Wednesday, July 16, 2008

HBC Changes Hands From One Private Equity Company To Another

Who said that the global credit crunch has dried up all the opportunities for dubious, ill-thought out Private Equity plays? The purchase of beleaguered Canadian retailer HBC by NRDC Equity Partners doesn't count as being taken private, since HBC was bought by the late Jerry Zucker's PE enterprise in 2006. TV personality Stephen Colbert might call it being taken private-er.

TORONTO - The Hudson's Bay Co. has been bought by the private equity firm which owns American department store chain Lord & Taylor.
The purchase by New York-based NRDC Equity Partners, for an undisclosed amount of money, combines two of the oldest department store retailers in North America. It puts together HBC's Bay, Zellers, Home Outfitters and Fields operations with NRDC's Lord & Taylor group and Fortunoff jewellery and home-decor chain.

Since it's a PE to PE deal, it's going to take some digging to find out what NRDC paid for HBC. A cynic might suspect that it was at a liquidation rather than a premium price given how, you know, nobody actually shops at the HBC family of stores. On the other hand, HBC still has a pretty cherry collection of real estate, as well as lease locations, so the potential is there for a reasonable profit, given that Zucker originally took HBC private at a fire sale price.

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