Online.barrons.com: 12/17/2012
GE4.01 - Identify Canadian companies and industries that have benefited from increasing global business activity in the last few decades.
Summary
Canada’s oldest retailer, the Hudson’s Bay Company has certainly had a successful past. It began with the trading posts of which were strategically set up along Hudson’s Bay and has remained a strong company for two centuries. However, local investors are concerned about the current status of Hudson’s Bay as well as other retailers from Canada. The most recent owner of the company, Hudson’s Bay, comes from a real-estate family in the United States which has raised some concerns from the investors’ perspectives. Hudson’s Bay’s share price in November 2012 was recorded at $17.27 (Canadian), which declined by 15% from its original asking price of $20 and then settled at $16.75. Analysts concluded that this change seems too negative when compared to the company’s recent successes. As of today, the department store company generates annual revenue of about $4 billion from close to 25 million square feet of the stores, Hudson’s Bay, Home Outfitters, and Lord & Taylor - an American-based company. Hudson’s current owner, Richard A. Baker, understands that these department stores have to expand on the different brands they offer in order to attract more consumers and drive up their sales. His first steps were to hire a former-merchandising chief from Holt Renfrew to ‘restore its fashion sense’ and to replace the company’s management. New competition for Hudson’s Bay include Target and Nordstrom and cash flows are predicted to grow by 10% with each annual gain in revenue of 5%.
Connection
Though Hudson’s Bay’s share prices may not have been as great for the company in the past year or so, the company has certainly experienced success in the last few decades by increasing its global business activity. In fact, the Hudson’s Bay Company definitely has a greater selection of products that are created in countries outside of Canada and has very little to offer in terms of domestic products. In the past few decades, Hudson’s Bay has managed to import a greater variety of brands that appeal to different consumers than it ever had before. In addition, the materials used in the process of making nearly all of the clothing and/or accessories come from places other than Canada. Even the olympic gear with Canadian logos stamped all over it has been made in foreign factories to reduce production costs and increase the company’s revenue. The Hudson’s Bay Company has not only increased global business activity through the selection of products though; the company, like many others, has an online store and was recently bought by an investor from the United States, Richard A. Baker who is attempting to revamp the company for future success. However unlike most companies of today with online stores, Hudson’s Bay actually does not ship outside of Canada, but this may lead consumers to travel to Canada for certain products that are exclusive or Baker might soon change this company policy in order to satisfy consumers’ wants from other countries.
Canada’s oldest retailer, the Hudson’s Bay Company has certainly had a successful past. It began with the trading posts of which were strategically set up along Hudson’s Bay and has remained a strong company for two centuries. However, local investors are concerned about the current status of Hudson’s Bay as well as other retailers from Canada. The most recent owner of the company, Hudson’s Bay, comes from a real-estate family in the United States which has raised some concerns from the investors’ perspectives. Hudson’s Bay’s share price in November 2012 was recorded at $17.27 (Canadian), which declined by 15% from its original asking price of $20 and then settled at $16.75. Analysts concluded that this change seems too negative when compared to the company’s recent successes. As of today, the department store company generates annual revenue of about $4 billion from close to 25 million square feet of the stores, Hudson’s Bay, Home Outfitters, and Lord & Taylor - an American-based company. Hudson’s current owner, Richard A. Baker, understands that these department stores have to expand on the different brands they offer in order to attract more consumers and drive up their sales. His first steps were to hire a former-merchandising chief from Holt Renfrew to ‘restore its fashion sense’ and to replace the company’s management. New competition for Hudson’s Bay include Target and Nordstrom and cash flows are predicted to grow by 10% with each annual gain in revenue of 5%.
Hudson's Bay's new logo from thebay.com
Connection
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