Q3 Revenues Up as PE-Backed HBC Prepares for IPO

Canadian retailer, Hudson’s Bay Co. (HBC) reported 3.8% growth in revenues in Q3 2012 in a revised prospectus that anticipates its planned IPO.  Privatized in 2006, HBC was acquired by  NRDC Equity Partners in 2008, and has since seen a number of  its divisions sold off, including Zellers Inc., which was acquired by Target Corp. last year.


HBC opens books for IPO
The Canadian Press

November 3, 2012   Hudson’s Bay Co. is reporting improved third-quarter revenue and says it sees no lasting effects from hurricane Sandy on its U.S. holdings as the privately held department store operator plans a return to the public markets.

In a revised prospectus filed as part of HBC’s plans for an initial public offering, Canada’s oldest company said revenues improved about 3.8 per cent in its most recent quarter, although margins were squeezed by shortages and seasonal clearance markdowns.

HBC also said there was no significant damage to its Lord & Taylor stores in the path of hurricane Sandy in the U.S. Northeast and that the storm probably won’t cause any significant effect on earnings or sales in the fourth quarter.

Last month, the owner of the Bay and Home Outfitters as well as Lord & Taylor filed a preliminary prospectus for an initial public offering after years of hinting that it was in the works.

HBC last traded on the Toronto Stock Exchange in 2006 before it was taken private by U.S. businessman Jerry Zucker, who later died unexpectedly.

New York-based NRDC Equity Partners acquired it in 2008 for $1.1 billion from Zucker’s widow.

The company’s prospectus did not provide the specific number of shares to be sold or how much they would sell for.

However, Bloomberg news agency reports that according to “sale documents,” Hudson’s Bay will sell up to 19 per cent of the company in a move to raise $400 million. The IPO share price would range between $18.50 and $21.50.

Meanwhile, the revised prospectus says preliminary results for the third quarter ended Oct. 27 show total revenue rose to $930.4 million from $896.7 million in the comparable year-earlier quarter. However, inventory shortages and clearance markdowns would have a negative effect on profit margin, although no estimate was disclosed.

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