OTTAWA - The Hudson's Bay Company, which was founded in 1670, making it Canada's oldest corporation, has filed a preliminary prospectus in preparation for a return to the Toronto Stock Exchange.
Hudson's Bay, which also includes the Lord & Taylor chain in the United States, is making the move as it faces increased competition from American retailers in its home market. At the low end of its market, Target is now renovating outlets of a former discount chain it acquired from Hudson's Bay for about $1.8 billion last year. At the other extreme, Nordstrom recently announced plans to open its first stores in Canada.
The prospectus for an initial public offering offered no information about how much of the company will be made available to investors or the share value. The Globe and Mail, citing unnamed sources, said that the share offering will likely value the company at $2.6 billion.
Although Canada's comparatively robust economy makes it an increasingly att ractive market for American retailers, the prospectus show that Lord & Taylor is outperforming its Canadian parent company. Last year, Lord & Taylor had sales of $210 a square foot, compared with 133 Canadian dollars at Hudson's Bay. (Over the past few weeks, the Canadian dollar has been roughly at par, or worth just slightly more than, its American counterpart.)
Excluding discontinued operations, the company said in the prospectus that it produced net earnings of 57.3 million Canadian dollars on sales of 3.8 billion Canadian dollars last year.
Given the symbolic nature of the Hudson's Bay, which once controlled much of what is now Western Canada, there was some controversy in Canada when it was acquired by Jerry Zucker, a technology and textiles investor from North Charleston, S.C., in 2006. Mr. Zucker took the company private.
Following Mr. Zucker's death, Hudson's Bay remained under American control when it was purchased by Richard A. Baker, a real esta te investor from New York. Mr. Baker soon combined Hudson's Bay with Lord & Taylor which he had previously acquired and began investing on store improvements at both chains. Bonnie Brooks, a longtime Canadian department store retailer, became president of the combined company, which she operates from Hudson's Bay's flagship store in downtown Toronto.
In the prospectus, the company indicates that it will use some of the proceeds from the stock offering to pay down an undisclosed amount of debt.
The Canadian Press news agency reported that Ms. Brooks, who was in Vancouver, British Columbia for a store event, declined to say if proceeds from the stock offering will allow Hudson's Bay to expand its operations.
But she did dismiss concerns that Nordstrom and Target would grab significant portions of Hudson's Bay's business, arguing that there is little overlap between their businesses. That view is not shared by some analysts.
“We had a lot to do to get the company to a new level of standard so we're now in a position to bring a new level of presentation and new products now to a lot more of our stores,†she told the news agency.
