Transaction valued at CAD $1.1 billion
TORONTO & NEW YORK–(BUSINESS WIRE)–HBC (TSX: HBC) has closed the sale of the Lord & Taylor Fifth Avenue
building to WeWork Property Investors (WPI) for a total transaction
value of CAD $1.1 billion ($850 million), consistent with previously
“This transaction reinforces HBC’s ability to identify undervalued real
estate investments with great potential,” said Richard Baker, HBC’s
Governor and Executive Chairman. “We continue to strengthen our retail
business and unlock the value of our real estate assets.”
With the closing of this transaction, HBC has eliminated the
approximately CAD $520 million ($400 million) Lord & Taylor mortgage and
has reduced borrowings under its asset-based revolving facility.
“We’ve fortified our balance sheet in short order,” Baker continued.
“Since the end of fiscal 2017, we’ve paid down approximately CAD $1
billion in debt, providing us flexibility to support our business goals
and advance our strategy.”
As previously announced, WPI exercised its option to convert CAD $163
million ($125 million) of the transaction value into a preferred equity
interest in the building held by HBC through a joint venture structure.
HBC is a diversified retailer focused on driving the performance of high
quality stores and their omnichannel offerings and unlocking the value
of real estate holdings. Founded in 1670, HBC is the oldest company in
North America. HBC’s portfolio today includes formats ranging from
luxury to premium department stores to off price fashion shopping
destinations, with 350 stores and more than 45,000 employees around the
world. HBC’s leading businesses across North America include Saks Fifth
Avenue, Hudson’s Bay, Lord & Taylor, and Saks OFF 5TH.
HBC also has significant investments in joint ventures. It has partnered
with Simon Property Group Inc. in the HBS Global Properties Joint
Venture, which owns properties in the United States. In Canada, it has
partnered with RioCan Real Estate Investment Trust in the RioCan-HBC
Joint Venture. HBC has partnered with SIGNA Retail Holdings for real
estate and retail joint ventures in Europe.
Figures in this news release assume USD:CAD = 1:1.3.