Iconic Canadian retailer Canadian Tire (TSX:CTC.A) is poised to scoop up some promising intellectual property (IP) assets from Hudson’s Bay Company (HBC) as it winds things down and closes most of its stores. It’s noteworthy that the deal doesn’t include tangible assets (think inventory or existing stores) and will cost $30 million — a modest price that will allow Canadian Tire to keep the multi-century-old brand alive.
Back in March, I’d suggested that Canadian Tire go after some of HBC’s prized brands, which included its legendary Stripes alongside a wide range of other brands that I thought would have been a great fit over at Canadian Tire, Sport Chek, and Mark’s.
At the time, Canadian Tire had more than enough dry powder on the balance sheet. And with a strategy of acquiring exclusive brands, such a deal just made sense, especially given the surge in Canadian patriotism in recent months at the hands of Trump’s tariffs and the rise of the “buy Canadian” trend.
“With plenty of cash to put to work after the sale of Helly Hansen, perhaps Canadian Tire should acquire some prized assets from Hudson’s Bay Company as it goes into liquidation.” I wrote in my previous piece. “Undoubtedly, the Stripes brand is iconic, and I believe it would do profoundly well in the hands of Canadian Tire, another cherished Canadian company that may be able to expand the brand in a meaningful way.”
The HBC legacy will live on: Canadian Tire to buy HBC Stripes and other brands in a $30 million deal
As Hudson’s Bay aggressively sold down its inventory, the legendary Stripes items were quickly swept off the shelves. Indeed, the Stripes are a part of Canadian history. While only time will tell if Canadian consumers will continue buying up Striped goods once they’re available at various Canadian Tire retail stores, I still think Canadian Tire walked away with a massive bargain in hand as it aims to preserve what I view as an essential part of Canadian history.
Sure, it may sound a bit strange at first to envision a “shop-in-shop” HBC section between Canadian Tire’s sports goods and home renovation section. However, for Canadian Tire’s other storefronts (most notably Mark’s and Sport Chek), I think HBC and Stripe-branded goods make for a great addition.
As a massive fan of HBC and the Stripes-branded goods, I’ll be eagerly waiting for the moment when Stripes jackets, shirts, and more finally land at the local Sport Chek or Canadian Tire as the discretionary retailer looks to give its take and expand upon HBC’s prestigious, multi-century-old brands.
Apart from the unmistakable (and very Canadian) multi-coloured Stripes and the Hudson’s Bay branding (which includes the crest), Canadian Tire will also gain rights to a wide range of other brand names, including Zellers, Distinctly Home, Gluckenstein, and Hudson North once the deal’s approved by a judge. These are incredible additions to Canadian Tire’s growing portfolio of exclusive brands. And I’m quite shocked at how little it costs the firm for the deep portfolio of assets, on which I’m sure Canadian Tire will fetch a respectable return.
The bottom line
For now, Canadian Tire hasn’t really given specifics on what it intends to do with the HBC brands. We’ll just have to wait and see. Regardless, I’m very excited about the possibilities, as Canadian Tire has done such a great job of bringing out the best and building upon its acquired brands. Pundits seem to think a “store-in-store” concept would be coming. If it happens, Canadian consumers will have yet another reason to head over to the local Canadian Tire.
In any case, I’d chalk the $30 million deal as a huge win for Canadian Tire and its investors. It’s a low-risk/high-reward type of proposition, in my view, as Canadian Tire keeps the cherished HBC brands alive.
