# Hudson's Bay Co. IPO



## rusty_shackleford (May 18, 2012)

What are your thoughts on this? Are these shares likely to go up or is a buy and hold for dividends stock? Stock newbie here :smilet-digitalpoint

http://www.thestar.com/business/article/1281275--hudson-s-bay-hopes-to-raise-400-million-through-ipo


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## ddkay (Nov 20, 2010)

Is there a story anywhere explaining why after 342 years they are going public?


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## HaroldCrump (Jun 10, 2009)

I thought they used to be public, and then went private about 7 or 8 years ago.
Now the private equity owners want to cash out, I guess.


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## gibor365 (Apr 1, 2011)

rusty_shackleford said:


> What are your thoughts on this? Are these shares likely to go up or is a buy and hold for dividends stock? Stock newbie here :smilet-digitalpoint
> 
> http://www.thestar.com/business/article/1281275--hudson-s-bay-hopes-to-raise-400-million-through-ipo


Expected yield is less than 2%...not really a dividend stock


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## HaroldCrump (Jun 10, 2009)

gibor said:


> Expected yield is less than 2%...not really a dividend stock


It will be a dividend stock...when the price drops to $8.
Buy, hold, and prosper :cool2:


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## Mall Guy (Sep 14, 2011)

Yes, HBC was at one time a public company, and Ken Thompson was the major shareholder. He sold his controlling interest, and for many years there was no major shareholder and the company stumbled along. Zucker bought it and took it private, when he past away, NRDC (Baker) bought it for $1.2 B (I think). Sold the Zellers chain to Target for $1.8 B, and is now doing an IPO to monetize HBC and his Lord & Taylor chain in the U.S. Best thing you can do with a retail chain is make it a real estate play, then sell it to someone else (like the public). This will be really interesting to watch, as department stores are and have been losing ground to specialty stores for years. The aging population is not going to help matters. Ask any 15 to 25 female when the last time they shopped at The Bay . . . for fashion not a blender for their mom's birthday! I think I saw in the IPO that their sales per square foot were around $120 . . . that's not really that good . . . but then again, they own some key real estate in place like downtown Toronto, Montreal and major centres in the U.S. and control leases (at low rent) in places like Yorkdale. Like I said, should be interesting . . . doubt its another Dollarama however :encouragement:


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## doctrine (Sep 30, 2011)

I would consider it, if, for example, they were priced at a P/E below 15, and generally had rising revenues and earnings over the last 5-10 years. I doubt either of these will prove to be the case - I believe their revenues are something like less than half what they were 10 years ago.


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## Argonaut (Dec 7, 2010)

"What's next, the Hudson's Bay Company?"

And yea verily, it came to pass.

Admire the history behind this name and it pains me to joke about it, but somehow I have to. Think about it - an initial public offering of the oldest company in the world, how do they market that. Next up we'll have the Dutch East India Company trading in Europe. Is the VOC symbol taken over there?

If we have to think about it logically then lets. No takeout possibilty because if someone wanted to buy it they could have already. So the only avenue for share appreciation is growth. Everyone knows that the Bay is shrinking instead. 

Do not pass Go, do not collect this IPO.


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## thebomb (Feb 3, 2012)

_Ask any 15 to 25 female when the last time they shopped at The Bay . . . for fashion not a blender for their mom's birthday!_

Hey Mall Guy- I had to respond to this. I am in my early 30's, female and love The Bay. Their fashion line has improved extraordinarily over the last few years. I love shopping for clothes there. I can spend a couple of hours in The Bay and not even walk into the rest of the mall. They have amazing mens clothing too and linens and bedding. I am actually very interested in this IPO. Mind you I wont buy right out the gate, but we'll see. Also- remember that women in their 30's and 40's make a significant amount of spending decisions for their families. Just listen to their advertisments- this is 100% the audience they have been targetting. We also have more money than 15-25 years old. 

Anyways- just my 2 cents (completely subjective and not to be taken as investing advice) :biggrin:


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## jcgd (Oct 30, 2011)

If I owned the Bay, and Target was coming to Canada and all these online retailers were popping up I would certainly consider cashing out before business goes from less than great to just plain bad.

But... who knows. Maybe someone gets involved and does something interesting after the Bay goes public. They are sitting on lots of real estate and/ or they could carve out a new niche. I wouldn't touch it though.


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## ddkay (Nov 20, 2010)

In terms of clothing, Hudson's Bay and Target are in different categories. Target will be going head to head with Costco, Walmart and Winners. The Bay will be competing with high end retailers like Holt Renfrew / La Maison Simons / Nordstrom. They have always had crazy markups, but that said they do occasionally carry nice stuff. Hopefully lower prices and the lame practice of selling credit cards disappears with more competition in place. I wouldn't buy the stock though. Maybe one share to own a piece of history but that's it.


