S&P downgrades Hudson's Bay

Standard & Poor's said it lowered its ratings on Hudson's Bay Co., including the corporate credit rating to BB- from BB, the senior unsecured debt rating to BB- from BB and the subordinated debt rating to B from B+.

The CreditWatch has been revised to negative from developing.

S&P said the downgrade is due to the company's very weak profitability metrics in the context of a very challenging competitive environment and increasing uncertainty as to who will ultimately purchase Hudson's Bay. The company has stated that it is aggressively pursuing a number of alternatives to maximize value for shareholders.

In addition to weak metrics and competitive environment, the ratings reflect continued market share erosion and a heavy reliance on Hudson Bay's financial services for EBIT contribution, the agency said.

These factors are partially offset by the diversification provided by a full-line department store and mass merchant formats and a stable capital structure, S&P said.

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