6 ms·

If after 350 years they couldn't manage to turn enough profit to buy real estate then I guess they had it coming

switchbak 6y ago
Hey those pelts were all the rage in the late 1700's! Jacques Cartier was a fan, but he didn't really have the best eye for clothes.
- djkivi 6y ago
  Well, the Bay's been around since God who knows...maybe it's time to move on.
kmeisthax 6y ago
Most retailers actually try to get rid of their real estate. The ones that hold onto it are constantly harassed by their shareholders to either sell to a REIT or spin one off.
- R0b0t1 6y ago
  But are the shareholders demanding something reasonable? I've looked into this and can't find anything that isn't just a trick to make the books look better.
  - lmm 6y ago
    A basket of options is worth more than an option on a basket; that's not just accountancy. Shareholders would rather the business and the building were in separate pockets so that if one loses money they can walk away from it and keep everything from the other.
  - CountSessine 6y ago
    Reasonable is whatever you want it to be. Shareholders want the share price to go up, and they can make life difficult for the board and the management team. It's awful, but as a shareholder, once that real estate has been sold, the share price went up, and you've liquidated your position, do you really care what happens next?
  - Scoundreller 6y ago
    Shovelling the real estate to a REIT does make the books better. Pension plans will pay more money for real estate in a REIT than a Corp because pension plans don’t pay taxes, and REITs don’t either (when the recipient is a pension). Sometimes the “sale” is a separate fund and they simply give each shareholder a REIT unit for every share they have. Big corps with high family ownerships like these anyway because it helps isolate the RE from getting dragged down by the retail division. And it provides this diversification via tax-deferred spin-off.
  - bregma 6y ago
    Land generates no revenue on its own. Shareholders are not interested in 100 square feet of dirt. They're interested in a slice of the revenue generated by seeking rent on the dirt someone else is using.
    - R0b0t1 6y ago
      Ownership provides insulation from cash flow problems. It seems like it's just a book trick and real estate speculation is so lucrative that any investor wants to optimize businesses against their best interest as long as they own real estate.
      - kmeisthax 6y ago
        In the defense of the "spin off a REIT" crowd, a business with cash flow problems is making uneconomic use of commercially zoned land by keeping restauraunts nobody owns on it, and could make more money by either selling or renting the land to a more profitable competitor. My personal retort to that would be some long-winded complaint about how America's cities deliberately mismanage land to inflate it's value, but radical political explanations don't make businesses profitable. If the land is going to be ridiculously expensive, you might as well try to make something off of it, eh? That doesn't excuse the fact that most restauraunt REITs are nearly-transparent scams for well-connected shareholders to siphon off land from valuable businesses, though.
bonestamp2 6y ago
Actually, they have close to $5 billion in real estate assets.
- conductr 6y ago
  Then they can pay rent
  - deleted 6y ago
    [deleted]
tesseract 6y ago
They were not lacking for real estate for the majority of that time period https://en.wikipedia.org/wiki/Rupert%27s_Land https://en.wikipedia.org/wiki/Rupert%27s_Land
throw0101a 6y ago
> If after 350 years they couldn't manage to turn enough profit to buy real estate then I guess they had it coming They own plenty of real estate: * https://www.retail-insider.com/retail-insider/2020/10/hudsons-bay-company-announces-division-to-redevelop-real-estate-assets/ https://www.retail-insider.com/retail-insider/2020/10/hudson... It's just that a lot of retail is now done at malls, and so they have to rent from the mall's owner as there are fewer and fewer 'stand-alone' locations that shoppers would be willing to make a separate trip to, especially in more suburban areas. There are pros and cons to each approach: > The big valuation gap is due to disagreements over how much of Hudson’s Bay’s prime real estate can be divested while keeping it operational. Selling off property raises cash but also makes it more financially burdensome for the company to rent the space for the stores it operates. As a result, it would likely close stores, and its retail footprint would begin to shrink. […] > Sale lease-back arrangements in which retailers sell their properties and become tenants have become increasingly popular in the past few years as the downturn in brick-and-mortar retail brought about by the rise of internet shopping has put pressure on retailers to raise cash. > However, some retailers resist them because they view the rent obligation as burdensome, a stance that often attracts investor criticism. Another department store operator, Macy’s Inc., for example, was pressured by hedge fund Starboard Value LP three years ago to do more to cash out on its real estate. * https://financialpost.com/news/retail-marketing/hudsons-bay-chairmans-buyout-bid-pits-retail-against-real-estate https://financialpost.com/news/retail-marketing/hudsons-bay-...
dghughes 6y ago
Your comment is so funny it hurts.
btilly 6y ago
There is an irony in that statement. The largest single real estate transaction that I am aware of was the purchase of Prince Rupert's land by Canada from the Hudson's Bay Company in 1870. For comparison, it was roughly twice the size of the Louisiana Purchase. (It was actually not exactly a sale, but close enough. Canada paid Hudson's Bay to surrender its charter to England, that then assigned the land, free of said charter, to Canada.)

