Hudson’s Bay Co.’s surprise sale-and-leaseback deal on its Toronto flagship store is a real estate story, plain and simple. Which is fine, because that’s the story investors want to hear.
The Canadian retail giant’s stock initially slumped more than 2 per cent on the news Monday morning that the company will sell its grand old downtown Toronto building and connected office tower to mall operator Cadillac Fairview Corp. Ltd. for $650-million, will lease the space back from the new owner, and will operate separate Hudson’s Bay and Saks stores at this plum location. Perhaps investors are struggling to absorb this unexpected twist, as the company had given no hint that this was on the radar screen. Their focus has been jerked away from Hudson’s Bay Co.’s recent acquisition of Saks Inc. and its planned expansion of the luxury retailer into Canada, and is now squarely on how the company will extract value from its large portfolio of retail real estate.Report Typo/Error
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- Updated February 24 3:53 PM EST. Delayed by at least 15 minutes.