Fortunoff, L&T Owner Acquires Hudson's Bay Co.

Toronto — Hudson's Bay Company, the Canadian retailer established in 1670, has a new ownership group led by NRDC Equity Partners, which acquired Lord & Taylor in 2006 and bought Fortunoff out of bankruptcy in March.

In the transaction, for which no purchase price was disclosed, NRDC along with True North Retail Investments, an affiliate of The InterTech Group, Inc., acquired Hbc and consolidated its ownership of L&T, Fortunoff, and Creative Design Studios (CDS) under a holding company called the Hudson's Bay Trading Company (HBTC).

Combined, the companies generate more than $8 billion (U.S.) in retail sales and operate 55 million square feet of stores in the United States and Canada.

NRDC said it will invest $500 million in new equity into the combined company. NRDC president and ceo Richard Baker will serve as ceo of HBTC and will become the 38th governor of the Hudson's Bay Company.

Baker said, "We will have an unprecedented opportunity to recreate the retail landscape in North America. Enormous potential exists by upgrading the offerings at both The Bay and Zellers and by bringing Lord & Taylor, Fortunoff & CDS into the mix."

To steer the Hbc banners in Canada, former Polo Ralph Lauren president and coo Jeffrey Sherman was recruited to be its new ceo. At Polo Retail Group, he directed the owned retail stores and outlets in the United States, Europe and Asia, as well as the Rugby and Club Monaco operations and ralphlauren.com. Sherman spent 30 years at Federated, rising to ceo and chairman of Federated Direct, then left to become ceo of The Limited retail chain.

Lord & Taylor will be in a position to launch 10 to 15 stores throughout Canada, the company said. "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."

Fortunoff will introduce Fortunoff Jewelry Stores and Fortunoff Home Departments both within The Bay department stores as well as freestanding retail operations.

Zellers will see greater focus on branded apparel, improved customer service and a future roll out of new 125,000-square-foot prototype stores.

Creative Design Studios, the design and manufacturing division of NRDC, will expand its offerings; CDS brands include former Bill Blass designer Peter Som's eponymous collection.

Remain Canada-only operations will be Fields and Home Outfitters, the fast-growing home furnishings specialty store.