Winnipeg Free Press

Winnipeg Free Press (Newspaper) - March 26, 2025, Winnipeg, Manitoba WINNIPEGFREEPRESS.COM ● B7 BUSINESS WEDNESDAY, MARCH 26, 2025 Hudson’s Bay likely to draw multiple bidders for assets: experts TORONTO — Retail experts expect Hudson’s Bay to see little love for Zeddy but a whole lot for its store leases and trademark stripes as it starts soliciting buyers for its assets. Canada’s oldest company, which is on the brink of failure as it liquidates all but six stores and hunts for a way to stay alive, was scheduled to start seek- ing buyers for its most prized posses- sions this week. The search will unfold in two parts: one for leases and another for the re- tailer’s remaining assets. It’s not clear from court documents what the non-lease assets are and Hud- son’s Bay did not immediately respond to a request for comment about the sales process, but experts believe the processes allow for a wide range of of- fers. They expect the retailer’s brands — Stripes, Hudson North, Gluckstein and Zellers — to be for sale. Many agree the company’s most lu- crative assets are its leases, which cov- er gigantic spaces in high-traffic neigh- bourhoods and anchor tenant spots in shopping centres. While it’s unlikely another retailer will want to take over all that space, ex- perts say there are bound to be takers if the property is broken up into smaller units or offered for residential use. “Nobody’s going to step in and take all those locations in one fell swoop,” said Carl Boutet, chief strategist at Montreal-based retail advisory com- pany Studio RX. “Slow and intentional. That’s the name of the game right now, especially in this environment.” He expects residential developers, entertainment businesses and other re- tailers to be among the parties that ex- press interest in the leases by the April 7 deadline. Binding bids will be due May 1 with a final decision to be made sometime after. Another hot item will be the com- pany’s stripes. Hudson’s Bay’s green, red, yellow and indigo branding dates to 1779, when the company with fur trading origins adapted the motif from point blankets bearing only gold stripes that were traded by settlers in the 1600s. The company has since splashed the stripes across everything from coats and Barbie dolls to bath towels and can- dles. Grant Packard, an associate profes- sor of marketing at York University who previously held a vice-president role at Indigo Books & Music Inc., said neither the stripes nor the blankets will die because they’re both so iconic. “The blanket is going to be around in some shape or form in the future,” he said. “We’re not going to lose it.” He imagines another Canadian brand like Roots or Red Canoe will try to make an offer that keeps the stripes alive but in a smaller form, like a spe- cialty shop within larger stores. Elisha Ballantyne, a Toronto-based retail consultant who has worked for Target, Walmart and Zellers, agrees the stripes have potential to fit into “a shop-in-shop” concept at a retailer like Canadian Tire or Hudson’s Bay’s rival department store La Maison Simons. She thinks a buyer could expand the stripes branding across a whole host of other products and take advantage of the growing buy Canadian sentiment. “Right now, with the pro-Canadiana, people want to support that,” she said. “I think that’s probably going to be one of the best assets that (the Bay) has.” Its housewares brand Gluckstein, a partnership with interior designer Brian Gluckstein, as well as apparel line Hudson North and its Distinctly Home bed and bath products may also be of interest to buyers. “Everything has a price,” said Bou- tet. “There’ll be liquidators that’ll be coming in and probably picking up some inventory in volume to get a spe- cial deal, but will they continue that brand afterwards? It’s going to be a real challenge.” Anyone wanting such assets from the Bay has until April 7 to express an interest through a process separate from the lease monetization efforts. If several competing bids come in, court documents show the company will hold auctions around May 16 and the winner will be expected to seek court approval by May 30. Hudson’s Bay hasn’t said what it is looking for in potential buyers, nor how much it wants to fetch. If the Zellers brand sells, Boutet im- agines it won’t be for much because the subsidiary lacks the success it had decades ago. Zellers dates to the 1920s but Hudson’s Bay purchased a majority stake in it in 1978. It shut down most Zellers stores by 2013, but Hudson’s Bay revived the chain in 2022 through shops within Bay stores that mostly sold goods from Aus- tralian brand Anko. Plush versions of its teddy bear mascot Zeddy were also on offer. — The Canadian Press TARA DESCHAMPS Shopify takes steps to pull in billions from passive funds SHOPIFY Inc. is making moves that could allow it to enter major stock in- dexes, which would direct a flood of investor money into shares of the Can- adian e-commerce platform. The Ottawa-founded company is set to transfer its U.S.