Following months of uncertainty in the retail sector brought on by COVID-19, Hudson’s Bay Company (HBC) is looking to capitalize on its assets with the launch of a real estate and investment arm.
The 350-year-old retailer announced the new venture on Monday, called HBC Properties and Investments (HBCPI), which will look to convert some of Hudson’s Bay’s real estate into mixed-use developments.
The company currently owns or controls — either entirely or with joint venture partners — about 40 million square feet of gross leasable area across North America.
Among its portfolio of companies are three distinguished retailers: Saks Fifth Avenue, a premier luxury retailer, Hudson’s Bay, Canada’s preeminent multi-category retailer, and Saks OFF 5TH, a leading off-price retailer.
As part of the HBCPI initiative, the company is utilizing the 40-year-old large-scale US-based property development company Streetworks Development, which HBC acquired last year, to create “transformative multi-use environments” that marks the latest milestone in the Hudson’s Bay Company’s shift to a holding company structure with distinct portfolio businesses that operate “at the intersection of retail and real estate.”
“This is an exciting phase of our company’s transformation and provides us with a significant opportunity to unleash the full potential of our real estate and investments business,” Richard Baker, HBC’s Executive Chairman and CEO said in a statement.
“Under this new organization, we will build upon our strong foundation of valuable real estate assets in key demographic areas. We will also continue our strong track record of maximizing our portfolio and generating value from these assets, as we did through the sales of the Lord + Taylor flagship building and our interest in European real estate assets. With the team’s deep expertise and forward-thinking approach to capitalizing on the intersection of retail and real estate, HBCPI is well-equipped to further elevate and increase the value of our portfolio.”
Ian Putnam has been appointed as President and CEO of HBC Properties and Investments — he previously served as President, Real Estate and Chief Corporate Development Officer of HBC. Putnam will lead the real estate portfolio and investments including Streetworks Developments.
Real estate veteran, Kenneth Narva, Chairman and Chief Development Officer at HBC, will direct the Streetworks Development team in the planning and execution of projects that modernize properties to “unlock value-enhancing opportunities across the company’s real estate assets”.
The new real estate division will focus on creating multi-use spaces that feature a range of services and experiences across the workplace, retail, residential and entertainment categories.
Putnam said, “With HBC’s valuable portfolio of real estate and investments, including marquee flagship properties in prime metropolitan markets, coupled with Streetworks Development expertise, HBC Properties and Investments is well-positioned to succeed in today’s landscape.”
“As consumers continue to change the way they live, shop, and work, we are committed to capitalizing on these shifts while maximizing the productivity of our properties, including the physical locations of HBC’s retail operating companies,” added Putnam.
This comes at a time when the retail sector has been facing unprecedented losses due to COVID-19, with Hudson’s Bay as no exception. The coronavirus pandemic contributed to HBC’s decisions earlier this year to close their stores in downtown Edmonton and in downtown Winnipeg.