Richard Baker’s Latest Retail Fiasco

Richard Baker once said he was not really a retailer. He continues to prove that almost every day.

Last week his Hudson’s Bay Co., the iconic Canadian brand that is generally regarded as the oldest retailer in North America, filed for the Canadian equivalent of Chapter 11 and according to reports could end up closing at least half of its 80 locations. Baker will probably be gone from any HBC ownership position as bankruptcies, at least on this side of the border, usually mean the current owners cede their position and new people take over.

While that could be the best thing to happen to HBC, it’s quite possible that it will be too little too late and the retailer will join the ever-lengthening list of failures on Baker’s watch. Every businessperson has things that don’t work out but remember what Alice Kramden said to her husband Ralph on the Honeymooners. When he told her about his latest idea and she recounted the number of ones that failed, he said, “Well, nobody’s perfect.” Alice responded, “You are, you’re always wrong.”

Baker’s track record in the retail business is little better than Ralph’s. Let’s see, one of his first deals was to buy Fortunoff, the New York metro area home and jewelry operation much beloved by its customers. He tanked it pretty quickly.

Then he bought Lord & Taylor after the Federated-May Co. merger for a little over a billion dollars. About a decade later, after the once-glorious chain continued to struggle he sold it for about $100 million, which if you’re doing the math is less than 10 percent of what he paid for it. Not too long after, it went out of business although Baker says he made his money by selling the Fifth Avenue flagship. Maybe, but the fact remains that the retail business was worthless after he was done with it.

Two years after buying L&T he bought Hudson’s Bay and was now a royal governor…or some convoluted title like that. I believe he has invested about 47 loons into the business in the years since.

In 2013 he bought Saks Fifth Avenue, which had struggled for years under a variety of ownerships and had never really been able to get its upscale shit together in the better sector of the marketplace. Baker continued the tradition but brought his own brand of ineptitude to the brand. He split in-store and online into separate entities and, yes, made a killing in the process. He also made a killing to the idea of running the businesses in unison. When he tried the same thing at HBC he ended up having to put the two parts back together, proving the mathematical equation that one plus one equals one-and-maybe-a-half in the process.

The list goes on. He bought Gilt, the online site that was a flash-sale darling. He unloaded it pretty quickly. Then there was the move to buy a chunk of European department store chain Kaufhof with grand plans for a global department store empire. If you blinked you missed how quickly that was disposed of.

But wait, there’s more. Urban Outfitters was a home specialty chain he got in the HBC deal but that was closed. Saks Off Fifth, the outlet unit, was scaled back when every other off-pricer was booming and expanding.

And just a few months ago, after splitting Saks and HBC into separate entities — the easier to crash-and-burn the Canadian piece of the deal — he bought Neiman Marcus. It took about three minutes for him to announce they were closing the downtown Dallas flagship as well as the separate buying offices for the Texas brand. He ended up with egg and Canadian bacon on his face when the locals there came up with a workaround to address the supposed reason for its closing but then Saks said, “no matter, we’re closing it anyway. So there.” Don’t be surprised to see more Neiman closings, a few Saks locations getting the ax too.  And, oh, Bergdorf Goodman — which came along in the NM purchase — clearly doesn’t have a place on Baker’s dance card when its New York City real estate is right on Billionaire’s Row, a location Baker can no doubt feel right at home in.

Saks, by the way, is believed to be doing pretty miserably, at least from the way it pays many of its vendors, which is essentially on net-never terms. If the real estate market was better, you’ve got to think Baker would be putting “Coming Soon: Luxury Condominiums and Office Buildings” signs on many of its existing properties.

Maybe my math is wrong but I’m having a hard time coming up with any marks to put on the success side of Baker’s retail scorecard. Ralph Kramden’s got nothing on him.

Oh, there is one thing he’s right about: he’s no retailer.