Investor Urges Saks Owner Hudson’s Bay to Refocus

Owner of stores like Lord + Taylor and Saks Fifth Avenue, Hudson’s Bay Company (HBC) just saw its shares increase 15 percent this week – the largest jump since February 2015. This large shares increase may or may not be a coincidence as activist investor Land & Buildings Investment Management took interest in Hudson’s Bay two years ago with a 4.3 percent stake.

In a letter to Hudson’s Bay board this week, Land & Buildings strongly urged HBC to refocus its efforts on its real estate holdings rather than merger activities.

With the Saks Fifth Avenue location in New York City being worth $3.8 billion in real estate alone, Land & Buildings’ co-founder Jonathan Litt is also pushing for HBC to do an evaluation of a take-private transaction led by current management.  Hudson’s Bay is reviewing Land & Buildings’ letter and has said it will respond in due time.

Litt shared his thoughts on HBC’s valuable real estate brands being a priority over its retail brands. “The path to maximizing the value of Hudson’s Bay lies in its real estate, not its retail brands. In our view, the whole time the company’s management has been struggling to navigate this complicated maze of M&A options, the answer lies in its own real estate portfolio.”

Litt is urging HBC to rethink the use of its real estate. HBC has taken note and will probably respond in the coming weeks.