Saks owner Hudson's Bay to cut 2,000 jobs as loss widens more than expected
By Solarina Ho
TORONTO (Reuters) - Saks Fifth Avenue owner Hudson's Bay Co (HBC.TO: Quote) said on Thursday it would cut about 2,000 jobs across North America in a major restructuring effort as it reported a wider-than-expected first-quarter loss.
The Canadian department store operator, which also posted a steeper-than-expected drop in quarterly retail sales, said the move would help the company save more than C$350 million ($259 million) annually.
Hudson's Bay, also known as HBC, and other large retailers are struggling to reinvent themselves amid an industrywide upheaval, blamed in part on changing shopping trends that have seen shoppers migrate online.
"With all the changes taking place in the industry, we know we need to be a leaner organization, but we also want to make sure that we're a better one," Chief Executive Jerry Storch said in an interview, adding that no store closures are planned as part of the announcement.
HBC said the cuts, about 3 percent of the company's more than 66,000 employees, were decided after a six-month review of ways to slash costs and streamline its operations. Storch declined to give details on where the cuts would happen.
"Given the context of the highly promotional retail environment, we are skeptical that the transformational plan will meet the targeted savings estimates without further eroding revenue," said Canaccord Genuity analyst, Derek Dley, in a research note.
U.S. department store operator Nordstrom Inc (JWN.N: Quote) said earlier on Thursday that members of the Nordstrom family were considering taking the company private and selling debt so they could reshape its operations.
"As far as whether we would consider that, I can't comment on that either. That's really up to our shareholders," Storch told Reuters, in response to whether HBC would consider a similar move. Continued...