The owner of Saks Fifth Avenue is getting pressured to sell
The owner of Saks Fifth Avenue is in the crossha𒆙irs of an activist investor.
Canada-based Hudson’s Bay Co., which owns the Lord & Taylor chain in addition to Saks, is getꦏting pressured to either take itself private or sell its valuable real estate holdings, which a hedge fund claims could be worth four times the company’s current stock price.
Hudson’s Bay shares on the Toronto Stock Exchange surged nearly 15 percent to $10.17 Canadian in midday trades Monday.
The land holdings of Hudson’s Bay — controlled by New York real estate mogul Richard Baker — include Saks Fifth Avenue’s flagship on Fifth Avenue, which “is one of the most valuable locations not only in Manhattan, but in the United States,” accordi𝓀ng to Jonathan Litt of Land & Buildings Investment Management, a♑ hedge fund that has taken a 4.3 percent stake in Toronto-based Hudson’s Bay.
“I𒅌s the best use of this location truly a department store?” Litt added in a letter to 🎐Hudson’s Bay’s board Monday. “What about a hotel? Or office?”
“If there is a smarter and better use of any or all of the loca🐻tions, stores should be closed and redeveloped and put towards their optimal use,” Litt wrote.
Hudson’s Bay — which recently ended talks to buy Neiman Marcus — said in 🗹a statement that it is “reviewing the letter and🌠 will respond in due course.”
HBC’s real estate is four times as valuable at $35 Canadiꦕan per shaᩚᩚᩚᩚᩚᩚᩚᩚᩚ𒀱ᩚᩚᩚre as the company’s opening share price of $8.88 Canadian on Monday, according to Litt’s letter.
“This drastic public markets mis-pricing is why Hudson’s Bay should evaluate all strategic options to maximize value for shareholders, including monetization or repurposing of real estate or the company being taken private⛦ by management,” Litt wrote.
His firm also agitated for change this month at mall developer Taubman Centers, which owns the Mall at Short Hills, but lost a shareholder vote.
Saks Fifth Avenue is undergoing a $250 million, three-year renovation aimed at making its store more exciting and experiential, including res♈taurants and spa services.
Its Lord & Taylor flagship on Fifth Avenue, which it owns, underwent a series of smaller revamps, and is considering plans to develop a rooftop 𝓰space or tower on top of the store, The Post reported in April.
Unlike most o♉f its peers, the Canadian retailer owns most of its stores and insiders own 20 percent of the $1.2 billion company, according to Litt.
Sources close to Hudson’s Bay, however, say management and insiders own more than 50 percent of the company🅠, whicꩵh makes its unlikely that Land & Buildings will be a force for change.
Last week, the company announced a reorganization plan in which it’s slashing some 2,000 jobs and expecting to save $350 million.