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## jcgd (Oct 30, 2011)

Those high end retailers are a bit above HBC's price level aren't they? Honestly, I don't know much about them. Can't afford it so I never looked into it. I disagree about Target's target market (see what I did there?) being the same as Costco and Walmart. Winners I suppose would be a similar market. Target is apparently supposed to be the somewhat nice stuff at a somewhat low price point. Walmart is very low quality for nearly nothing. Costco is a lot of stuff for a fair price because you bought a lifetime supply in a single trip, aha. I'm generalizing of course, but you get my drift.

Has anyone been to a target? I'm curious what it's like first hand. I only go to the the Bay now in lieu of the corn maze. You can wear yourself out trying to find the correct exit from the Bay. Usually easier to take the first exit you find and walk back around the mall!


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## Mall Guy (Sep 14, 2011)

thebomb said:


> Hey Mall Guy- I had to respond to this. I am in my early 30's, female and love The Bay. Their fashion line has improved extraordinarily over the last few years. I love shopping for clothes there. I can spend a couple of hours in The Bay and not even walk into the rest of the mall. They have amazing mens clothing too and linens and bedding. I am actually very interested in this IPO. Mind you I wont buy right out the gate, but we'll see. Also- remember that women in their 30's and 40's make a significant amount of spending decisions for their families. Just listen to their advertisments- this is 100% the audience they have been targetting. We also have more money than 15-25 years old.


Sure they have improve their offering . . . they recruited Bonnie Brooks and others . . . and had nowhere to go but up! (well perhaps out . . . Halifax and Moncton for example). And I agree, women in their 30's and 40's control a significant amount of the spending decisions . . . but the priorities shift from fashion, and without fashion (specifically women's fashion) then your just Sears selling appliances! So yes, more money to spend but more things vying for your attention . . . you are more likely to have a big mortgage, car loan, daycare, kid's activities (hockey!), debt, and sorry divorce . . . than the tweens/teens/twenty somethings!


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## Mall Guy (Sep 14, 2011)

jcgd said:


> If I owned the Bay, and Target was coming to Canada and all these online retailers were popping up I would certainly consider cashing out before business goes from less than great to just plain bad.


They did . . . they sold the majority of their Zellers locations to Target, for more then they paid for all of HBC !


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## jcgd (Oct 30, 2011)

Interesting, I didn't know that.


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## Eder (Feb 16, 2011)

jcgd said:


> Has anyone been to a target? I'm curious what it's like first hand.


I've been to many Targets all over the US. Their stores are roomier , cleaner & brighter than Walmart but generally sell the same items at a higher price.


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## underemployedactor (Oct 22, 2011)

The Bay owns Lord and Taylor so they are clearly aiming at an upscale clientel. How well this will pan out with Nordstrom set to open store in TO, Vancouver and Calgary raises enough questions that I won't be participating in their IPO.


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## Eclectic12 (Oct 20, 2010)

ddkay said:


> Is there a story anywhere explaining why after 342 years they are going public?


As I recall - I bought HB shares at $8 and the buyout to take them private paid me $15 or so. 

So the more important question is why do the current private owners think it's a good time to go public again?


Note that there's several companies that have gone public and then returned to private (Sobey's & TD Waterhouse come to mind).


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## gibor365 (Apr 1, 2011)

Eder said:


> I've been to many Targets all over the US. Their stores are roomier , cleaner & brighter than Walmart but generally sell the same items at a higher price.


Probably it depends on location, recently we went to some wedding in NY state and just visited Target to see what it is.... for me no difference from Walmart at all....


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## ddkay (Nov 20, 2010)

I'm not sure how HBC will handle a transition to the high-end market, mostly because I don't understand the high-end market. How can Holt's or Saks get away with $2000 sweaters on the racks and a sales floor is bursting at the seams? I know these are places for people with a lot of disposable income but clothes don't hold long term value and the prices are still ridiculous. HBC opened a few new boutiques in Toronto but they don't have anywhere near the same insane margins as the high-end retailers we know today.


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## Mall Guy (Sep 14, 2011)

Eclectic12 said:


> So the more important question is why do the current private owners think it's a good time to go public again?
> 
> Note that there's several companies that have gone public and then returned to private (Sobey's & TD Waterhouse come to mind).


Was always their exit strategy, see earlier post, paid $1.2 B for HBC, sold Zellers for $1.8 B, now just mopping up the rest. Look up NRDC, you will see the track record - some wins and a couple of loses, and lots of real estate.

As for Sobeys, don't forget that they lost the bid for A&P, and Empire remains public. There were many synergies in having only one public vehicle, and it was their 100 yr anniversary! They took out the small public float when they privatized the grocery chain, then monetized their real estate by launching a REIT. 

