In a statement today, HBC made it clear: two Saks Fifth Avenue stores, one in downtown Toronto and the other in Sherway Gardens, will open in Canada, the first of six full-line stores.
The two stores are part of a $650 million Canadian (about $587.9 million) deal Hudson’s Bay Company made with Cadillac Fairview Corp. Ltd., a real estate firm. Under the agreement, Cadillac Fairview will be buying the retail and office complex from HBC and renting it back for 25 years.
A 150,000-square-foot flagship Saks will be carved out of the existing Hudson’s Bay store, which is about 750,000 square feet. Saks will open in the fall of 2015, in advance of Nordstrom, which plans to open at the other end of the mall in the fall of 2016 in a space being vacated by Sears.
The second Saks will open in Sherway Gardens at a former Sears location in Spring 2016.
Proceeds of the deal, expected to close in late February, will be used to reduce debt and for growth, Hudson’s Bay said.
“This sale-leaseback provides HBC with resources to deleverage and accelerate investment in our growth initiatives,” Hudson’s Bay CEO Richard Baker said in a statement. “We continue to explore other options to create additional value through the power and potential of our real estate assets.”