NRDC Looking at Hudson’s Bay

NRDC Equity Partners (Purchase, N.Y.) is reportedly pursuing the acquisition of Hudson's Bay Co. (Toronto), North America’s oldest retail organization.

The private equity firm, which also owns Lord & Taylor and Fortunoff, already has about a 20 percent stake in Hudson’s Bay. As reported by Women’s Wear Daily, gaining control of the privately held, $7 billion department store chain would enable Lord & Taylor to expand outside the U.S. for the first time. It would also link North America's two oldest department stores: The Bay was founded in 1670 as a fur trading company, and Lord & Taylor began in 1826, in lower Manhattan.

Hudson's Bay operates about 580 stores across Canada, under The Bay, Zellers, Home Outfitters and Fields.

In the fall of 2007, NRDC formed NRDC Acquisition Corp. to raise $360 million for the possible purchase of one or more operating companies. “We basically are very committed to growth within the existing stores we have,” said NRDC ceo Richard Baker recently, “but there is an opportunity in Asia and other markets in North America for Lord & Taylor to have stores.” Baker said he had just returned from trips to Canada and Mexico, where “several groups” showed interest in bringing Lord & Taylor to locations outside the U.S.

WWD speculated that The Bay, with large downtown stores in the 300,000-square-foot to 400,000-square-foot range and smaller ones in suburban areas, would likely be converted to the Lord & Taylor nameplate in more populated and higher-income areas, including downtown Montreal, Toronto and Vancouver.

Hudson’s Bay has been privately held since 2006, when U.S. entrepreneur Jerry Zucker bought it for close to $1 billion. Zucker, who was 58, died in April, fueling speculation about the future of the 338-year-old company. NRDC is a partnership between the principals of Apollo Real Estate Advisors, a major real estate investor that co-developed Manhattan's Time Warner Center with The Related Cos., and the principals of National Realty & Development Corp., an owner and developer of shopping centers in the U.S.