Hudson's Bay loss narrows as Saks helps it nearly double sales
By Solarina Ho
TORONTO (Reuters) - The purchase of upscale U.S. retailer Saks Inc helped Canadian department store operator Hudson's Bay Co (HBC.TO: Quote) nearly double retail sales and post a smaller quarterly loss on Tuesday.
While its earnings per share were slightly below expectations, Hudson's Bay stock rebounded from early losses to rise 2.1 percent to C$23.99 in Toronto. The stock has taken much of its recent direction from the retailer's moves to extract greater value from its real estate portfolio.
The shares hit a record high in November after the company took a $1.25 billion, 20-year mortgage on its flagship Saks Fifth Avenue store in New York. The property was appraised at C$4.1 billion ($3.59 billion), well above the $2.4 billion that Hudson's Bay, a centuries-old company with roots in the fur trade, paid to buy all of Saks last year.
"This transaction is just one part of our comprehensive real estate strategy," Chief Executive Richard Baker said on a conference call, adding the company will provide further details in the spring.
For the third quarter ended Nov. 1, same-store sales at its department store group, which includes the Hudson's Bay chain in Canada and its U.S.-based Lord & Taylor chain, rose 1.7 percent.
Lord & Taylor's performance showed improvements but continued to be a drag, executives said.
Comparable sales at Saks Off 5th outlets jumped 19.2 percent, while those at Saks Fifth Avenue stores increased 1 percent.
Online sales hit C$228 million, which included a combined 73 percent surge at Hudson's Bay and Lord & Taylor. Continued...