Speculation that Hudson Bay Co. may be on the block in the wake of the death Saturday of owner Jerry Zucker begs a question: Who would want the 338-year-old retailer?
There is only one logical buyer: Sears Holdings Corp., and the chances of the rival chain ever bidding are extremely slim.
Sears is controlled by respected investor Edward Lampert. He's got the courage and the cash to take a shot at HBC,
and the opportunity to buy the Canadian chain in a perceived distressed
situation may be attractive. If anyone can squeeze synergies from
combining retail operations, it's Mr. Lampert. But he's not going to be
feeling generous, as Sears is dealing with a potential consumer-led
U.S. recession.
Let's eliminate other potential buyers: Wal-Mart
could never get an HBC acquisition past competition authorities. No
other clothing-focused retailer seems to have a screaming need to own
department store-sized space in Canada.
REITs have shown they aren't
interested in HBC's underlying real estate. And private equity had
every opportunity to buy this beast back in 2006, when times were good
and Mr. Zucker put the chain in play. The funds passed then; they'd
almost certainly pass now.
So if Anita Zucker, the new governor of
HBC in the wake of her husband's passing at age 58, does decide to walk
away, then her first call should be to the canny Mr. Lampert. But don't
expect the hedge fund whiz to offer anything in the neighbourhood of
the $1.1-billion Mr. Zucker paid in 2006.
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mighty conan from Calgary, Canada writes: Don't hold your breath on this one... Holdings is running low on cash & heading into the economic wind. Keep in mind too that Sears & HBC are the 2 anchor tenants in almost every mall in Canada. Aside from tying up the market & keeping someone else out why would you want to have 2 locations at the same time on the same property? The only way it would work is through consolidation & lease/sell off the rest to someone else. Doesn't make much sense IMO. More likely scenario: HBC limps along waiting to be rescued & comes back to life under new ownership.
- Posted 15/04/08 at 10:49 AM EDT | Alert an Editor | Link to Comment
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