Hudson’s Bay Company files for IPO

Canada’s oldest company, Hudson’s Bay Co. will soon be in public hands again after the storied retailer said Wednesday it is going to make a return to the stock market following an upscale makeover. The owner of the Bay, Home Outfitters and U.S. retailer Lord and Taylor filed a preliminary prospectus for an initial public […]

Canada’s oldest company, Hudson’s Bay Co. will soon be in public hands again after the storied retailer said Wednesday it is going to make a return to the stock market following an upscale makeover.

The owner of the Bay, Home Outfitters and U.S. retailer Lord and Taylor filed a preliminary prospectus for an initial public offering of its shares Wednesday after years of hinting that it is in the works.

HBC last traded on the Toronto Stock Exchange in 2006 before it was taken private by U.S. businessman Jerry Zucker, who later died unexpectedly. New York-based NRDC Equity Partners acquired the company in 2008 for $1.1 billion from Zucker’s widow.

Since then, the company has been working to transform stores that were “tired and in need of renovation” as well as revamp its image after losing “its fashion credibility,” the company said in its filings.

“Our investments in Hudson’s Bay since July 2008 have enabled us to add new, sought after brands and Hudson’s Bay is becoming a fashion authority in Canada,” it said.

The company, which plans to use the proceeds of the offering to repay debt, said it has improved sales productivity and earnings growth, partially through a capital investment of more than $420 million since 2009, but added it has more work to do.

The price and number of shares to be sold were not disclosed. However, HBC did say it plans to pay a quarterly dividend with a target payout ratio of 20 to 25 per cent of expected net earnings.

Jennifer Radman, a portfolio manager at Caldwell Investment Management, said a rare Canadian retail asset like HBC could fetch “huge demand” from investors, though stock markets are still volatile.

“A lot of investors, they buy stocks based on what they know, so I think from that standpoint there will be a lot of demand, regardless of the valuations that are placed on the stock,” she said.

In terms of an initial valuation, Radman looked at where some of its U.S. peers are trading, like Macy’s, which trades at 13.5 times earnings and TJX Group – owner of T.J. Maxx, Winners and Marshall’s stores – which trades at 18 times earnings.

She estimated HBC could get away with pricing itself at between 12.5 and 17 times earnings.

Brands Articles

La Roche-Posay sheds light on the perils of sensitive skin

L'Oréal Canada brand enlists model Jessica Langlois to share her story

Sport Chek pens a runner’s manifesto

Retailer continues its "All Sweat Is Equal" campaign with a new agency

Why more retailers are saying ‘I do’ to the bridal business

Le Château and Hudson's Bay are among the brands trying to court today's bride

TD Bank acquires Nordstrom credit card portfolio

Toronto bank acquires U.S. retailer's existing U.S. Visa and private label credit cards

The big middle is shrinking

Staying out of the shrinking mid-tier retail sector requires a total rethink: Atkinson

Taco Bell, Pizza Hut join chains nixing ‘artificial ingredients’

Facing pressure from smaller rivals, food giants are turning to wholesome ingredients

Kraft Singles plays mind games in online effort

Cheese brand introduces "A craving is a powerful thing" tagline

McDonald’s tricks consumers with ‘salad society’ pop-up

Fast food chain creates a fake restaurant brand to get consumers to try its salads

Infiniti tops on web for ‘virtual tire kicking’

High-end brand edges out Jeep and Lincoln in annual J.D. Power study