Hudson’s Bay Restructures HBS Global by Selling Another Stake

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Hudson’s Bay Co. (TSX: HBC) has sold an additional stake in HBS Global Properties to Madison International Realty for $50 million. HBS Global is a joint venture between Hudson’s Bay and mall operator Simon Property Group. Following the transaction, Hudson’s Bay will still own a 61 percent stake in HBS Global.

Madison International, a New York-based real estate firm, was part of a group that purchased a stake in HBS Global in November for $533 million. Other investors in that transaction include Montreal-based real estate company Ivanhoe Cambridge, which put in $250 million and an undisclosed U.S. pension fund which picked up a portion valued at $133 million. Hudson’s Bay says the two deals combined values HBS Global’s entire real estate portfolio at $4.5 billion.

The rise of Internet shopping has forced retailers collectively to take a look at their real estate holdings. Several, including Abercrombie & Fitch Co. (NYSE: ANF), American Apparel Inc. and Sears Holdings Corp. (Nasdaq; SHLD), have opted to close stores or restructure their real estate portfolios. For more on the factors prompting retail real estate restructuring, read American Apparel's Bankruptcy Underscores Challenges for Retailers. Earlier in 2016, Hudson’s Bay agreed to purchase Gilt Groupe Holdings Inc. for $250 million, so it can combine the target with Saks Off 5th, giving customers more online shopping options. Hudson’s Bay, based in Toronto, owns large department store retailers Lord & Taylor and Saks Fifth Avenue, which have headquarters in New York. The company paid $2.4 billion for Saks in 2013.

Willkie Farr & Gallagher LLP is representing Hudson’s Bay. 

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