By Carolyn King
TORONTO--The Hudson's Bay Co., owner of the upscale Saks Fifth
Avenue chain, named mass-market retail veteran Gerald Storch as its
next chief executive.
Mr. Storch, a former Target Corp. executive, who most recently
served as the chief executive of Toys "R" Us Inc., will take over
from Richard Baker, who will remain executive chairman. Mr. Storch
will have oversight of all of the company's brands, including Saks
and its outlet chain Off 5th, as well as Lord & Taylor,
Hudson's Bay, Home Outfitters and the company's digital group.
With the arrival of Mr. Storch, Mr. Baker will be freed up to
focus on strategic issues, including international expansion,
unlocking value from the company's real estate and future
acquisitions. He is considering spinning off the company's
properties into a real-estate investment trust.
To that end, Hudson's Bay said last month that independent
appraisers valued the Saks' Fifth Avenue flagship in Manhattan at
$3.7 billion, more than the $2.9 billion including debt that
Hudson's Bay paid for the luxury retailer a year ago.
In an interview, Mr. Baker said he had reached out to Mr. Storch
shortly after he stepped down as CEO of Toys "R" Us in February
2013. Over lunch at Ai Fiori in Manhattan, the two talked about
their visions for retailing, including the impact of technology and
the rise of the Internet. Shortly after, Mr. Baker retained Mr.
Storch as an adviser.
Mr. Storch was instrumental in mapping out expansion plans for
Off 5th, which has begun to open stores in urban markets, including
a planned location in downtown Manhattan scheduled for 2016.
"Value is one of the strong themes in retailing," Mr. Storch
said. He will also be focused on improving and expanding the
company's digital capabilities in an effort to blend the online and
physical store operations seamlessly.
Mr. Storch has business and law degrees from Harvard and has
worked for consulting firm McKinsey Co. The longtime consultant has
a reputation as a big-picture thinker. His appointment is effective
Jan. 6.
Don Watros, Hudson Bay's president, was named president of the
company's newly formed International unit, where he will be charged
with expanding the stable of brands overseas. Mr. Watros will
continue to report to Baker.
Saks currently has five locations outside the U.S., two in the
Middle East, two in Mexico and one in Kazakhstan.
Carolyn King contributed to this article.
Write to Suzanne Kapner at Suzanne.Kapner@wsj.com
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