Report Amazon readying delivery service sends ‘shivers down the spines’ of UPS, FedEx

Shares of FedEx and UPS slipped following a media report that Amazon.com is readying its own air delivery service, meaning not only that the companies may see diminished business from a massive client, but that they might have to compete against it.

Rumours have swirled for some time that Amazon has explored bringing some of its delivery services in house to take control of the process and avoid delays often seen around the holidays.

UPS was caught off-guard by the crush of online shopping leading up to the recent holiday season and said this month that it must spend a chunk of its tax-cut savings to improve its package-delivery network.

On Friday The Wall Street Journal, citing anonymous sources, said that Amazon is planning a new service called “Shipping With Amazon” that will allow it to pick up packages from businesses and deliver them to consumers. The service is expected to start in Los Angeles in coming weeks, before it is rolled out more broadly as soon as this year.

Neil Saunders, the managing director of GlobalData Retail, said Amazon’s entry into the delivery business would “send shivers down the spines of the traditional delivery companies.”

“The danger for the traditional delivery firms is twofold. Firstly, they are likely to lose business from Amazon; this will be slow at first but will accelerate as Amazon rolls out more of its own delivery services,” Saunders wrote. “Secondly, if Amazon starts offering delivery to businesses, it will likely do this at a reduced rate.”

News that Amazon may kick off its own delivery service comes one day after the Seattle company announced two-hour food delivery for Prime members from Whole Foods, which the Seattle company acquired for nearly $14 billion.

Amazon has been edging into the delivery business for some time. In August 2016, the company unveiled its first branded cargo plane, one of 40 jetliners that were expected to make up its own air transportation network.

Shares of United Parcel Service Inc. and FedEx Corp. slid between 1 per cent and 2 per cent at the opening bell, after a more severe sell-off in premarket trading.

Why Canada Goose is taking a market beating despite record earnings

TORONTO — A double-digit jump in third-quarter sales and earnings didn’t prevent Canada Goose Holdings Inc. from taking a double-digit dive on the markets Thursday when the company maintained its forecast for 2018 rather than increasing it.

Canada Goose chief executive Dani Reiss is quite content to expand the luxury parka maker’s business methodically, he made clear Thursday, despite an overt investor desire for rapid and aggressive sales growth.

The Toronto-based manufacturer and retailer, whose fur-trimmed coats sell for as much as $1,495, is in no rush to restock shelves when some of its designs have sold out in store and online, Reiss told analysts on a conference call to discuss results for the period ended Dec. 31.

Sellouts of some of the brand’s sizes and styles have been happening with greater regularity this winter season due to colder than average temperatures in parts of North America in December and thereafter. And Canada Goose, which began opening retail stores in 2016, frequently has had customer lineups outside of its locations this year during cold snaps in Toronto, New York and Chicago.

“I think we think about this differently than many companies,” said Reiss, explaining the company’s belief that selling out of its popular outerwear is a good thing, and indicative of strong demand.

“We are not afraid to be sold out. Being sold out to me, and to our company, is a good thing, and I think it shows lots of demand for our product,” he said. “We are not a commodity product…others (have made themselves so) by ensuring that they are never out of stock, and they are also ensuring that there will come a time when people don’t want to buy their products any more.”

When asked whether the company had certain projections for deliberately keeping stock low, an industry maxim known as the scarcity principle, Reiss said the company performed no such measurements.

Canada Goose stock dropped 15 per cent to $40.55 on the Toronto Stock Exchange by midday Thursday. The shares were still trading at more than 140 per cent above their IPO price last March, however.

The company’s lack of an updated forecast and the appointment of new chief financial officer Jonathan Sinclair likely pulled down the shares, said RBC Capital Markets analyst Brian Tunick in a note to clients.

“Given the run in the shares, no update to the annual outlook, and a new CFO announcement, the shares could take a breather here.”

Sinclair, CFO at luxury shoe brand Jimmy Choo, will replace John Black when he retires mid-year, Canada Goose said.

Camilio Lyon of Canaccord Genuity believes Canada Goose is managing its business prudently in the face of outsized consumer demand.

“This perpetuates the longevity of the brand by keeping the scarcity factor high,” Lyon wrote in a note to clients Thursday.

“Clearly, Canada Goose left sales on the table, an outcome with which the company is content, even at the expense of near-term volatility to the stock.”

