The Real Deal New York

Activist investor wants Hudson’s Bay to tap into its real estate potential

Jonathan Litt says the owner of Saks Fifth Avenue should follow in Macy’s footsteps, or sell to them
June 21, 2018 06:00PM

Jonathan Litt and Saks Fifth Avenue flagship in New York City (Credit: Getty Images)

It’s been almost a year since Jonathan Litt, founder of hedge fund Land & Buildings, pleaded for retail giant Hudson’s Bay Company to change its ways.

The activist investor is at it again, asking the owner of Saks Fifth Avenue to look into new ways to improve shareholder value. Specifically, he wants it to sell off some of its real estate, Bloomberg reported.

In a letter to shareholders, Litt said Hudson’s Bay could learn from its rival, Macy’s Inc., which has been unloading many of its stores, after steadily declining sales. Macy’s stock is up 50 percent this year as a result of its latest real estate deals, he added. Meanwhile, Hudson’s Bay stock has ticked up just 4 percent so far this year.

“One could even reasonably ask whether the most logical course for HBC at this point would be an acquisition by Macy’s as opposed to trying to play catch up,” wrote Litt in the letter released Thursday. His firm owns a 6.2 percent stake in Hudson’s Bay.

Hudson’s Bay stock price was around $11.70 per share, though Litt contended the company’s real estate alone is worth $31 per share.

Amid a decline in stock price, the Canadian retailer has been exploring different ways to turn the tide.

Earlier this month, the company announced the closure of its flagship Lord & Taylor store at 424 Fifth Avenue in Manhattan, after selling the building last year to WeWork and Rhone Capital for $850 million. It also recently sold its online shopping site Gilt. [Bloomberg] — Natalie Hoberman