Where Stellarton anyways ?


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## hboy43 (May 10, 2009)

Eclectic12 said:


> As I recall - I bought HB shares at $8 and the buyout to take them private paid me $15 or so.
> 
> So the more important question is why do the current private owners think it's a good time to go public again?


I think it is one of the key ways that 1%ers fleece the rest of us. I was a shareholder too. Why am I forced to sell out and hand someone else the upside? I absolutely hate the forced buy out provisions of securities law, I don't have the property right of being able to hold for the long term.

Got fleeced on Nova Chemicals too while the CEO made off with 50 million dollars IIRC. This is one of the reasons I like the controlling shareholders of Norbord. Instead of taking the company private back in 09 era at $5 or $7, they instead came up with a refinancing deal where I could participate, or they would buy my share the offering if I declined to participate. Very gentlemanly bunch in my opinion.

Another general comment, aren't IPOs generally a weak investment in the early years?

hboy43


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## Snuff_the_Rooster (Oct 26, 2012)

A good way around all of this is to stop "investing" in dumpster-ready stocks. There's 10K+ stocks to invest in in North America and fully 9,800+ aren't worth the time of day.

There's a whole pile of people that need to learn that in this forum.


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## thebomb (Feb 3, 2012)

Hmmm....http://www.theglobeandmail.com/glob...-behind-their-surging-stocks/article15814904/


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## Canadian (Sep 19, 2013)

Interesting read. I think HBC still has a ways to go with its The Bay stores. Its locations in the larger cities are nice and have great selections but the one in my city has little to be desired. The quality of selection is very poor and as a consequence it's always dead. There was a second location that closed about 2 years ago for those reasons. If the company revitalized the selection its sub-par stores to be consistent with its larger ones, I think it would add a lot of value to the company.


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## Canadian (Sep 19, 2013)

Eclectic12 said:


> Note that there's several companies that have gone public and then returned to private (Sobey's & TD Waterhouse come to mind).


Sobeys itself is not a public company but it's a subsidiary of Empire Co. If one were optimistic about Sobeys' operations it could invest in Empire Co. shares as a partial proxy.



Mall Guy said:


> Where Stellarton anyways ?


Stellarton is a very small town in Nova Scotia. It's where the Sobeys head office is, as well as the home town of the Sobeys family.


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## Mall Guy (Sep 14, 2011)

Canadian said:


> Sobeys itself is not a public company but it's a subsidiary of Empire Co. If one were optimistic about Sobeys' operations it could invest in Empire Co. shares as a partial proxy./QUOTE]
> 
> Up until a couple of years ago, both Sobeys and Empire were public companies . . . so at this point yes, the way to play Sobeys (and now Safeway) is Empire . . . and you get a bit of the REIT, Genstar, Lawtons, but no more movies (Empire Theaters sold to Cineplex)


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## Eclectic12 (Oct 20, 2010)

Canadian said:


> Sobeys itself is not a public company but it's a subsidiary of Empire Co ...


That is the situation today ... I was referring to when I owned shares that traded on the Toronto stock exchange, before it was taken private.

http://www.newswire.ca/en/story/29007/sobeys-shareholders-approve-going-private-transaction

My point was that being private/public can change at any time. To that end, I gave examples of several Canadian companies listed on the stock exchange and then taken private (i.e. HBC, Sobey's & TD Waterhouse).


The new part in this case is that the current owner of HBC is making some or all of HBC public again.


Cheers


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## cn_habs (Oct 27, 2015)

Does anyone have any input/comment on this stock?

With a PEG of 0.5 and a CEO that understands real estate, I think it'd be a decent value play. Moreover, it also has one of the highest Piotroski f scores in terms of financial health.

One thing I've noticed myself is that it's getting more aggressive in increasing their online presence given the daily deals they've been pushing out. Its executive even said its Black Friday sales was going to the biggest in history.


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## mrPPincer (Nov 21, 2011)

I thought it was bought out.. until my recent google search, I didn't even realize it was still HQ'd here in Canada.
I guess the misconception was because they ate Zellers (which I equated with them) and spat it out.


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## yyz (Aug 11, 2013)

http://www.cnbc.com/2015/12/14/saks-owner-nears-deal-for-one-time-darling-gilt-groupe-dj.html


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## cn_habs (Oct 27, 2015)

yyz said:


> http://www.cnbc.com/2015/12/14/saks-owner-nears-deal-for-one-time-darling-gilt-groupe-dj.html


Paying 220M USD for such online shop that has yet to turn a profit is highly risky IMHO. Its estimated annual revenues are at 600M but popularity is declining according to this Techcrunch article: http://techcrunch.com/2015/10/06/gilt-job-cuts/

I'll still keep it on my watchlist as it's still in a downward trend.


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