The company’s net income was $62.9 million, or 56 cents per share in quarter, up from $39.1 million (38 cents), a year ago.

On an adjusted basis, Canada Goose earned 58 cents per share, beating average analyst estimates of 48 cents from Thomson Reuters.

Revenue soared 27 per cent to $265.8 million, while the company’s direct-to-consumer revenue almost doubled year over year to $131.6 million as the company continued to expand its e-commerce sites and proprietary retail stores.

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Your changing eating habits are causing a ‘bloodbath’ among food manufacturers that will only get worse

TORONTO — The Campbell Soup can is an iconic cultural artifact, immortalized alongside Elvis and Marilyn Monroe by pop artist Andy Warhol in the 1960s, and, in one form or another, a pantry staple for almost 150 years. But its celebrated history isn’t helping to prop up sales these days.

The planned shutdown of Campbell Co. of Canada’s Toronto-area factory over the next 18 months, resulting in a loss of 380 manufacturing jobs, illustrates the ongoing erosion of the country’s food processing sector, which has lost about 30,000 manufacturing jobs during the past decade, according to industry estimates.

Closing the facility makes a lot of business sense since, like many food manufacturing plants in Canada, it was a smaller, older branch plant owned by a foreign company, and, as such, likely reached the chopping block before a more modern facility elsewhere. Campbell’s factories in Paris, Tex., Maxton, N.C., and Napoleon, Ohio, will now fulfill its production.

But a bigger reason for the sector’s decline is a wholesale change in the way people shop, cook and eat that the global food-processing giants are scrambling to address.

About 60 to 65 per cent of the soups produced at Campbell’s Toronto factory are canned, with the remainder in sterile packaged cartons. But the only kind of soup that has had any sales growth over the past five years, according to market research, is the fresh variety, which accounts for a tiny portion of the overall soup market, sold chilled on grocery store cooler shelves.

People are eating less frequently at home than they used to and are choosing more fresh, unprocessed items than they did in the past, regardless of where they eat.

Everyone from fast-food giants to grocery stores is trying to cash in on the trend: Starbucks Corp. sells sandwiches and protein-rich salads, and grocer Metro Inc. bought a meal-kit company last year even though it also sells all the discrete items customers need to make their own meals.

Those trends have the 149-year-old Campbell Soup Co. trying to innovate to keep sales from slipping down the drain.

“One factor is the consistent decline of the consumption of canned soup — in Canada, it has declined 30 per cent in the last 10 years,” said Ana Dominguez, president of Campbell Canada.

The Campbell Soup manufacturing plant in Toronto will be closing in the next 18 months taking 380 jobs with it.

“That decline is happening in both Canada and the U.S. We had to make the difficult decision to consolidate. The Toronto plant was the oldest and the smallest. We produce more soup than we can actually sell, so we have excess capacity.”

Overall soup sales in Canada declined to $699.9 million in 2017 from $709.4 million in 2012, according to data from market researcher Euromonitor. So-called shelf stable soups accounted for $559 million of those sales, while chilled fresh soups, growing at a rate of about six per cent a year for the past five years, accounted for $15 million.

Campbell, with a market share of 59.3 per cent between its Campbell and Habitant soup lines in Canada, Campbell would take the lion’s share of the hit in packaged sales. The next closest rival is Unilever-owned Knorr, which has a market share of 9.1 per cent, according to Euromonitor.

But it’s not just canned soup that has fallen out of favour with consumers. A push to eat more fresh foods and reduce our collective dietary intake of salt, trans fats and sugar has hit many packaged goods makers hard, forcing the grocery industry to change its definition of “convenient” food.

Back around the time of the First World War, salt intake wasn’t top of mind when the use of canned food proliferated and became more than just a quick food source. Aside from not spoiling — or, at least, not for a very long time — canned food was easy to transport and was a reliable option when fresh food ran short.

Canned condensed soups were a ubiquitous presence in mass-market recipe books by the 1940s and 50s and continued as a popular kitchen staple for decades, used in soufflés, casseroles, pot pies and side dishes.

But consumer perceptions about many packaged foods including soup began to emerge in the 1990s, corresponding with the rise of Martha Stewart, who demanded the authenticity of good old-fashioned elbow grease in her always-from-scratch recipes. Just a decade later, TV celebrity cook Rachel Ray was widely scorned by the chattering classes for using canned goods as short cuts in her recipes.

