HBC minority shareholder calls for special meeting to replace board of directors

TORONTO — A U.S. investment firm is calling for the removal of the current board of directors at Hudson’s Bay Co., and taking particular aim at its executive chair.

Hudson’s Bay Co.’s management has been under pressure for months from Land & Buildings Investment Management, which argues HBC’s stock price is far below the underlying value of its real estate holdings.

Land & Buildings, which estimates in Monday’s statement that HBC’s real estate is worth $35 per share while its share price was worth $11.96 at the end of last week, didn’t say specifically what HBC should do.

This week’s statement from L&B follows one in June that called for HBC to sell its “crown jewels” and another in September that said it might call for the removal of HBC’s board of directors.

Hudson’s Bay didn’t immediately respond to requests for comment about L&B’s Oct. 23 statement.

The most recent salvo from Land & Buildings takes aim at HBC executive chair Richard Baker because he “continues to call the shots.”

L&B chief investment officer Jonathan Litt, who is the fund manager’s founder, said in the statement that the departure of Hudson’s Bay CEO Gerald (Jerry) Storch will not solve HBC’s problem. Storch, who joined the Torontobased retailer in January 2015, will return to Storch Advisors effective Nov. 1, the company said in a statement on Friday.

Baker, whom Storch succeeded in the top role, will resume the CEO’s duties on an interim basis, while the company searches for a permanent replacement.

Litt repeated his assertion that Hudson’s Bay Co. is, in reality, a real estate company, not a retailer, and has failed to outline a plan to unlock the “substantial real estate value trapped in the company.”

“As such, we have no confidence that the board on its own will take the affirmative action necessary to address the substantial undervaluation of the company,” the statement said.