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Hamilton Spectator
03-06-2025
- Business
- Hamilton Spectator
Court approves sale of Hudson's Bay trademarks to Canadian Tire
TORONTO - Canadian Tire Corp. Ltd.'s historic purchase of Hudson's Bay trademarks will go ahead after an Ontario judge granted permission for the deal. Judge Peter Osborne says the $30-million deal was the best possible outcome given the circumstances facing the Bay. The deal will give Canadian Tire rights to the Bay name, its coat of arms and its iconic stripes. Court documents have also shown the deal includes the Bay's Distinctly Home brand, its Hudson North apparel line, trademarks like 'Bay Days' and the Zellers catchphrase 'lowest price is the law' as well as a contract with Pendleton Woolen Mills, an Oregon-based blanket and clothing maker. The sale to Canadian Tire was the buzziest matter Osborne presided over Tuesday. At the same court hearing, he also approved a receivership application for a joint real estate venture Hudson's Bay was part of and made a declaration helping employees receive funding to recover from the collapse of their employer. The approvals came months after Canada's oldest company filed for creditor protection and days after it closed all 96 of the stores it ran under its Bay and Saks banners on Sunday. Osborne called the weekend closures 'a milestone, albeit an unhappy one' that amounts to 'the end of an era.' Hudson's Bay has said the sale and closures were necessary because the 355-year-old company was not able to attract an investor to keep some semblance of the current business alive. Canadian Tire, which also owns SportChek, Party City, Mark's and Pro Hockey Life, wound up being the winner of the Bay's trademarks after the ailing company and its advisers invited 407 people and firms to bid on the intellectual property and other assets. Ashley Taylor, a lawyer for Hudson's Bay, told Osborne that 17 bids were received. Thirteen were for intellectual property but Canadian Tire's was superior, he said. 'The Canadian Tire transaction represents the highest and best process offer resulting from a competitive process,' Taylor said. What precisely gave Canadian Tire the edge is contained in a document Taylor has asked the court to seal because it contains commercially sensitive information, including the amounts offered by the next highest bidders. Osborne granted the request. The Canadian Tire deal is the first of several Taylor is expected to ask a court to approve. He said Hudson's Bay will eventually return to court to get approval for B.C. mall owner Ruby Liu to take over up to 28 Bay leases to develop a new department store. That deal needs the support of landlords. He also teased that two other deals concerning some of the other properties the Bay used will be announced soon. The Canadian Tire deal was being discussed at a hearing that spanned several issues, including a joint real estate venture the Bay has with RioCan Real Estate Investment Trust. The venture has leases for 12 properties the department store used, but RioCan wanted to put the partnership into receivership to protect its stakeholders and maximize the value it can recover. Receivership is a process allowing a third-party to take control of a company's assets, oversee their liquidation and repay creditors. Joseph Pasquariello, a lawyer for RioCan, wanted FTI Consulting Canada appointed as the receiver because his client's 'dollars are on the line' and it wants timely solutions. Osborne approved Pasquariello's request, saying it was 'just and convenient.' Osborne also recognized Hudson's Bay as the former employer of all the department store's workers who have been terminated. The declaration allows Bay's 9,364 staff, including more than 8,300 who have already lost their jobs, to recoup money they may be owed from the retailer under the Wage Earner Protection Program Act. People who qualify under the federal program can earn up to $8,844.22 this year. This report by The Canadian Press was first published June 3, 2025. Companies in this story: (TSX:CTC.A, TSX:REI-UN)
Yahoo
06-03-2025
- Business
- Yahoo
Canadian Tire to restructure company for growth, will close some Atmosphere stores
TORONTO — Canadian Tire Corp. Ltd. is rolling out a new strategy that will see it invest $2 billion over four years to restructure the company for growth but will also mean the closure of some stores. The True North plan meant to usher in a new era for the Toronto-based retailer launched Thursday as the company was contending with tariffs the U.S. started applying to Canadian and Chinese goods, only for some of the duties on Canadian products to be rolled back later. Canadian Tire, which also owns SportChek, Party City, Mark's and Pro Hockey Life, said the new plan will move the business away from its holding company model to a more agile organization by aggregating the systems and data it holds across all its banners. The company declined an interview request but in a press release positioned the shift as a way to eliminate silos, redundancies and costly back-office processes. "We will operate more efficiently and go to market more strategically, harnessing our banners and loyalty system to elevate our scale," Canadian Tire CEO Greg Hicks promised in a statement. That quest for operational efficiency will also bring the closure of 17 Atmosphere stores Canadian Tire has deemed "uncompetitive." Fourteen of the stores selling apparel and outdoor gear will be relocated to SportChek stores in phases throughout 2025. Canadian Tire spokesperson Joscelyn Dosanjh did not indicate whether any job cuts will stem from the closures, but said in an email that the company is trying to place employees impacted by the changes at other locations as their stores in Western Canada close over the next four months. In addition to the closures, Canadian Tire's new plan will see it optimize its SportChek portfolio with new concept stores and expand its loyalty program by adding brand partners that issue Canadian Tire money and striving to acquire more Triangle Mastercard holders. It will also carry out up to $400 million in share buybacks, doubling its previously disclosed plans to repurchase $200 million worth. Guiding each part of the strategy will be a restructured leadership team. Susan O'Brien, the company's chief brand and customer officer, will now serve as its chief transformation officer, while TJ Flood, the president of its Canadian Tire retail division, will become its chief operating officer. After a search, Canadian Tire will appoint someone to take the chief commercial officer role. RBC Capital Markets analyst Irene Nattel saw the series of changes as "sensible." "If properly