Homemaking maven and CEO Martha Stewart influenced attitudes toward food when she urged fans to go back to the basics when cooking. Star chef Rachel Ray was excoriated recently for using canned foods in her recipes.

Nowadays, eating foods that were once viewed as convenient and tasty — Tang drink crystals, margarine, crackers, soda pop, many dry breakfast cereals — is actively discouraged by dieticians, who encourage the consumption of fresh food and home-cooked meals, using whole grains and raw ingredients.

That trend has had a cascading effect on the manufacturers of those products.

Manufacturing sales of breakfast cereal in Canada fell to $488 million in 2016 from $1.57 billion in 2012, according to Guelph, Ont.-based food industry analyst Kevin Grier, citing Statistics Canada data. Sugar and confectionary manufacturing sales declined to $3.7 billion from $4.6 billion during the same period.

“That’s due to a combination of plant closures — cereals declined dramatically due to the closure of the Kellogg plant in 2013 — and the overall business shrinking, in response to industry trends,” Grier said.

“Demand (for processed food) is not what it used to be. The centre of the grocery store (where packaged goods tend to reside) is getting smaller, and that is probably going to continue.”

Indeed, grocers are shifting space to meet consumers’ increasing demands for fresh food and fully cooked meals.

“We offer ready-to-eat, ready-to-heat meals in all of our stores,” Metro chief executive Eric La Fleche said on the company’s first-quarter conference call in late January. “Certain stores have a more expanded offer. It’s a growing business for us that we are putting more focus on. The quality for us is improving. We think we can get more share of stomach than we have currently.”

Campbell Canada’s Dominguez acknowledges the shift.

“Consumers’ preferences have definitely changed, and our job and our commitment is to change with them and adapt to where they are going,” she said. “Consumers are snacking more, less often having three square meals a day, and they are looking for healthy foods, better-for-you foods and, obviously, the taste profile of the foods is evolving.”

Sales of foods such as packaged cereals are taking a hit as dieticians urge consumers to avoid them becuase of their high sugar content.

Sylvain Charlebois, dean of management at Dalhousie University in Halifax, said the result of all this healthy eating is creating a “bloodbath” among foreign-owned mass food manufacturers in Canada, citing Campbell’s Toronto plant closure and the planned closure in May of the Dr. Oetker frozen pizza factory in Grand Falls, N.B.

As a result, Charlebois said is a decline in national brands: those boxed, canned and jarred goods with labels such as Nabisco, Kellogg and Chef Boyardee.

“Most national brands are slaves to their past branding strategies,” he said.

Those brands, he added, are finding it hard to shed the ingredients that dieticians see as problematic and they have compounded their business problems by participating in too many deep markdowns with grocery chains.

“Every time I walk into a grocery store I see national brands that are on sale cheaper than store brands. It’s amazing,” Charlebois said. “They are trying to protect their market share as much as possible, and price doesn’t matter anymore. They are just trying to make sure that the products are moving.”

Campbell, Dominguez said, is changing and diversifying its food portfolio and the types of recipes it provides to consumers, while it also grows sales in areas such as chicken and beef broth, which are used as a base in many recipes.

The company will also open a new food innovation food centre in the Toronto area that will employ about 200 people after the existing factory closes, she added. That centre will test and develop new products specific to the Canadian market, even though future production will be fulfilled in the U.S.

More innovation and development within Canada is needed to spur growth in its food processing industry, Charlebois said, adding that a handful of new incubator programs for the agri-tech sector could help the sector grow again.

But even if that happens, packaged food manufacturers will still have to convince the major grocers to give them back some shelf space.

“Metro, Sobeys and Loblaw are all trying to increase the size of the periphery (of the supermarket),” he said, the area that is home to fresh baked goods, deli foods, meats, dairy products and, more recently, ready-to-eat meals. “They are taking more and more space. They are still stuck with some of these national brands to a degree, and want to sell some of them. But to attract the attention of consumers is becoming more challenging.”

Financial Post

hshaw@nationalpost.com

Twitter.com/HollieKShaw

 

Lululemon’s surprise split with CEO said to involve employee relationship

Lululemon Athletica Inc.’s reasons for parting ways with Chief Executive Officer Laurent Potdevin included a relationship that he had with a subordinate, according to people familiar with the situation.

