Following its pending sale of Gilt to Rue La La, Hudson’s Bay revealed a bigger net loss and lower overall comps in the first quarter.
The company also stated that it plans to close up to 10 Lord & Taylor stores through 2019, including its flagship New York location, which it recently sold to WeWork.
Hudson’s Bay’s net loss from continuing operations was $314 million, or $1.33 per diluted share, versus a net loss from continuing operations of $214 million, or $1.17 per diluted share, in the prior-year period. All figures are in Canadian currency.
Higher SG&A expenses and depreciation and amortization expenses helped drive the decline, Hudson’s Bay maintained. An increase in the reported loss from the company’s joint ventures, largely driven by the impact of foreign exchange, and a decrease in the income tax benefit also contributed to the loss increase.
First quarter revenue was $3.09 billion, up 1%, from the year-earlier period. Comparable sales slipped 0.7%, ith corporate comparable digital sales increasing 7.7%. By division, comps at Saks Fifth Avenue increased 6%, comps at the department store group, including Hudson’s Bay, Lord & Taylor and Home Outfitter stores, decreased of 0.6%, comps at Saks Off 5th decreased 3.5%, and comps at HBC Europe, including Galeria Kaufhof and Galeria Inno stores, decreased 6.6%.
Richard Baker, HBC’s governor and executive chairman, said, “Results in North America were encouraging, highlighted by better performance across the group and comparable sales growth of 6% at Saks. We have significant opportunity to build on this trend, and are taking action to strengthen the foundation of the company and position HBC for profitable growth. Our decision to divest Gilt will allow us to focus our time and resources on the businesses with the greatest potential to drive operating performance.”
Helena Foulkes, Hudson’s Bay CEO, added, “Over the last month, we have worked rapidly to put in place a leadership team focused on driving business results, streamlining our processes and fostering a culture of accountability. We need to improve across all areas of the business, and this begins with rededicating ourselves to putting the customer first in everything we do. This customer-focused mindset will dictate how we think about key functions of the business, and I see opportunity to dramatically improve our marketing and digital operations while also refining company wide processes that impact our end to end customer experience. In Europe, we have de-layered management, allowing me to be closer to that business as we take actions that are expected to stabilize the topline and improve our cost structure. We are also taking action to reposition Lord & Taylor for improved results and increased profitability. With a new leader dedicated to evolving our experience and merchandise assortment to best meet customer expectations and shopping preferences, we will take advantage of having a smaller footprint to rethink the model and focus on our digital opportunities. The Lord & Taylor flagship on Walmart.com, which launched last week, is a great example of this and represents how we are thinking about the entire business.”
Hudson’s Bay recently appointed Vanessa LeFebvre as president of Lord & Taylor.