when Jerry Zucker acquired Hudson’s Bay and took it private in 2006.
Zucker died suddenly two years later and ownership of the retailer passed to NRDC, which had a minority stake in the firm at the time.
Since acquiring the Hudson’s Bay Co. last August, NRDC has plowed $500 million into the stores and cut $400 million in expenses, Baker said. By boosting the stores’ performance, he said, the company will also increase the value of the real estate beneath them. However, he was quick to say his investment in HBC is more than a “real estate play.”
He said the company has a seven-year plan for the stores. Having spent the first year cutting costs, including eliminating 1,000 jobs, it plans to begin experimenting with a variety of initiatives aimed at boosting sales and profits.
In an unusually frank review of the retailer’s performance under previous owners, Baker said the company was doing too many things just because that’s the way they’d always been done.
Next Thursday, it will unveil the Olympic uniforms it has designed for Canadian athletes participating in the 2010 Vancouver Winter Games. As part of his commitment to Canada and the Games, he said if either the men’s or women’s hockey team brings home a gold medal, he will put the Canadian flag, team photos and uniforms in the windows of the flagship Lord & Taylor store on New York City’s swanky Fifth Avenue.
In mid-October, The Bay on Queen St. will open its newly expanded designer floor, called The Room, which aims to recapture sales lost to specialty retailers and boutiques.
The Bay has dropped 700 brands – more than half – and added 150 new ones, including more contemporary designers that offer affordable luxury.
Zellers has widened its aisles to make room for baskets of impulse purchases that boost average sales by as much as 30 per cent, he said.
But there is a lot more work to be done, he added.
@Chris, I agree on the renovations. L&T needs a new look! Bloomingdales has really picked up and doing well it will take a lot for them to catch up. L&T needs a whole new team to turn things around.