Hudson’s Bay Co. has completed a series of real estate deals worth US$340 million in the United States and Canada, with the company claiming the cash will help it finance its retail business, which has fallen behind on supplier payments.
HBC LP, the parent company that owns Hudson’s Bay, Saks Fifth Avenue and Saks Off 5TH, confirmed the deal in an email to the Globe and Mail on Tuesday. Canada’s oldest retailer is using cash to pay vendors for long past due invoices.
“HBC is committed to our vendor partners and is committed to ensuring that all financial obligations are met,” spokeswoman Tiffany Boulle said in a statement in response to questions from the Globe about late payments. “The payment delays are a result of HBC navigating the challenging environment that is impacting the entire Canadian retail industry in particular.”
Officials at two Canadian companies that do business with Hudson’s Bay confirmed to the Globe that the retailer has been behind on payments in recent months, and that one of the companies is withholding shipments. . The officials requested anonymity because they have an ongoing relationship with HBC and are awaiting payment.
While 90-day payment terms are common in the retail industry, and it’s not unusual for retailers to experience slight delays, HBC has seen delays of several weeks or even several weeks since last spring, according to people who spoke to the Globe. It is said that it is a month late.
Earlier this week, trade publication The Business of Fashion reported, citing unnamed sources, that HBC-owned American chain Saks was withholding payments from several vendors. Officials told the publication that the company had reduced or stopped shipping products to Saks while waiting for payment. The magazine also reported a US$340 million deal on Tuesday.
The report follows an anonymous complaint on the social media account Estée Laundry that Estée Lauder has stopped fulfilling orders from Saks because Estée Lauder has not paid past invoices. . Estée Lauder did not respond to a request for comment.
The news follows significant job cuts at Hudson’s Bay. The retailer cut hundreds of jobs at its headquarters earlier this year to “streamline its operations.”
Hudson’s Bay is working to resolve the issue with its vendors as the critical holiday shopping season gets into full swing, putting added pressure on retailers to keep stores stocked and products delivered reliably. . Deliver to online customers on time. This holiday season is already shaping up to be a tough one for the industry, as inflation-stricken shoppers cut back on spending and stores compete for customers with deep discounts.
In a statement sent Tuesday, HBC values its North American real estate portfolio at approximately $7 billion. HBC’s real estate division operates separately from its retail operations and generates between $300 million and $500 million annually from other sources, such as the sale of some of its buildings and payments from landlords. Redevelopment of rented store space. The statement added that these transactions will strengthen the company’s liquidity position.
“As we focus on financial soundness and strategic growth initiatives, we continue to invest in this valuable asset base,” Ian Putnam, president and CEO of HBC Property & Investments, said in an emailed statement. “and the increased liquidity it generates will strengthen our business operations.”
HBC also raised capital by spinning off the e-commerce businesses of its chain of stores into separate businesses and selling stakes in those digital businesses. The company raised US$500 million in 2021 by selling a stake in Saks Department Store’s online business. The company said at the time that US$200 million of these proceeds would be used to strengthen its balance sheet. A few months later, the company sold another stake in his SaksOff5th.com, this time for about $200 million.