Less than a week after announcing its plans to sell most of its iconic Lord & Taylor flagship store in New York to be turned into office space, the Hudson’s Bay Co. is looking to sell the Canadian department store’s Vancouver space.
HBC, which owns Lord & Taylor, Saks Fifth Avenue and other luxury retailers along with its own chain of iconic Canadian department stores, announced that it has decided to sell the property currently housing Vancouver’s HBC department store.
Enlisting two real estate groups to find a potential buyer for the group’s current downtown location, HBC hopes to sell the property and close in on a $200 million mortgage that it currently holds on the space. At 650,000 square-feet, the large cream terra cotta building occupies one of the city’s most coveted swaths of real estate and has been a city fixture for decades.
“We are exploring a sale of this flagship property as the Vancouver real estate market has appreciated significantly over the past several years,”said Richard Baker, HBC’s Governor, Executive Chairman and interim Chief Executive Officer in a statement. “While no decision to sell has been made, we continue to explore opportunistic transactions to enhance shareholder value.”
The potential Vancouver deal, which some reports estimate could be worth as much as $900 million, comes shortly the HBC announced plans to significantly downsize New York’s Lord & Taylor location by selling all but 150,000 of the building’s current 650,000 square feet to office company WeWorks. The move would bring down the company’s debt by more than $1.1 billion.
As part of a general push to cut down the costs associated with department stores, HBC has been considering selling some of the space in HBC store’s in Vancouver, Toronto and Montreal to WeWorks as well.
Amid a difficult retail climate and steeper competition from department such as Nordstrom and Holt Renfrew, HBC has been coming in at a loss for the past several years. The company is currently considering various buyer options in an attempt to cut down on the department store’s costs.
But despite plans to sell, the HBC has no plans to move the flagship from the space. Instead, it hopes to finalize a lease-back arrangement that will allow it to keep operating from the space.
“We are committed to operating our Hudson’s Bay store at this location and any possible sale would include the continued operation of Hudson’s Bay at this property,” said Baker.