Opinions
Christine Hughes
Hudson Bay Co.
HBC-T
COMMENT
Sep 17, 2014
$17.510
Stock price when the opinion was issued
department stores
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DON'T BUY
DON'T BUY
Real estate worth it? Not a company that he ever liked. Thinks the operating business is very difficult. They have to come to the understanding that they need to have much smaller stores. Sure, some of their locations are great, but there is a lot of other Hudson's Bay that aren't so great. Wouldn't touch it.
department stores
COMMENT
Closing stores should be part of their strategy. There needs to be more definitive action by the management team. Management understands how expensive it is becoming to run a traditional retail operation. Digital and e-commerce products are making it very competitive to run a business. The real estate they possess is very valuable and it may be put to better use than retail. The deal being offered to HBC-T is very low at just $9.45 per share -- the real estate is worth $30 per share alone not including the value of their inventory. He thinks the minority shareholders will feel the offer is far to low as well.
department stores
PAST TOP PICK
(A Top Pick Jun 28/18, Down 12%) This is a real estate play. What drags this down is the brutal retail space. They need to close some stores and it's likely in progress now. This will rise eventually rise above $10. They need to make better use of their prime real estate and to do it sooner than latter--they are generating negative cash flow.
department stores
Continues to be a very interesting situation. With the backing of a pension fund, they bought Saks. So far that story has been about financial engineering and unlocking value that was there and about the REIT spin out that is probably coming at the end of this year or early next year. If you hold it through the REIT spin out, what do you do? If you continue to hold, you have to be willing to give them the benefit of the doubt that this is going to be a good retail, it was a very bold, ambitious plan to unroll Saks out into the Canadian marketplace. She expects this will be successful.