Hudson's Bay unveils plan to compete in 'brutal' retail market
By Solarina Ho
TORONTO (Reuters) - Canadian retailer Hudson's Bay Co said on Friday it was streamlining operations across its various department store chains to better compete in what it called a "brutal" market.
The 347-year-old company, known as HBC, announced jobs cuts across North America late on Thursday. It is the latest department store chain to unveil plans to try to address industry-wide turmoil amid intense competition in a saturated market.
A shift in shopping trends to online retailers led by Amazon.com Inc has left many traditional department operators struggling to boost sales and cut costs.
"We know we can do better and we are taking bold decisive action," said Chief Executive Officer Gerald Storch in a conference call, as HBC shares plunged to record lows.
"Rather than chase the rapid industry trends, our transformation plan will reposition HBC to get ahead and stay ahead," he said.
HBC operates Hudson's Bay, Lord & Taylor, Saks Fifth Avenue and other chains. Under the plan announced on Thursday, the company said it will decrease its number of vendors for back-office operations such as buying computers and marketing, centralize store operations, and move toward a "shared services" structure to standardize processes across department stores.
Shares tumbled 9.6 percent, to C$8.70 in early afternoon trading, recovering from a record low of C$8.44 after the company posted a wider-than-expected quarterly loss on Thursday.
Speaking on the conference call, Executive Chairman Richard Baker also reiterated the possibility HBC would sell additional equity in its real estate joint venture assets, or potentially launch an initial public offering of one or both joint ventures, a move investors have been waiting for since the transactions were announced in early 2015. Continued...