[Tuscani01]

The problem of having older stores that are smaller while having product lines that fill the new builds.

This isn’t actually an issue. Canadian Tire has 4 prototypical store sizes and dealers can order as much or little as they want with recommendations made based on sales history and store size. If you’re a larger store, you can order the smaller store quantities.

The only thing that is mandatory is carrying product that supports the weekly flyer, but even then, it’s up to each store as to how much of any one item they want to order.

 

[Northern Light]

This isn’t actually an issue. Canadian Tire has 4 prototypical store sizes and dealers can order as much or little as they want with recommendations made based on sales history and store size. If you’re a larger store, you can order the smaller store quantities.

The only thing that is mandatory is carrying product that supports the weekly flyer, but even then, it’s up to each store as to how much of any one item they want to order.

But this is what the post I responded to said:

....My big problem with their corporate plan is they foist more and more products into the same footprint - particularly CT - making them cluttered and difficult to navigate. I spoke to a franchisee one time who said they have virtually no control over this and have to shoe-horn things as best as they can.

.....

I certainly wouldn't disagree w/you, but am curious how you reconcile what was said by the Dealer noted above, vs your statement.

 

[deerparker]

Billionaire B.C. mall owner Weihong Liu signs deal to buy 28 Hudson’s Bay Store leases

The chairwoman of shopping mall owner and operator Central Walk signed a deal Friday to take over leases in B.C., Alberta and Ontario.

www.thestar.com

 

[nightstreak]

Billionaire B.C. mall owner Weihong Liu signs deal to buy 28 Hudson’s Bay Store leases

The chairwoman of shopping mall owner and operator Central Walk signed a deal Friday to take over leases in B.C., Alberta and Ontario.

www.thestar.com

If she’s acquiring 28 leases, that’s welcome news for soon to be former Hudson’s Bay employees. Someone is going to have to work at her stores and there’ll be 9,400 HBC employees looking for work. 1 in 3 are going to have a job back.

But without the Hudson’s Bay IP she’s starting a department store from nothing, no name recognition, no Canadian nostalgia, no Stripes. If it didn’t work for Nordstrom or Target, well established brands with a fully rolled out corporate structure and seasoned executive teams, I don’t give her much of a chance.

Note that none of these sales have been approved by the court — including Canadian Tire’s IP bid.

If Judge Osborne sees the deal, sees that Canadian Tire is paying a pittance that doesn’t even dent HBC’s debt while not taking responsibility for preserving jobs, he may not approve the sale and give it to a lower bidder whose plans preserve jobs and keep The Bay running.

At the very least, I expect the court to ask Canadian Tire Corp. to detail their plans and possibly to revise them to present the best possible outcome for creditors and employees. This ain’t over yet!

 

[Richard White]

If Judge Osborne sees the deal, sees that Canadian Tire is paying a pittance that doesn’t even dent HBC’s debt while not taking responsibility for preserving jobs, he may not approve the sale and give it to a lower bidder whose plans preserve jobs and keep The Bay running.

At the very least, I expect the court to ask Canadian Tire Corp. to detail their plans and possibly to revise them to present the best possible outcome for creditors and employees. This ain’t over yet!

The caveat here is that Crappy Tire is already advertising their acquisition as if it is already approved.

 

[nightstreak]

The caveat here is that Crappy Tire is already advertising their acquisition as if it is already approved.

I called it earlier.

1. They’re positioning this as a fait accompli.
2. They're parading their Canadian heritage and how Canadian Tire ♡ Hudson's Bay is a perfect fit. O' Canada!
3. They’re making a statement when claiming they don’t intend to run Hudson’s Bay's stores.

The first two are intended to solidify public opinion and make it harder to rule against. The third point protects CTC from a potential argument either from the court or from creditors that Canadian Tire is just trying to acquire Hudson's Bay without inheriting its liabilities. If a company could rack up debt up to their eyeballs, strip it of its assets then sell the IP and the company continues without paying their debt, everyone would be doing it.

I see two possibilities:

A) CTC could stick to their argument: we're paying $30M (nothing essentially) for the IP to keep it in Canadian hands, but we don't plan to run any Hudson's Bay stores.

The judge can then say: Ms. Liu is intending to revive 28 stores and run them as Hudson's Bay. You outbid her for the IP but $30M doesn't repay $1 Billion owed to creditors nor does it preserve those jobs. I'm denying your bid and approving hers.

B) Ok ok, we'd like to run Hudson's Bay in a handful of leases we're bidding for but the operations and financials are such a mess that if we don't acquire it, nobody will. We've shown that we can run stores and we'll bring X percent of those jobs back within a year but we're not going to pay $1B for the company and nobody will.

Either Liu is smart as hell and she's calling CTC's bluff or she's delusional that she can create a new department store chain with no brand recognition in the worst retail environment since the Great Depression. I for one cannot wait to see how this plays out.

 

[lenaitch]

I certainly wouldn't disagree w/you, but am curious how you reconcile what was said by the Dealer noted above, vs your statement.

I suspect a Dealer might be able to control how much, but their product selection is massive even if they only ordered a handful of certain items. My conversation was pre-Covid when a lot of their sales moved online and I think a lot of it stayed there.

They might have corporate floor plan models but they have a lot of stores in small communities that don't fit the corporate mould and have be accommodated. The one area that I am aware that individual stores can opt in or out of is firearms and ammunition sales.

 

[lenaitch]

If she’s acquiring 28 leases, that’s welcome news for soon to be former Hudson’s Bay employees. Someone is going to have to work at her stores and there’ll be 9,400 HBC employees looking for work. 1 in 3 are going to have a job back.