The employee, who worked as a designer at the yogawear brand, resigned in 2014 but later came back as a contractor, said the people, who asked not to be identified because the matter isn’t public. Her contract wasn’t renewed in 2018, they said. CNBC previously reported on Potdevin’s relationship, saying it was an issue that contributed to the executive’s abrupt departure.

The incident was just a part of the misconduct allegations that led to Potdevin’s resignation, the people said. But it offers a window into Lululemon’s decision-making process ahead of the surprise split with its chief after a four-year tenure. When the apparel company announced the move earlier this week, it cited misbehavior by the 50-year-old Potdevin but didn’t offer specifics.

“Lululemon expects all employees to exemplify the highest levels of integrity and respect for one another,” the Vancouver-based company said on Monday. “Mr. Potdevin fell short of these standards of conduct.”

The behavior didn’t have anything to do with the company’s finances or operations, people familiar with the situation said earlier this week. The misconduct spanned a range of incidents and involved multiple individuals, according to the people. Lululemon didn’t provide detail because it wanted to protect the privacy of those involved, they said.

Potdevin couldn’t immediately be reached for comment.

Investors have largely taken the shake-up in stride. Though the shares briefly tumbled in late trading on Monday, they gained on Tuesday and Wednesday. Former Gap Inc. CEO Glenn Murphy, who serves as Lululemon’s executive chairman, is helping manage the business while it seeks a new leader. A team of other executives, such as Chief Operating Officer Stuart Haselden, also are taking on additional duties.

“We’re comforted by the fact that the day-to-day operations of the business will continue to be managed by current business leaders, suggesting product and operational continuity,” RBC Capital Markets LLC analyst Brian Tunick said in a note this week. “That said, we’re keeping an eye on any reputational risk to the brand on any further headlines related to Potdevin’s departure.”

Bloomberg.com

Seven things small businesses should learn about retailing today, from the pros

You wouldn’t know it by the headlines or by wandering into a dusty flea market that used to be a Zellers or Sears store, but retail is on a roll.

According to Statistics Canada, retail sales in the first 11 months of 2017 were up seven per cent over the previous year. In the U.S., the gain was 5.5 per cent.

But, of course, the devil is in the details. (Remember your first boss telling you “Retail is detail”?) In Canada, online retail grew 36 per cent in the first 11 months of 2017. But e-commerce accounted for just 2.6 per cent of all retail sales last year, which says old-school businesses still have time to get it right.

Each January, the National Federation of Retailers holds a colossal three-day convention in New York City. I attended “Retail’s Big Show” this year to learn how entrepreneurs can keep pace in a market changing so fast. On my way into the Jacob Javits Convention Center, I heard the fundamental challenge laid out starkly when one delegate told another, “I do all my shopping online, too!”

Here are seven key insights from the Big Show that should register with any entrepreneur trying to sell anything to anybody.

It’s all about relationships. Online or off, customers aren’t your target, they’re your community. Look for ways to deepen your relationships, even if it means giving before getting.

Marti Eulberg, director of brand management with Charlotte, N.C.-based Sonic Automotive, fifth-largest automobile retailer in the U.S., put it best: “We want to get away from being transactional and build a relationship.” Today, its 110 dealerships offer guests free wi-fi. And customers get an RFID chip in their car that entitles them to a free car wash whenever they return to the lot. “Everyone loves it,” says Eulberg. “It brings them back again and again.”

Put your best foot forward online. According to Dwight Moore, senior director of retail solutions for Salesforce Industries, “85 per cent of shopping journeys start digitally. Shoppers are coming into your store with greater knowledge and greater intent.” This is a terrific challenge to have. It gives you the chance to differentiate your business through creativity, service, staff training and customer insight. “Stores,” Moore says, “are becoming experience centres and fulfilment centres” for consumers who know what they want.

Mobile matters most. As you develop your online strategy, the big play is mobile – especially apps. According to a keynote by Jennifer Bailey, vice-president of Internet Services at Apple Pay, “Mobile is now growing four times faster than desktop commerce, and 10 times faster than general retail.” Plus, she says, “80 per cent of the time spent on mobile devices is spent within apps.”

Bailey cited several examples of major retailers winning with creative apps. Home-products retailer Wayfair uses augmented reality to let prospects see how a product will look in their homes. Another Wayfair app lets you find out if they offer what you want by uploading a photo of the type of item you’re looking for.

