Activist investor urges HBC to sell property

TORONTO — Hudson’s Bay Co. is facing heightened calls from a U.S. investor to sell off or otherwise unlock the value from its real estate holdings.

In a letter to the retailer’s board, Connecticut-based Land & Buildings Investment Management said it’s concerned the company has not heeded its call in June to maximize shareholder returns by tapping into its property portfolio.

The investment firm says HBC’s property holdings are worth $35 a share — with the company’s Saks Fifth Avenue flagship store in New York alone worth $16 per share — compared with HBC’s closing price of $10.60 Friday.

Land & Buildings, which owns close to five per cent of HBC stock, said it was unsatisfied after a recent meeting with management and threatened to call a special meeting of shareholders to remove board members if action isn’t taken on the property front.

The investment firm has suggested HBC redevelop its properties in Canada, Europe and the United States, or go private, and urged the company not to invest more in additional retail brands like Neiman Marcus or Macy’s.

It also suggested HBC should sell Saks Fifth Avenue.

“The Saks Fifth Avenue banner would likely be in high demand from potential buyers, allowing the company to focus on the Canadian market it has long dominated,” Jonathan Litt, chief investment officer of Land & Buildings, said in the letter.

HBC said in a statement that it welcomes feedback from all shareholders and is committed to improving its retail operations and creatively unlocking the value of its real estate holdings.