But without the Hudson’s Bay IP she’s starting a department store from nothing, no name recognition, no Canadian nostalgia, no Stripes. If it didn’t work for Nordstrom or Target, well established brands with a fully rolled out corporate structure and seasoned executive teams, I don’t give her much of a chance.

Note that none of these sales have been approved by the court — including Canadian Tire’s IP bid.

If Judge Osborne sees the deal, sees that Canadian Tire is paying a pittance that doesn’t even dent HBC’s debt while not taking responsibility for preserving jobs, he may not approve the sale and give it to a lower bidder whose plans preserve jobs and keep The Bay running.

At the very least, I expect the court to ask Canadian Tire Corp. to detail their plans and possibly to revise them to present the best possible outcome for creditors and employees. This ain’t over yet!

This is a really complex area of law. The Court will be operating within the Companies' Creditor Protection Act. There are some other pieces of legislation that also have to be taken into account, such as Bankruptcy and Insolvency Act (federal). The Bay is being 'wound up'. The bidding companies are fighting over the entrails. No successor company is going to take on any of the liabilities of The Bay - they are being liquidated. Assets will go for pennies on the dollar - just how many pennies is up to the Court. The Court will not be concerned about future potential jobs, the Bay's legacy, etc. Even protection of current employees rights and entitlements are pretty limited.

 

[nightstreak]

This is a really complex area of law. The Court will be operating within the Companies' Creditor Protection Act. There are some other pieces of legislation that also have to be taken into account, such as Bankruptcy and Insolvency Act (federal). The Bay is being 'wound up'. The bidding companies are fighting over the entrails. No successor company is going to take on any of the liabilities of The Bay - they are being liquidated. Assets will go for pennies on the dollar - just how many pennies is up to the Court. The Court will not be concerned about future potential jobs, the Bay's legacy, etc. Even protection of current employees rights and entitlements are pretty limited.

It is complex law and there are many different considerations which is why the court has many levers to pull to deliver the best outcome for a hierarchy of stakeholders. Justice Osborne has ruled at least twice against the wishes of Hudson's Bay's lawyers to immediately liquidate back in March, citing specifically jobs, the affect on the retail landscape and its effect on the Canadian economy and the legacy of the company itself, stating that he wished to slow things down to seek all options before liquidation. This is where the 6 store compromise appeared. Once those options were exhausted, he permitted full liquidation.

If there are two (or more) options and one of them preserves jobs and results in a better outcome for creditors and long term viability for employees, he can rule against Canadian Tire's bid and in favour of Liu's. Her 28 lease assembly is likely far more valuable both to creditors immediately and to the Canadian economy and jobs long term than Canadian TIre's paltry $30M. This is why asset sales are required to be be approved by the court and not just go to the highest bidder at auction.

If she bid $20M for the IP and $1M per lease ($48M) and Canadian Tire bid $30M for the IP that's going to be disappear into the existing Canadian Tire collection of brands, then the court can rule for the bid that results in the best outcome. He doesn't want to see Liu's new no-name department store in his courtroom in a year. Everyone understands that continuity of a beloved Canadian institution has a better chance for the employees, the Canadian economy and avoiding permanent layoffs for 10,000 retail employees, even if it's a new company underneath it all and creditors get pennies on the dollar.

 

[nightstreak]

Another track I'm watching is how the Neiman Marcus merger is being questioned by creditors and acknowledged by Osborne. He admitted concern for the short period between HBC shifting its assets to the US, breaking off the Canadian arm and then filing for protection against its Canadian creditors. Saks Global has $7B of the former HBC's real estate assets that could easily pay their Canadian debt and enable restructuring the company. I understand that this is a Hail Mary but I've seen so many twists and turns in this process that I've got an eye on it.

 

[matrix]

Billionaire B.C. mall owner Weihong Liu signs deal to buy 28 Hudson’s Bay Store leases

The chairwoman of shopping mall owner and operator Central Walk signed a deal Friday to take over leases in B.C., Alberta and Ontario.

www.thestar.com

I really hope she doesn't go with that logo.

 

[afransen]

I really hope she doesn't go with that logo.

That branding definitely can use some work. Usually retail people are a bit more savvy...

 

[matrix]

That branding definitely can use some work. Usually retail people are a bit more savvy...

It's the fact she's basically putting her name on it as an emblem. I don't like that. "New Bay", sure, but red? Not sure if that really fits.

 

[matrix]

Not sure if this information has been conveyed here, but I have been hearing rumors that TJX (Winners/HomeSense/Marshalls) is gunning for the Square One Bay lease to make a Winners/HomeSense superstore. However, I also heard through the grapevine that Oxford doesn't want them to have all three floors, and this would only happen if they divide up the space. I could see the top 2 floors used for Winners/HomeSense and another tenant on the bottom floor as most likely.

This is all speculative but they do want this done by the end of the year. I heard this about a month ago, so I'm not sure if Ruby bid for the Square One space and those plans need to be scrapped now. I think I would rather have another Winners in my mall than a brand-new company that may see the same bankruptcy judge again in a year or two.

 

[Northern Light]

That branding definitely can use some work. Usually retail people are a bit more savvy...

It's the fact she's basically putting her name on it as an emblem. I don't like that. "New Bay", sure, but red? Not sure if that really fits.

Given that 'The Tire' now owns the names Hudson's Bay Company; and 'The Bay'....... I'm not sure their IP folks would be keen on 'New Bay' from a competitor.

Even with a different font/colour......that's awfully close and would seem to imply an affiliation of sorts...