executed, the result should be closer connection to (Canadian Tire's) customer base and a more effective approach to procurement and merchandising, in turn driving stronger revenue growth/profitability," she wrote in a note to investors. Thursday's announcement comes weeks after Canadian Tire Corp. signed an almost $1.3-billion deal to sell sportswear company Helly Hansen to Kontoor Brands, which owns Wrangler, Lee and Rock & Republic. Hicks has also spent time recently warning of the effects of tariffs. He has said consumers had started to ease up on the frugality they adopted to cope with the economic slowdown, but that progress was likely "substantially erased" when the U.S. started levying tariff threats. Canadian Tire purchases about 15 per cent of its goods from the U.S. It estimates it could find Canadian suppliers for between 25 and 30 per cent of the items it gets from south of the border. This report by The Canadian Press was first published March 6, 2025. Companies in this story: (TSX:CTC.A) Tara Deschamps, The Canadian Press Sign in to access your portfolio
Yahoo
13-02-2025
- Business
- Yahoo
Canadian Tire CEO says tariffs could 'substantially erase' signs of economic rebound
TORONTO — Canadian Tire Corp. Ltd.'s CEO says consumers have started to ease up on the frugality they adopted to cope with the economic slowdown, but that progress has likely been "substantially erased" by tariff threats. Greg Hicks, who runs the retailer and its SportChek, Mark's and Party City banners, said Thursday that the chains have noticed a succession of interest rate cuts have had a "distinct positive psychological effect on consumers," coaxing many to pick up their spending. Yet Hicks worries the trend is fleeting. "The short story is that like our business, the economy is in a much better place than it was a year earlier," he told analysts on a conference call. "The long story is a bit more complex." The complexity is coming from a few fronts. Though consumer confidence ended the year on an uptick, he said it remains low and stands to be hampered by a forthcoming cycle of mortgage renewals that will keep shelter costs high. It could also be dramatically impeded by a range of tariffs U.S. President Donald Trump has threatened Canada with. The American leader promised a 25 per cent duty on Canadian goods and a 10 per cent tariff on energy will come into effect early next month. Aluminum and steel are slated to get hit with their own 25 per cent tariff around the same time. Canada intends to retaliate, but the animosity between the trading partners could have significant ramifications for retailers. Economists have said a trade war would send prices for many goods skyrocketing, put pressure on consumer savings and perhaps even result in layoffs and writedowns. Hicks is preparing Canadian Tire for many possibilities, including a further drop in the loonie, which would challenge foreign exchange rates. "We have already begun to try to insulate our customers from the risk of higher trade costs hitting our shelves," he said. "We are reviewing products and U.S. suppliers and assessing alternatives to the inevitable inflationary pressure these tariffs would deliver." Canadian Tire purchases about 15 per cent of its goods from the U.S. It predicts it could see "minor residual impacts" from Mexico, where Trump has also threatened 25 per cent tariffs next month, and China, where a round of tit-for-tat duties are also in play with the U.S. The company figures it could find Canadian suppliers for between 25 and 30 per cent of the items it gets from the U.S., but in some categories like auto parts, it may likely have to look overseas for alternatives. The company, however, considers itself fortunate that it has upped its dependency on Canadian businesses even more in recent years. "If you think about anything that kind of goes into a bag or a bottle, it's likely that is a Canadian supplier," Hicks explained. Homegrown ties have become increasingly important to Canadian shoppers these days. They've been fervently checking labels at stores and promising to boycott brands from south of the border in recent weeks. How much of that behaviour is spilling over to Canadian Tire's balance sheet is unclear because bouts of cold weather, which tend to spur sales, have come at the same time as the buy Canadian movement. His company is preparing for either possibility, launching discussions with suppliers, but also business leaders and the government. Hicks has told them the "unjustified economic assault from our nation's longest-standing ally" is proof that Canada is in need of "a national plan to build Canadian prosperity." Those discussions have come on the heels of Canadian Tire's fourth-quarter results, which delivered a net income attributable to shareholders of $411.5 million or $7.37 per diluted share for the quarter, up from $172.5 million or $3.09 per diluted share a year earlier. Revenue for the quarter ended Dec. 28 was $4.51 billion, up from $4.44 billion, as consolidated retail sales rose 1.1 per cent. The company says comparable sales at its Canadian Tire stores grew 1.1 per cent, while SportChek comparable sales gained 0.4 per cent. Mark's comparable sales rose 1.8 per cent. The quarter tends to be Canadian Tire's busiest because it includes the holiday season and the onset of cold weather. Last October and November were 'unusually warm,' so parts of the business that benefit from dropping temperatures were 'significantly down' headed into December, Hicks said. Holiday shopping also got pushed further into December because Black Friday didn't come until late November and the federal government didn't begin its temporary GST break on a wide swath of goods like Christmas trees and toys until Dec. 14. Convincing customers to shop with the company during the period took more work than usual because a Canada Post strike halted mail service, having 'a big impact' on the retailer, Hicks said. Canadian Tire relies on the Crown corporation to deliver flyers, but without Canada Post offering service, it set up a 'war room' to find alternative distributors, navigate how to double print flyers and amp up digital marketing. Hicks said all the efforts came in Canadian Tire's 'most important weeks' and amounted to 'a giant unplanned' test pitting flyers against digital advertising but teaching the company a lot about what mediums work best. 'We think it will just help us adapt our current strategy given the current situation with Canada Post has the potential to re-emerge,' he said. This report by The Canadian Press was first published Feb. 13, 2025. Companies in this story: (TSX:CTC, TSX:CTC.A) Tara Deschamps, The Canadian Press Sign in to access your portfolio
