Hudson's Bay was granted a royal charter in 1670 by the King of England, who gave it a monopoly over the fur trade for all the lands that drained into its namesake -- about 15 percent of North America.
Wow. And people think Wal-Mart has a commanding presence.
Over the last 342 years, the firm morphed into a retailer that Baker this year combined with its south of the border cousin, Lord & Taylor.
Even though so much has changed, the focus on real estate is still there. Baker sniffed out the investment by following the real estate and it proved to have a good nose. He bought Lord & Taylor for $1 billion in 2006 and Hudson's Bay for $1.1 billion in 2008. He turned around and spun off leases for the underperforming Zellers unit for $1.84 billion and now is looking to take Hudson's Bay public, giving it a valuation of as much as $2.55 billion.
Baker's making lots of changes at The Bay, switching out brands and bringing in Topshop, boosting private label, but the heart and soul of the company, as a business, still seems to be the real estate.
In the IPO paperwork, the company boasts: "We have a valuable real estate portfolio which is strategically located in core retail locations across Canada and the eastern and mid-western United States. The company owns or ground leases more than 11 million square feet of prime retail space, including flagship stores in Toronto, Vancouver, Calgary, Montreal, New York, Westchester and Long Island."
In a sense, that real estate means Baker can lose, but can't fail.
The merchandise efforts could fall flat, the branding could be bad -- not that it is -- almost everything could go wrong and the company would continue to be worth something because it has all that real estate.
Look at Dillard's in the U.S. The company was dogged for years by underperformance and pestered by activist investors. But it was able to hold on because the Dillard family, which has control of the business, never gave away the real estate. That value was always there to fall back on.
Saks Inc. executives have likewise pointed to the money tied up in the company's Fifth Avenue flagship when times were hard and have been able to ride out the storm.
This means that Baker and his brand of retailing, however that evolves, are likely here to stay for some time.
That's probably a good thing. The world would be too dull with too few department stores.