Don’t groan at the cost of differentiating your brand – marvel at the new opportunities awaiting you in adjacent services. Blaine Hurst, CEO of St. Louis, Mo.-based Panera Bread Co., says his company’s “Panera 2.0” project has helped boost digital sales to US$1.25 billion, or nearly 30 per cent of total revenue. By updating its catering business with an app that includes loyalty rewards and a “Rapid Pickup” service, Hurst says Panera has become “the largest caterer in the United States, with sales of more than US$500 million.”

Moreover, “75 per cent of digital orders now come on apps,” Hurst adds. “The amount of data we can mine from that is huge!”

Use new tech to empower and delight consumers. Emily Kulp, chief marketing officer of Keds Shoes, described a fashion incubator she had worked on that installed kiosks in its change rooms. They enabled clothing shoppers to signal a sales associate if they needed to try another size up or down, rather than making them get dressed again to go fetch it. And if the shopper liked the pants they tried on, the kiosk let them pay instantly, so they could walk out in their new jeans.

Use technology to personalize your marketing. According to Salesforce’s Moore, 65 per cent of all product searches start on Amazon. How can you sell to people who check Amazon first? “Present them targeted ads in the media they’re consuming,” says Moore. That means mining your customer data to learn more about their demographics, preferences and shopping habits, then using targeted online ads to reach not just your own customers – but other consumers who share their characteristics.

You can also use digital intelligence to fuel personalized recommendations – the part of a website that says “You may also like… .” According to Moore, customers who engage with recommendations drive 30 per cent of online revenues. “Seventy-five percent of shoppers want personalized offers,” says Moore. “They’re saying, ‘Surprise and delight me. Make my life better!’”

Upgrade your values and your culture. While you’re getting to know your customers better, they’re watching you too. Instagram COO Marne Levine says her image-based social channel is fast becoming a platform where consumers and business meet. “Our members want to hear from businesses,” she says. “One-third of the top-rated ‘stories’ [on Instagram] come from businesses.”

But to win consumers’ loyalty, says Levine, you must win their trust. “Customers are looking to understand more about you: your employees, your values and your culture. That all contributes to how they think about your products.”

Rick Spence is a writer, consultant and speaker specializing in entrepreneurship.

rick@rickspence.ca

Twitter.com/RickSpence

Lululemon’s ‘thin’ explanation of CEO’s abrupt departure ‘bordering on inadequate,’ experts say

Shareholder advocates and analysts are calling on Lululemon Athletica for more disclosure surrounding the abrupt departure of its chief executive who “fell short” of the Canadian athleisure company’s conduct standards.

FAIR Canada executive director Frank Allen says Lululemon’s disclosure was “thin” and shareholders and investors are entitled to a full explanation for something of this significance.

The Vancouver-based apparel maker stayed mum today after announcing yesterday that CEO Laurent Potdevin had left the firm and was no longer on its board of directors.

In a filing to the U.S. Securities and Exchange Commission, Lululemon says it will pay Potdevin $5-million over a year and a half in exchange for, among other stipulations, agreeing not to sue.

Corporate governance expert Richard Leblanc says Lululemon’s public statements on the matter are “bordering on inadequate,” leaving shareholders and investors to make inferences.

Canaccord Genuity analyst Camilo Lyon says the Lululemon board has moved quickly to quarantine the fallout, but judging by the company’s specific language in its statement, “we can only assume there were claims of inappropriate behaviour.”

Lululemon’s shocking CEO resignation due to lapse in code of conduct

TORONTO — Lululemon, a brand that based its corporate ethos around personal development and communal fitness classes, shocked the industry late Monday when it announced CEO Laurent Potdevin had resigned for breaching the retailer’s code of conduct.

“Lululemon expects all employees to exemplify the highest levels of integrity and respect for one another, and Mr. Potdevin fell short of these standards of conduct,” said a statement from the retailer announcing Potdevin’s immediate resignation from the board and from his role as CEO, a position he had held for the last four years.

It’s not a cheap exit: in a regulatory filing after markets closed Monday, Lululemon said it had agreed to pay Potdevin payments totalling US$5 million as part of his separation agreement, dated Feb. 2.

The executive’s transgressions were not detailed by the company, but it was clear that the conduct breach was not related to the company’s operations. Lululemon said it has begun a search to replace Potdevin, who was CEO of Toms Shoes and Burton Snowboards before taking up the helm at the Vancouver-based athleticwear company.