-listed shares from the New York Stock Exchange to start trading on the Nasdaq Global Select Market from March 31. The move could pave the way for a spot in the tech-heavy Nasdaq 100 Index, which is designed to track the performance of the hundred largest Nasdaq-listed non-financial firms. “Being included in that index would equate to more buying power for a stock,” said Matthew Maley, chief mar- ket strategist at Miller Tabak + Co, citing inflows into funds tracking the Nasdaq 100 in recent years. Shopify, which has a larger mar- ket capitalization than all but 24 Nasdaq-listed stocks, has risen 16 per cent — more than the broader index — since announcing last week it would transfer its U.S.-listed shares to the marketplace. Even after Shopify moves to the Nasdaq, it will continue to have a dual listing on the Toronto Stock Ex- change. Size, and a listing on the exchange, are the main factors that determine whether a company is added to the Nasdaq 100, but there is no certainty on whether and when Shopify will make it in. Representatives for Nasdaq and Shopify declined to comment on the po- tential addition to the index. Inclusion in benchmarks is becom- ing more important for companies in a world increasingly dominated by passively-managed investment funds. These products — including mutual funds and exchange traded funds (ETFs) — are required to buy the shares of member companies to reflect the index’s composition. Bloomberg Intelligence estimates that 21 per cent of the shares of the average publicly-listed U.S. stock are owned by passive funds — more than triple what it was in 2013. And products tied to the Nasdaq 100 control hundreds of billions of dollars. “In large part there’s some pre- heating the inclusion and the benefits to be had by these companies, but in the case of names that are already broadly recognized, the impact is diminished,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott. Joining an index can also mean that a company’s stock returns are more closely tied to the performance of the broader market over time. “It’s a two-way street,” Maley noted. “Once the stock has become part of a big index/ETF, the selling can become bigger during a bear market.” In recent years, Shopify has jockeyed with Royal Bank of Canada, which is only listed in Toronto, for the title of the largest Canadian company. Last month, Shopify surprised in- vestors by filing a domestic issuer 10-K instead of the foreign issuer 40-F form it has submitted in the past to the U.S. Securities and Exchange Commission. The new filing mentions New York as a “principal executive office” alongside its Canadian address. That led some analysts to conclude Shopify might be gearing up for an official domicile change that could set the scene for S&P 500 membership. Shopify has made over 60 per cent of its revenue in the U.S. every year since at least 2012. Its home country accounted for less than six per cent of sales in 2024. The company’s decision plays into Canadian angst about the flows of goods and investments into and out of the U.S. as President Donald Trump pursues tariffs against Canada and threatens to turn it into the 51st U.S. state. Even if Shopify changes its legal domicile, it could remain in the S&P/ TSX Composite Index for Toronto-list- ed stocks. A few days after the filing mentioning Shopify’s New York pres- ence, the S&P Dow Jones Indices pro- posed changes to its eligibility criteria that would allow companies that aren’t domiciled in Canada to remain part of the Canadian index. — Bloomberg News SUBRAT PATNAIK AND CURTIS HEINZL Winnipeg business TV content delivery firm Taiv acquires potential Ontario rival Local Reach ‘Our mission and goals are aligned’ A WINNIPEG advertising technol- ogy company is one step closer to launching its product in Can- ada after acquiring a startup based in Kingston, Ont. Taiv Inc. purchased Local Reach in a deal that closed last month. The terms of the deal were not disclosed. Local Reach co-founders Evan Ferreira and Joseph Liao, who created the startup while studying at Queen’s University in Kingston, will move to Winnipeg and join Taiv’s staff. Taiv acquired some of the startup’s tech as part of the cash-and-stock transaction. It’s Taiv’s first acquisition and a big milestone for the six-year-old company, according to co-founder and CEO Noah Palansky. “Making an acquisition is sort of a sig- nal to the broader market that we’re go- ing to stick around and do this and scale it up to a pretty meaningful size, which has always been our goal,” he said. Ferreira added he is excited about the deal. “It truly does feel that our mission and goals are aligned and we’re accel- erating this tech to help every restau- rant and bar in the world,” he said. Founded in 2018 by Palansky, chief technology officer Jordan Davis and chief business officer Avi Stoller, Taiv wants to rebuild the way TV is shown in businesses. The company aims to show the best content and ads for any environment by offering a small box that connects to clients’ TVs and automatically switch- es between cable, streaming channels, digital signage and trivia. The box uses