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Hudson’s Bay Co. CEO Richard Baker greets vice-chairman Bonnie Brooks after the annual general meeting in Toronto on Wednesday.


When it comes to savvy department-store competition, the boss of Hudson's Bay Co. is emphatic: Bring it on.

Good neighbours bring better customers, HBC chief executive Richard Baker said, adding he'd prefer to see U.S. arch rival Nordstrom or Quebec-based competitor La Maison Simons move in across the mall, rather than the struggling Sears Canada Inc. Both competitors are set to open stores across Canada in the next year or two.

"It's our kind of customer. It's bringing better retail to the mall. … We want to be where the customer wants to be," Mr. Baker, a U.S. real estate magnate whose firm runs American malls, said on Wednesday after HBC's first annual meeting since returning to the public markets in November.

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There's reason for Mr. Baker's swagger. Hudson's Bay is enjoying signs of revival after he bought the ailing retailer almost five years ago, despite industry experts' warnings that turning it around was impossible.

He's doing it partly by focusing on Hudson's Bay's best store locations, even as Sears sells off leases to some of its prime outlets to help raise money for its own revival efforts. Nordstrom snapped up the Sears leases, and now Simons wants the latest batch.

As Mr. Baker continues to orchestrate the HBC reinvention, he faces a growing array of rivals, but he said he relishes the prospect of Nordstrom opening stores here.

Hudson's Bay already faced off with Simons when it opened its first store outside of Quebec – at West Edmonton Mall – last fall. As a result, Hudson's Bay's sales rose, he said. The added player helped bring more shoppers to the shopping centre overall.

Sales at that mall's Hudson's Bay store picked up 3 to 4 per cent in the first quarter from a year earlier, a spokeswoman said.

"We actually believe that in locations where Nordstrom is coming right next to us, that that's going to have no impact on the business or increase it a little bit because they will be drawing more traffic to the location," said Mr. Baker, sporting a tie and socks with HBC's signature multi-hued stripes.

He said at U.S. malls, where HBC's Lord & Taylor has stores, department-store rivals "want to be next to each other." And competition in that segment is much fiercer south of the border, with Saks Fifth Avenue, Nieman Marcus, Bloomingdale's and Macy's vying for customers.

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Still, HBC has invoked its mall control rights to prevent rivals from entering at some locations, he said, while allowing Simons at others. Simons has struggled to get into some malls outside of Quebec.

"If they want to put Simons right in front of our building and use all of our parking, that's a problem for us," Mr. Baker said.

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About the Author
Retailing Reporter

Marina Strauss covers retailing for The Globe and Mail's Report on Business. She follows a wide range of topics in the sector, from the fallout of foreign retailers invading Canada to how a merchant such as the Swedish Ikea gets its mojo. She has probed the rise and fall (and revival efforts) of Loblaw Cos., Hudson's Bay and others. More


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