“While this was a difficult and considered decision, the board thanks Laurent for his work in strengthening the company and positioning it for the future,” said a statement from Glenn Murphy, who was promoted to executive chairman of Lululemon amid the shakeup, from his prior role as chairman.

“Culture is at the core of Lululemon, and it is the responsibility of leaders to set the right tone in our organization. Protecting the organization’s culture is one of the board’s most important duties.”

Three of the company’s senior executives — Celeste Burgoyne, executive vice-president, Americas; chief operating officer Stuart Haselden; and Sun Choe, senior vice-president of merchandising — will take on added responsibilities in the interim period and report directly to Murphy, a former CEO of both Gap Inc. and Shoppers Drug Mart.

During his tenure, Potdevin vastly expanded the brand’s online business, its technical athletic clothing and its menswear line, finding sales success with the 2015 launch of ABC pants, an “anti-ball crushing” line of stretchy garments. The company anticipates menswear will account for a quarter of its business by the time it hits an estimated US$4 billion in sales by 2020.

In an intemperate year for apparel retailers, Lululemon has had solid sales and its shares have risen 16 per cent over the past year.

“(Potdevin’s) innovative approach and his clear sense of Lululemon’s values and essence is one of the reasons the company has enjoyed continued success, even while other sporting brands struggle to generate growth,” said Neil Saunders, managing director of GlobalData Retail, said in a published comment after the announcement.

“Lululemon owes it to investors and to customers, to be clear about the reasons Mr. Potdevin was made to depart. As a company that prides itself on transparency and openness, we would expect it to have an honest conversation with stakeholders. Failure to do so will likely lead to speculation which could ultimately harm the brand.”

The company also reaffirmed its guidance for its fiscal fourth-quarter and year-end results, due on March 27.

• Email: hshaw@nationalpost.com | Twitter: @HollieKShaw

HBC’s new CEO Helena Foulkes has her work cut out in unforgiving retail sector

TORONTO — Between placating activist investors and developing new ways to grow a veteran business in an increasingly unforgiving sector, new Hudson’s Bay Co. chief executive Helena Foulkes has her work cut out for her.

Foulkes, a former executive with U.S. drugstore giant CVS, will fill the void left at HBC after the abrupt departure last fall of veteran retail executive Jerry Storch, who made a return to his consulting firm after close to three years at the department store retailer’s helm. According to reports, Storch’s vision for the retailer clashed with that of governor and company chairman Richard Baker, who assumed the CEO role on an interim basis after the former CEO’s departure in November.

“HBC has an amazing portfolio of retail banners, valuable real estate and an innovative approach to M&A that give it the ability to win,” Foulkes said in a statement on Monday. “The future of retail will be defined by companies that think creatively about where the consumer and the world are headed.”

She was not available for further comment.

“Helena is a transformational leader who will invigorate the business with a new perspective as we position HBC for the future,” Baker said in a statement. “Throughout her 25 year tenure in retail, she has a proven track record of making bold, strategic choices that, at their core, put the customer first and have proven enormously impactful to business success.”

At No. 12 on Fortune’s 2017 Most Powerful Women list, Foulkes, 53, was most recently executive vice president of CVS Health and president of CVS Pharmacy, in charge of overall retail strategy and operations at 9,700 retail stores, 20 distribution centers and e-commerce sites, as well as merchandising, supply chain, marketing and real estate. Prior to joining CVS in 1992, Foulkes, who has an MBA from Harvard Business School, worked at Goldman, Sachs & Co. and luxury retailer Tiffany & Co.

She was known for boosting the profile of CVS as a proponent of healthy living, spearheading the drive to take tobacco products off its shelves in 2014 and overhauling the retailer’s front-of-store business with an improved selection of beauty products and digital initiatives.

HBC, the owner of Saks Fifth Avenue and Home Outfitters, has seen its shares fall about 11 per cent this year after issuing disappointing third-quarter results in December. It faces continued pressure from shareholder Land and Buildings Investment Management to divest more of its real estate, sell its lagging European department store business or go private. The stock fell 2.6 per cent on the Toronto Stock Exchange to around $10 per share amid a broad downturn in equity markets Monday.

Last week, Land and Buildings founder Jonathan Litt reiterated some of his demands, saying HBC is “flush with cash” to go private after a US$500 million equity investment from Rhone Capital in December, part of a deal that saw HBC sell its Lord & Taylor flagship store in New York to house the head offices of shared office space company WeWork Cos.

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