Messi Department Stores Fail To Save Or Sell

It has many chain stores, Hudson Bay and

Entering the initial stage of the acquisition, this is not surprising news for analysts who have been concerned about the two companies.

In entity

In the background of the decline, Messi, an old department store, has been struggling for two years and has been laying off shop for four consecutive years.

In the past 2016

In the same quarter, their same store sales fell by 2.1%, and also experienced 7 consecutive quarters of sales decline, followed by a wave of layoffs (10000 people) and 63 stores, the largest in four years.

Their share price has dropped by 50% compared with the peak in 2015.

It's not that the company has made a wrong decision. In fact, the strategy they implemented looks very right: reducing the cost from the real estate, investing in the electricity providers, and putting the energy into the top 150 best performing Stores - all of which were implemented earlier.

According to the world clothing shoes and hat net, the problem is on the "large scale". The change of consumers' shopping habits and the demands of young people on service quality are forcing the pformation of traditional department stores. However, such a company that has nearly 900 large shopping malls and 150 thousand employees in the United States has difficulty in changing its internal market to meet the needs of the market.

Messi's initiative to save himself is to "lose weight". In recent years, he has been laying off, closing and selling assets. Some of them are also under pressure from unhappy investors.

Investors want Messi to sell more stores so that he can make money by real estate.

But simple and thin weight did not improve their performance. Messi's lack is still a key catalyst.

If Hudson Bay Company succeeds, it is likely to assume such a role.

A new owner will probably wake up the company's alertness to the environment and increase its adaptability to change. Of course, how many changes can be turned into profits is hard to say.

Hudson Bay Company owns Sax, Fifth Avenue, Rhodes, Taylor and other luxury department stores, and bought more than 100 GaleriaKaufhof stores in Germany in 2015.

The Canada Company has been trying to expand in the United States, and two joint ventures were set up last year.

It is not surprising to buy Messi intentionally. If not, Messi is likely to be bought by others so as to form a competitive relationship with Hudson's department store brand.

However, Messi stores may still be too big for them.

Messi's market capitalization is about 10 billion dollars, while Hudson Bay is 1 billion 700 million dollars, which can mortgage the value of about 14 billion of the real estate to raise funds for debt, or to introduce another partner.

But that makes acquisitions complicated, especially when Messi is still in debt of 7 billion 500 million.

Possible solutions include Hudson Bay split into two companies after takeover, a business company, a real estate company, and the latter bear the debt.

CNBC quoted sources as saying that such a complex structure is unlikely to make a successful acquisition. The acquisition of department stores often involves a lot of real estate, which is very difficult in itself, and any paction can not change the trend of declining sales.

The risk of Hudson Bay is even greater. The brand that they bought before did not show significant growth in performance. Therefore, there is no reason to judge that the acquisition of Messi can make the latter's performance flourishing.

If Hudson Bay does not take up the plate, Messi will probably look for another buyer.

For Messi, who is in the mire, who may be less important?

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