Hudson Bay Company’s New “Target” Plan
The Hudson Bay Company’s prospective plan to go public with its shares through an IPO has halted due to the murky economic outlook and lack of consumer confidence. Richard Barker, who is the Governor and Chairman of HBC has already set an alternative in motion by leasing over 200 Zellers stores, HBC’s subsidiary, to Target. If you can’t see the irony there, it’s because Target has impending plans on revamping Zellers stores in Canada under the Target brand by 2013. In order to raise capital, HBC has delayed its IPO arrangements and increased its competition through the lease.
HBC’s $1.8 billion deal is purposed to reducing its debt as well as investing the rest into its other subsidiaries, the Bay and Lord & Taylor. Baker’s cost cutting plans will include focusing more attention on quality fashion for women as well as teaming up its chain stores with other retailers to cater its targeted consumers.
Despite HBC’s timely move by increasing its focus on women fashion and leasing Zellers to Target, it still needs to consider the consequences by doing so. The rather risky move in the deal with Target Corporation may have only increased the imminent downfall of HBC