Hudson’s Bay CEO Baker Says Looking at Creating a REITKatia Dmitrieva
Hudson’s Bay Co., the Canadian retailer that went public in November, is looking at creating a real estate investment trust.
The company’s real estate is “advantageous” as HBC can use it for financing and to keep costs down, Chief Executive Officer Richard Baker said in a phone interview from New York today.
“Just like Loblaw, we have the exact same opportunity” to “create a real estate investment trust sometime in the future,” he said. “It’s something we look at all the time.”
HBC, Canada’s oldest company, rose 1.69 percent to close at C$15.00 at 4:30 p.m. in Toronto, where the company is based.
Loblaw Cos., the Ontario-based grocery chain, said in December it is planning to spin off its property into a REIT later this year.
Michael Culhane, HBC chief financial officer, said in the company’s third quarter conference call in November that the company had the opportunity to consider a REIT.
HBC will open 20 Topshop stores over the next four years across Canada, Baker said. The shops, which are separate stores inside HBC locations, generate annual sales of C$600 per square foot, he said.
HBC is opening the largest shoe department in Canada at its Queen Street store Toronto in September or October. It will also open a Kleinfeld Bridal shop in the store, which will be the largest bridal shop in the country.
“We’re really very focused on women’s shoes, Kleinfeld’s and our Topshop rollout -- those are the three big initiatives growing in a big way at Hudson’s Bay this year,” Baker said. Topshop stores are “really important” for HBC because they bring in a younger and more modern customer, Baker said.
HBC earlier reported earnings of 86 cents a share, adjusted for certain items, more than the 85 cent average estimate of eight analysts surveyed by Bloomberg News. Sales of C$1.39 billion, beat the C$1.36 billion estimate in the survey.
The company sees sales growth of 1.5 percent to 3.5 percent in 2013.
“We are seeing greater growth in Canada and we are very bullish on our sales opportunities in Canada,” Baker said. “We are optimistic and feel good about the U.S. but our opportunities are stronger north of the border.”