Moody’s cuts Hudson's Bay, facility to B3

Moody's Investors Service said it downgraded all ratings of Hudson's Bay Co., including the corporate family rating to B3 from B2, probability of default rating to B3-PD from B2-PD and senior secured credit facility to B3 from B2.

The speculative grade liquidity rating was affirmed at SGL-2.

The outlook is stable.

Moody’s said the downgrade reflects its view that the continued secular shift in the U.S. of apparel demand to alternative channels such as off-price and e-commerce is increasing the need for department operators to enhance their level of operational execution and build the technological capabilities required to meet these demands.

"Despite a healthy consumer, HBC's recent results show it has struggled to deliver operating performance in line with its larger well capitalized competitors which has led to increased leverage," Moody's vice president Christina Boni said in a news release.

"Hudson's Bay is taking necessary steps with its transformation plan to empower its operations at the banner level to meet the needs of its customers while streamlining and establishing shared services for the entire organization. HBC has also taken significant steps to reduce debt and increase its liquidity through asset monetization."

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