Canada’s oldest retailer’s strategy will remain the same whether or not it continues as a public company, Hudson’s Bay Co. chief executive said as the department-store chain  reported another weak sales quarter. This announcement gives chairman Richard Baker ammunition for his contested bid to take the retailer private as shareholders prepare to vote.

“Over the last month, many have asked if we expect our strategy to change,” CEO Helena Foulkes said during a conference call with analysts after the company released its third-quarter financial results.

“In short, the answer is no. Whether we are a public or private company, our strategy remains the same,” said Foulkes, highlighting a commitment to making focused investments designed to drive growth, enhancing customer experience, reducing operating costs, fixing fundamentals and capitalizing on real-estate value.

“These actions are crucial in ensuring we can drive both top- and bottom-line performance over the long term. While this will take time, we’re confident in our journey and our promise is to do everything within our power to deliver on the extraordinary heritage and potential of HBC.”

The comments by Foulkes came as HBC reported its same-store sales, a key retail metric, fell 1.7% for the 13-week period ended Nov. 2.

The takeover has faced increased scrutiny and several roadblocks ahead of the scheduled Dec. 17 meeting where a majority of the company’s minority shareholders must vote in favour in order for it to proceed.

“There is no doubt that we wanted more from our third quarter performance as we were up against our most difficult comparison from a year ago,” she said.

“Strong digital sales, continued cost control and inventory management were not enough to overcome headwinds, softening in the luxury category and the challenge of winning back market share in Canada.”

At Saks Fifth Avenue, the company noted a 2.3% decrease in the quarter compared to a 7.3%  jump in the same quarter the previous year.

Saks OFF 5th, which Hudson’s Bay has tried to turn into a stronger competitor to the likes of Nordstrom Inc.’s Rack, was the lone bright spot, with sales up 4.9%.

At Hudson’s Bay, same-store sales fell 3.9% in the third quarter.

The challenges with these chains “are largely self-inflicted,” said Foulkes. The company continues working at reimagining the customer experience, she said. In the upcoming spring season, Hudson’s Bay will introduce 75 new designers and exit 600 brands, she said, mostly in apparel.

The retailer recorded a lift in digital sales with a 15% bump in the quarter. The company has been focused on fixing fundamentals in this area, said Foulkes, including site speed and streamlining the checkout process, among other things.

Overall, the company reported a third-quarter loss of $226 million or $1.23 per share compared with a $161 million loss or 88 cents per share a year ago.

Revenue totalled $1.84 billion, down from nearly $1.89 billion in the same quarter last year. Meanwhile, retail sales came in at about $1.82 billion for the quarter, down from roughly $1.86 billion in the same quarter the previous year.

On what it called a normalized basis, HBC said it lost $128 million in its latest quarter compared with a comparable loss of $56 million a year ago.

Source: The Star
Source: The Star