[9/7/16] Hudson’s Bay Co. posted a net loss of $142 million in the second quarter amid increased costs from its real estate joint ventures.
The Toronto owner of Hudson’s Bay and luxury chain Saks Fifth Avenue has grown dramatically in the last year, acquiring German department store chain Galeria Kaufhof, online retailer Gilt and forming joint ventures with RioCan Real Estate Investment Trust and Simon Property Group in order to tie the company’s retail businesses to top-tier real estate investments.
Last year, HBC governor and real estate investor Richard Baker engineered a partnership with Toronto-based RioCan REIT and Simon Property Group to form joint venture deals worth $4.2 billion. In purchasing Kaufhof, HBC bought its 135 retail locations from Metro AG for $3.36 billion and simultaneously sold 40 pieces of Kaufhof’s real estate holdings to the Simon group for $3.3 billion.
HBC’s net loss in the period ended July 30, which amounted to a loss of 78 cents per share, compared with net earnings of $59 million (a profit of 28 cents per share) in the same period of 2015, which included a pre-tax gain of $133 million related to the creation of the joint ventures. The normalized net loss in the quarter was $122 million, compared…CONTINUE READING