Hudson’s Bay Streamlining After Soft Q4 Sales

Hudson’s Bay Co. has announced that it will realign operations to emphasize customer-facing initiatives and save money behind the scenes after sluggish sales for the fourth quarter.

In the fourth quarter ending January 28, Hudson’s Bay recorded a comparable store decrease of 1.2% on a constant currency basis and a decrease of 3.7% with the effects of foreign exchange rate variation included.

In the department store group, including the Hudson’s Bay, Lord & Taylor and Home Outfitters operations, comparable sales increased 0.6%. At Saks Fifth Avenue comps increased 0.1%, but the HBC off price operation including Saks Off 5th and Gilt, experienced a comp decrease of 5.9%. HBC Europe, including the Galeria Kaufhof, Galeria Inno and Sportarena operations, also saw a comp decline, in this case of 2%.

Total digital comparable sales increased 13.3% on a constant currency basis. With results from Gilt excluded, total digital sales increased 20.9% on a constant currency comparable basis, the company maintained.

In late 2016, Hudson’s Bay launched a comprehensive review of its business operations to identify efficiencies, streamline processes and improve back of store productivity, the company stated, while also enhancing customer service. Through this review, HBC maintained that it expects to increase synergies across its portfolio of businesses, sharpen competitive capabilities and re-align expenses to focus on customers. Through this process, the company expects to invest in customer-facing activities while reducing costs in back office and support areas. Ongoing cost reduction initiatives launched will leverage best practices to include more efficient inventory management, a reduction in total supply chain costs and the optimization of scheduling practices to ensure associates are placed where they can most improve customer experience. According to Hudson’s Bay, annualized cost savings from the initiative should come in at about $75 million.