HBC concludes sale of remaining real estate and joint ventures in Europe
today Oct 2, 2019
Canadian department store retailer Hudson’s Bay Company (HBC) announced on Tuesday that it has completed the sale of its remaining European real estate and joint ventures to its partner Signa Retail, as the company seeks to focus its attention on its North American operations.
HBC received approximately C$1.5 billion (US$1.1 billion) for the sale, meaning that the company was able to permanently repay its outstanding term loan of C$429 million, thereby strengthening its balance sheet.
First announced in June of this year, the deal sees Signa take over all of HBC’s German operations, while HBC has assumed ownership of its underperforming Netherlands retail business, releasing Signa from its 50.01% back-to-back guarantee of certain obligations to Hudson’s Bay Netherlands.
As previously reported, HBC is planning to close its 15 Hudson’s Bay stores in the Netherlands, as well as its e-commerce site and regional HQ in the country before the end of the year.
“This agreement is an exciting milestone for HBC as it will deliver important financial and strategic benefits,” explained HBC CEO Helena Foulkes when the deal was announced this summer.
“Financially, it provides us with the best opportunity to capitalize on our German real estate and allows us to further strengthen our balance sheet. Strategically, we will be able to fully focus our resources on HBC’s North American operations, including our best growth opportunities - Saks Fifth Avenue and Hudson’s Bay. This transaction is another bold action that unlocks the value of our real estate and demonstrates our resolve to creating a stronger, more capable HBC,” she added.
As it seeks to turn its fortunes around, the company is also in the midst of optimizing its retail fleet in North America with a series of store closures, and recently announced the sale of its Lord + Taylor business to fashion rental service Le Tote.
In the second quarter ended August 3, 2019, HBC reported C$1.9 billion in revenues, while its net loss from continuing operations totaled C$462 million, widening from a loss of C$104 million in the prior-year period.
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