Hudson's Bay benefits from Target exit; costs pinch results
By Solarina Ho
TORONTO (Reuters) - Target Corp's (TGT.N: Quote) exit from Canada has helped Hudson's Bay Co HBC.TO pick up Canadian market share, HBC executives said on Wednesday as the department store operator reported higher quarterly sales but a bigger loss.
HBC said sales at its upscale Saks Fifth Avenue stores in the United States were hit in its first quarter, ended May 2, as a strong U.S. dollar deterred foreign customers.
Higher costs also contributed to the loss with Toronto-based HBC making heavy investments in e-commerce and technology, as well as in preparing for next year's launch of its first Saks stores in Canada.
The company, founded in 1670, said overall same-store sales rose 2.7 percent on a constant currency basis, with sales up 4.9 percent at its department store group, which includes Hudson's Bay and Home Outfitters stores in Canada and Lord & Taylor stores in the United States.
Comparable sales at Saks rose only 0.6 percent, while those at OFF 5th outlets were up 10.3 percent.
Overall online sales jumped 37.2 percent.
"Home Outfitters and Hudson's Bay are both reaping the rewards, or taking advantage, of the exit of Target and the continued erosion that you're seeing at Sears," Chairman Richard Baker said in an interview.
While the strong U.S. dollar hurt the Saks chain, Baker said it benefited Canadian operations, which make up about a third of revenue. Continued...