Hey those pelts were all the rage in the late 1700's! Jacques Cartier was a fan, but he didn't really have the best eye for clothes.

djkivi 6y ago
Well, the Bay's been around since God who knows...maybe it's time to move on.

kmeisthax 6y ago

Most retailers actually try to get rid of their real estate. The ones that hold onto it are constantly harassed by their shareholders to either sell to a REIT or spin one off.

R0b0t1 6y ago
But are the shareholders demanding something reasonable? I've looked into this and can't find anything that isn't just a trick to make the books look better.
- lmm 6y ago
  A basket of options is worth more than an option on a basket; that's not just accountancy. Shareholders would rather the business and the building were in separate pockets so that if one loses money they can walk away from it and keep everything from the other.
- CountSessine 6y ago
  Reasonable is whatever you want it to be. Shareholders want the share price to go up, and they can make life difficult for the board and the management team. It's awful, but as a shareholder, once that real estate has been sold, the share price went up, and you've liquidated your position, do you really care what happens next?
- Scoundreller 6y ago
  Shovelling the real estate to a REIT does make the books better. Pension plans will pay more money for real estate in a REIT than a Corp because pension plans don’t pay taxes, and REITs don’t either (when the recipient is a pension). Sometimes the “sale” is a separate fund and they simply give each shareholder a REIT unit for every share they have. Big corps with high family ownerships like these anyway because it helps isolate the RE from getting dragged down by the retail division. And it provides this diversification via tax-deferred spin-off.
- bregma 6y ago
  Land generates no revenue on its own. Shareholders are not interested in 100 square feet of dirt. They're interested in a slice of the revenue generated by seeking rent on the dirt someone else is using.
  - R0b0t1 6y ago
    Ownership provides insulation from cash flow problems. It seems like it's just a book trick and real estate speculation is so lucrative that any investor wants to optimize businesses against their best interest as long as they own real estate.
    - kmeisthax 6y ago
      In the defense of the "spin off a REIT" crowd, a business with cash flow problems is making uneconomic use of commercially zoned land by keeping restauraunts nobody owns on it, and could make more money by either selling or renting the land to a more profitable competitor. My personal retort to that would be some long-winded complaint about how America's cities deliberately mismanage land to inflate it's value, but radical political explanations don't make businesses profitable. If the land is going to be ridiculously expensive, you might as well try to make something off of it, eh? That doesn't excuse the fact that most restauraunt REITs are nearly-transparent scams for well-connected shareholders to siphon off land from valuable businesses, though.

bonestamp2 6y ago

Actually, they have close to $5 billion in real estate assets.

conductr 6y ago
Then they can pay rent
- deleted 6y ago
  [deleted]

tesseract 6y ago

They were not lacking for real estate for the majority of that time period https://en.wikipedia.org/wiki/Rupert%27s_Land https://en.wikipedia.org/wiki/Rupert%27s_Land

throw0101a 6y ago

> If after 350 years they couldn't manage to turn enough profit to buy real estate then I guess they had it coming They own plenty of real estate: * https://www.retail-insider.com/retail-insider/2020/10/hudsons-bay-company-announces-division-to-redevelop-real-estate-assets/ https://www.retail-insider.com/retail-insider/2020/10/hudson... It's just that a lot of retail is now done at malls, and so they have to rent from the mall's owner as there are fewer and fewer 'stand-alone' locations that shoppers would be willing to make a separate trip to, especially in more suburban areas. There are pros and cons to each approach: > The big valuation gap is due to disagreements over how much of Hudson’s Bay’s prime real estate can be divested while keeping it operational. Selling off property raises cash but also makes it more financially burdensome for the company to rent the space for the stores it operates. As a result, it would likely close stores, and its retail footprint would begin to shrink. […] > Sale lease-back arrangements in which retailers sell their properties and become tenants have become increasingly popular in the past few years as the downturn in brick-and-mortar retail brought about by the rise of internet shopping has put pressure on retailers to raise cash. > However, some retailers resist them because they view the rent obligation as burdensome, a stance that often attracts investor criticism. Another department store operator, Macy’s Inc., for example, was pressured by hedge fund Starboard Value LP three years ago to do more to cash out on its real estate. * https://financialpost.com/news/retail-marketing/hudsons-bay-chairmans-buyout-bid-pits-retail-against-real-estate https://financialpost.com/news/retail-marketing/hudsons-bay-...

dghughes 6y ago

Your comment is so funny it hurts.

btilly 6y ago

There is an irony in that statement. The largest single real estate transaction that I am aware of was the purchase of Prince Rupert's land by Canada from the Hudson's Bay Company in 1870. For comparison, it was roughly twice the size of the Louisiana Purchase. (It was actually not exactly a sale, but close enough. Canada paid Hudson's Bay to surrender its charter to England, that then assigned the land, free of said charter, to Canada.)