Lord & Taylor Owner Acquires Hudson’s Bay

NRDC Equity Partners LLC (Purchase, N.Y.), owner of New York-area retailers Lord & Taylor and Fortunoff, has reached an agreement to acquire Hudson’s Bay Co. (Toronto), North America’s oldest retailer.

NRDC immediately announced that it would partly convert about 10 to 15 of Hudson’s Bay’s 94 full-line department stores into Lord & Taylor outlets.

NRDC and True North Retail Investments, an affiliate of The InterTech Group Inc. (North Charleston, N.C.), will create a holding company called Hudson’s Bay Trading Co., which will include the three retail operations and Creative Design Studios, begun by NRDC in 2007 to develop fashion brands for Lord & Taylor and, eventually, wider distribution. Terms of the deal were not disclosed, but NRDC will invest $500 million in the new company. Richard Baker, NRDC’s ceo, will serve as ceo of Hudson’s Bay Trading Co. and “governor” of the 580-store Hudson’s Bay chain. He is the 38th governor (the company’s term for ceo) since the trading company was founded by European explorers to the new world in 1670.

Ownership of the chain came into play three months ago following the death of Jerry Zucker, the investor who acquired Hudson’s Bay two and a half years ago for more than $800 million and took it private. NRDC had held a minority stake in the business.

Hudson’s Bay Co. also operates mass merchandiser Zellers, specialty retailer Home Outfitters and discounter Fields in Canada. The new North American retail operation is expected to have combined sales of $8 billion and 55 million square feet of stores.

“By acquiring Hudson's Bay Company along with previous acquisitions, Lord & Taylor and Fortunoff, we will have an unprecedented opportunity to recreate the retail landscape in North America,” Baker said. “Enormous potential exists by upgrading the offerings at both The Bay and Zellers and by bringing Lord & Taylor, Fortunoff & CDS into the mix.”

The new owners said the strategy of the combined company “is to create a greater focus on The Bay department store business in Canada with an emphasis on the customer by offering better brands and better service. In addition . . . Lord & Taylor will be in a position to launch 10-15 stores throughout Canada. Currently there is a gap in the Canadian retail landscape between The Bay department stores and Holt Renfrew. Lord & Taylor stores will be ideally positioned to fill this consumer demand and will be located in prime locations through existing HBC real estate properties or within existing flagship Bay stores.”

Also, the company said, Zellers will see greater focus on branded apparel and a future roll out of new 125,000-square-foot prototype stores. And Fortunoff will be in a position to introduce Fortunoff jewelry stores and home departments both within The Bay department stores and as freestanding retail operations.