Jerry Storch to leave Hudson's Bay Co.; company under fire
The owner of Saks Fifth Avenue, Lord & Taylor and Hudson's Bay has come under a new round of ire after it announced its chief executive was leaving.
Hudson's Bay Company on Friday announced that Gerald L. (Jerry) Storch is stepping down as CEO, effective Nov. 1, 2017, to return to his advisory firm, Storch Advisors. The department store retailer said it has retained an executive search firm to recruit a CEO "to take the company to its next phase of development and growth." Richard Baker, HBC governor and executive chairman, will serve as interim CEO. Baker, who had previously served as CEO of HBC, will be supported by the executive leadership team.
Similar to other department store companies, HBC has been hit with declining foot traffic and falling sales. The retailer has come under heavy pressure from activist shareholder Land & Buildings Investment Management, which wants HBC to tap into its real estate, valued at three times the company's current share price. In August, Reuters reported that HBC was planning to review its options.
On Monday, Land & Buildings' founder Jonathan Litt issued a scathing statement in which he made it clear that more action was needed beyond the departure of Storch. He called for a special meeting of HBC shareholders.
“It is typical for undervalued and struggling companies such as Hudson’s Bay to try to position the exit of top executives as a reason for investors to give them more time to right the ship – while choosing to ignore the fact that the true decision makers and those at the Board level who have been complicit in the decision making remain in power," Litt stated. "We believe this is what is happening at Hudson’s Bay.”
In the statement, Litt voiced his displeasure that Baker, who soon will be taking on the role of interim CEO, continues to call the shots.
"This is even more problematic given how Baker has been stonewalling Land & Buildings and the investment community regarding a plan to unlock the value of the real estate embedded in the company," he said.
Storch, one of the industry's most well-known executives, has served as CEO of HBC since January 2015. Prior to that, he served as chairman and CEO of Toys "R" Us. He also served as vice chairman of Target.
Storch’s departure is the latest in a series of high profile exits from the retailer. Don Watros, president of HBC International, stepped down in September. Edward Record, former finance chief of J.C. Penney, was named CFO of Hudson’s Bay in August, replacing Paul Beesley.
HBC operates more than 480 stores around the world. Its leading banners across North America and Europe include Hudson’s Bay, Lord & Taylor, Saks Fifth Avenue, Gilt, Saks Off 5th, Galeria Kaufhof, the largest department store group in Germany, and Belgium’s only department store group Galeria INNO.
Hudson's Bay Company on Friday announced that Gerald L. (Jerry) Storch is stepping down as CEO, effective Nov. 1, 2017, to return to his advisory firm, Storch Advisors. The department store retailer said it has retained an executive search firm to recruit a CEO "to take the company to its next phase of development and growth." Richard Baker, HBC governor and executive chairman, will serve as interim CEO. Baker, who had previously served as CEO of HBC, will be supported by the executive leadership team.
Similar to other department store companies, HBC has been hit with declining foot traffic and falling sales. The retailer has come under heavy pressure from activist shareholder Land & Buildings Investment Management, which wants HBC to tap into its real estate, valued at three times the company's current share price. In August, Reuters reported that HBC was planning to review its options.
On Monday, Land & Buildings' founder Jonathan Litt issued a scathing statement in which he made it clear that more action was needed beyond the departure of Storch. He called for a special meeting of HBC shareholders.
“It is typical for undervalued and struggling companies such as Hudson’s Bay to try to position the exit of top executives as a reason for investors to give them more time to right the ship – while choosing to ignore the fact that the true decision makers and those at the Board level who have been complicit in the decision making remain in power," Litt stated. "We believe this is what is happening at Hudson’s Bay.”
In the statement, Litt voiced his displeasure that Baker, who soon will be taking on the role of interim CEO, continues to call the shots.
"This is even more problematic given how Baker has been stonewalling Land & Buildings and the investment community regarding a plan to unlock the value of the real estate embedded in the company," he said.
Storch, one of the industry's most well-known executives, has served as CEO of HBC since January 2015. Prior to that, he served as chairman and CEO of Toys "R" Us. He also served as vice chairman of Target.
Storch’s departure is the latest in a series of high profile exits from the retailer. Don Watros, president of HBC International, stepped down in September. Edward Record, former finance chief of J.C. Penney, was named CFO of Hudson’s Bay in August, replacing Paul Beesley.
HBC operates more than 480 stores around the world. Its leading banners across North America and Europe include Hudson’s Bay, Lord & Taylor, Saks Fifth Avenue, Gilt, Saks Off 5th, Galeria Kaufhof, the largest department store group in Germany, and Belgium’s only department store group Galeria INNO.