Shares in Hudson’s Bay Company dropped slightly and then recovered Tuesday following an announcement that it will begin opening stores in the Netherlands next summer.

In all, 17 stores are planned under the Hudson’s Bay banner in the Netherlands and three under the Saks OFF 5 {+T} {+H} {+ } banner, also owned by HBC.

A flagship Hudson’s Bay store is planned in the Rokin area of Amsterdam.

“It’s an exciting moment for all of us at Hudson’s Bay Company and an exciting moment for Canada,” said Richard Baker, governor and chairman of HBC, in an interview on Tuesday.

HBC shares closed at $14.61 up 1 cent Tuesday on the Toronto Stock Exchange after dropping by 20 cents earlier in the day.

The news comes after a week of poor earnings reports from U.S. department stores, including Macy’s, Kohl’s, and Nordstrom, leading to speculation on the future of the department-store model and the malls that house them.

“In the U.S. right now there is a general malaise in the apparel market and luxury market, there is no doubt about that,” said Jerry Storch, HBC’s chief executive officer.

“We believe this is a cyclical factor affecting apparel. This happens from time to time. We’re confident it will come back.”

Last week, HBC reported a comparable-store-sales increase of 2.3 per cent in its department-store division for the first quarter of this year.

The company is scheduled to release full financial results for the quarter after markets close on June 9.

The acquisition of the Galeria Kaufhof department store chain for $3.9 billion in 2015 established HBC’s European headquarters in Cologne, and gave them a network of stores in Germany and Belgium, Baker said.

“Expansion into the Netherlands is a natural extension of our existing presence in Belgium as well as our planned entry into Luxembourg and will complete our presence in all of the Benelux countries,” said Baker.

HBC will be taking over many locations formerly occupied by the bankrupt Dutch department store V&D.

Baker said HBC did not buy the stores from V&D, but has worked out agreements with landlords to renovate some of the vacated properties for Hudson’s Bay stores.

In all, landlords will be funding approximately $450 million in capital investments, Storch said.

“I think it’s a good idea because they are broadening their base and becoming a truly international brand,” said Farla Efros, president, HRC Advisory.

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Baker said their market research showed the Dutch feel a strong affinity for Canada. It dates back to the liberation of the Netherlands by Canadian troops in the Second World War and the birth in Ottawa of a Dutch princess.

“What we found out was that the people of the Netherlands wanted a young, exciting and interesting department store that was theirs, but they also loved Hudson’s Bay and they also loved the idea of a Canadian department store,” said Baker.

“So what we’ve done is, we are opening up a chain of premium department stores in the Netherlands that is similar to the Hudson’s Bay stores, but with a Dutch flavour to them.”

That includes carrying Dutch brands in the stores.

There is unmet demand in the Dutch market for premium department store and off-price segments, Storch said.

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He compared the former V&D stores to “low-end J.C. Penney” stores.

The expansion is expected to create more than 2,500 store jobs, 2,500 construction jobs and 300 million Euros in capital investments, the majority of which will be funded through landlord incentives, according to Olivier Van den Bossche, head of HBC’s European department store business.

HBC has said it plans to spend nearly $1.5 billion on its European properties in the coming years, including renovations to its Galeria Kaufhof department stores.