Hudson’s Bay Company (HBC) has made a decision to sell its flagship store in downtown Vancouver, leading the way to a potential landmark deal and a major shift in the company’s strategy.
The Canadian-based department store retailer has contracted real estate firms CBRE and Brookfield Financial Group to find a buyer for the iconic store, according to a report in The Globe and Mail.
The 1927-built, six-storey building, spanning almost an entire city block, is one of Vancouver’s most prominent buildings, with its cream terra cotta exterior and Corinthian columns. With a floor area of 650,000 sq. ft., it is also one of the largest buildings in the city.
It is believed the property could sell for as much as $900 million, and HBC will continue to operate from the store location through a lease-back arrangement. HBC also leases back its Queen Street flagship store in downtown Toronto, which was sold to Cadillac Fairview for $650 million in 2014.
Daily Hive has reached out to HBC for further comment.
HBC’s move is in response to its depressed stock price and poor financial results within an increasingly difficult retail climate, with rising competition from Nordstrom, Holt Renfrew, and other retailers and online shopping.
Last week, HBC announced it was selling its Lord & Tayor’s New York City flagship to WeWork in a deal worth USD$850 million (CAD$1.075 billion).
As part of the deal, Hudson’s Bay stores at downtown Vancouver, Queen Street in downtown Toronto, and Galeria Kaufhof in Frankfurt will be downsized to allow WeWork to expand its business into the upper floors of each store.
“This partnership places HBC at the forefront of dynamic trends reshaping the way current and future generations live, work and shop: the sharing economy and urban and suburban mixed-use real estate planning,” said Richard Baker, HBC’s Governor, Executive Chairman and interim CEO, in a statement.
“Our partnership with the WeWork team creates new opportunities for HBC to redefine the traditional department store by extending those communities and drive additional traffic to our stores, particularly as we add co-working and community space to existing, vibrant retail locations.”
A spokesperson with HBC previously told Daily Hive the departments within the downtown Vancouver store will not ‘disappear’, as the departments will be reconfigured into other parts of the store to optimize the usage of the retail area. The timeline for the reshuffle has not been established.
WeWork is expected to occupy the space of the relatively new men’s department, which is currently a 70,000 sq. ft. retail space on the sixth floor of the building. In 2011, HBC relocated the entire men’s department from the basement to the renovated upper floor to accommodate Vancouver’s first Topshop/Topman store.
The office-sharing company is making a major push into the downtown Vancouver market as it is already opening an 80,000-sq-ft space in the Bentall III office tower and a 53,000-sq-ft space in Bentall II. The initial Bentall III space is largely occupied by Amazon.