Hudson’s Bay losses deepen as it says farewell to Europe
But chief executive Helena Foulkes is upbeat, saying she expects ‘long-term success’
Hudson’s Bay Co. sees the planned divestiture of its European operations as an opportunity to focus on strengthening its North American base, anchored by the Saks Fifth Avenue and Hudson’s Bay retail banners, HBC chief executive Helena Foulkes said Wednesday.
“While some actions have required tough decisions, we believe they will help set us up for long-term success,” Foulkes said in a conference call with analysts.
Foulkes spoke after the Toronto-based company released its second-quarter results, which included higher losses and lower revenue from continuing operations.
“We’re beginning to see improvement in our North American business and I believe we have a real opportunity to drive performance and unlock shareholder value.”
The bright spots, from HBC’s perspective, included stronger sales at its Saks luxury department chain, which has most of its stores in the United States plus a few in Canada, and improved profit margins throughout the business.
But comparable-store sales at Hudson’s Bay — its main banner in Canada — were down slightly and its Saks OFF Fifth chain’s comparable sales in the United States and Canada were down 7.6 per cent, HBC officials said. “In Canada, Hudson’s Bay has a solid foundation to build upon the growth seen over the last two years,” Foulkes said.
“The team is diligently working to take advantage of Hudson’s Bay’s strong position as the only true national department store in the market,” Foulkes said.
HBC is slightly head of its esti- mates of winning about $100 million of annual revenue that would have gone to its rival Sears Canada, which closed its last locations early this year.
However, Foulkes said there’s room for improvement at Hudson’s Bay — particularly in terms of combining its in-store and digital sales channels. “I think overall, not just at Hudson’s Bay, we made some mistakes late last year with digital.
“We took a lot of costs out of that business but we really didn’t look at the digital end-to-end experience from a customer perspective.”
Chief financial officer Edward Record said Hudson’s Bay will likely get an outsized portion of HBC’s total capital spending. That’s expected to be between $375 million and $425 million this financial year, down from $599 million last year, Record said.