By Stephanie Clifford and Peter Lattman - from the New York Times
SCARSDALE, N.Y.
Lord & Taylor's flagship store now includes a section for Hudson's Bay Company products, since Richard A. Baker bought both and merged them. (Photo by Robert Caplin for the New York Times)
SCARSDALE, N.Y.
RICHARD A. BAKER dashes through the Lord & Taylor store here like Willy Wonka on a chocolate high.
Look at these sweaters!
Check out this Ralph Lauren!
Just wait till you see our store in Yonkers!
He squeaks to a stop at a table stacked with derrière enhancers. “How is this doing, Charlie?” he asks the store manager.
Then he surveys his domain: “This building alone could be a $100 million property!”
If Mr. Baker sounds like a rich kid playing with his new toys, well, that’s because he is a rich kid playing with his new toys. Only the toys happen to be two of the oldest department store chains in North America: Lord & Taylor, the grande dame that used to anchor the Ladies’ Mile in Manhattan, and the Hudson’s Bay Company of Canada, which traces its roots back to the 17th-century fur trade.
How Mr. Baker, 45, came to own these baubles is a story for our financial times. He’s not exactly a self-made man. His father, Robert C. Baker, owns a giant shopping mall development company. But in 2006, just before the recession, the younger Mr. Baker took a flier and bought Lord & Taylor, and later the Hudson’s Bay Company, putting down almost no money and borrowing more than $1 billion to finance the deals. Just about everyone in retailing wrote him off. Many whispered that he would get hammered, like several investment hotshots who set their sights on this business.
But a funny thing happened on the way to the comeuppance. It turns out that Mr. Baker wasn’t so bad at running department stores. In 2010, sales at Lord & Taylor’s 46 stores rose 12.2 percent from the previous year, and are now higher than they were before the recession bit. And Hudson Bay’s flagship Bay stores posted their first increase in same-store sales in a decade. Earnings at the combined companies totaled $450 million last year, before taxes, up from $330 million in 2009.
In January, Mr. Baker solved the company’s debt problem, striking a complex deal to sell the rights to leases on an under performing division of the Hudson’s Bay Company to Target for about $1.8 billion. There are discussions about an initial public offering of the combined companies as soon as this fall. Read more...
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