artificial intelligence to analyze the live video feed and switch sources during commercial breaks or based on the time of day. (The found- ers came up with the name Taiv by inserting AI — artificial intelligence — into the middle of TV.) Taiv provides the box and installation to businesses free of charge. The com- pany makes money by selling ads and shares a portion of the revenue with these businesses. The idea for Taiv was sparked when Palansky and his wife were watching a hockey game at a local bar. When the game cut to commercials, the first ad promoted a competing national chain. He, Davis and Stoller figured ads for in-house drink specials, upcoming events and amenities customers might not be aware of would be more appro- priate. “That was kind of the core idea for us: just giving these business owners con- trol over the ads that get shown within their four walls,” Palansky said. Ferreira and Liao stumbled onto the same idea last year, also while watch- ing a hockey game in a bar. During the commercial break, an ad for a funeral home came on TV. “I wouldn’t say it killed the vibe of the bar, but it certainly didn’t add to it,” Ferreira recalled. Within a couple weeks, the duo cre- ated a device to optimize TV content and found their first customer, a bar in Mississauga, Ont. With that, Local Reach was born. Soon, the company had installed devices in additional bars across Ontario. When Ferreira searched the internet to see if similar companies existed, he came across Taiv. Since Local Reach was focused on Canada and Taiv was only available in the United States, he figured there might be an opportunity to collabor- ate. He sent Palansky an email with a cheeky subject line that said something like, “I love your business so much I’ve decided to copy it.” The companies started talking and realized since Taiv had plans to expand into Canada, collaboration didn’t make sense since they would eventually be competitors. An acquisition, however, appealed to both parties. More than 2,000 businesses in 13 U.S. cities use Taiv’s device, Palansky said, and the company is preparing to launch in three more cities — San Diego, Los Angeles and Philadelphia — in the com- ing weeks. The company will expand into Can- ada when it launches in Winnipeg in July. More Canadian cities will follow in 2026. The company employs around 45 people. Palansky expects to hire up to 15 more by the end of June, plus 20 more in the new year. He’s also looking for a new office, as the company has outgrown its current 5,000-square-foot Exchange District headquarters. Taiv has raised “a significant amount of money,” Palansky said, primarily from venture capital funds in the United States. He declined to disclose the com- pany’s annual revenue, but said it grew by more than 400 per cent in 2024. People have encouraged Palansky and his partners to move the company to a larger centre, but they’re commit- ted to staying in Winnipeg. Palansky hopes the city becomes a hub for more startups. “This should be a place where people are opening up offices in the tech indus- try,” he said. “It’s just something I’m really passionate about.” aaron.epp@freepress.mb.ca AARON EPP JOHN WOODS / FREE PRESS Taiv co-founders Noah Palansky (right) and Jordan Davis in the company’s Winnipeg office. Taiv uses AI to customize in-house advertising on televisions in bars and restaurants. Couche-Tard understates potential U.S. antitrust risk: 7-Eleven owner MONTREAL — The Japanese parent company of 7-Eleven says Alimentation Couche-Tard Inc. is understating the antitrust risk related to its takeover of- fer for the company. In a pair of documents, Seven & i Holdings Co. Ltd. says the proposal is a transformational cross-border acqui- sition involving significant regulatory hurdles unlike other deals done by the Quebec-based convenience store oper- ator. The Japanese company says it is working with Couche-Tard to evaluate potential divestitures to increase the likelihood of satisfying U.S. antitrust regulators and any potential court chal- lenge. However, it says it will not enter into a transaction with no clear path to closing that could leave the company in a “value destructive limbo” for multiple years. “We have been insistent on ensuring a clear path to antitrust regulatory ap- proval as a first step for one reason: a deal that doesn’t close is not a deal, and it will destroy shareholder value,” Sev- en & i said in a statement. Couche-Tard said earlier this month it believes there is a clear path to regu- latory approval in the U.S. and it has a successful track record of working with U.S. and other regulators to secure approvals of transactions. “We have reiterated several times over the past few months that we intend to be friendly and persistent in pursu- ing a transaction, which we believe is in the best interest of all stakeholders,” Couche-Tard said. In October, Seven & i said it received a revised non-binding proposal from Couche-Tard media reports suggested was valued at US$47 billion, about 22 per cent higher than an offer it made in August. — The Canadian Press ;