Hudson’s Bay Still Struggling
CBJ — Hudson’s Bay continues to focus on cost cutting measures at it faces a challenging retail environment in Canada and abroad, but hasn’t completely shut the door on buying up more banners.
CEO Jerry Storch said the retailer, and the industry as a whole, continue to face several challenges including lower sales and less foot traffic in shopping malls, where many of its businesses are located.”We are cutting expenses, rationalizing and reallocating our capital spending, strengthening our balance sheets,” he said during the call.
“Because I just don’t know when the market is going to get less promotional, or when or if traffic is going to improve in malls, but I do know that we can control what we spend.”
HBC reported it had a $152-million net loss in the fiscal fourth quarter ended Jan. 28, boosting its loss for the fiscal year to $516 million.
A year ago, it had earnings of $370 million for the quarter and $387 million for the year.
Storch noted that cutting costs is the best way for the company to ensure it’s in the best financial position to face these headwinds.
HBC says it will budget between $450 million and $550 million in capital spending this year, about $150 million less than it spent last year. In January, the company also announced it would cut $75 million from annual costs.
The fourth-quarter loss includes a one-time non-cash goodwill impairment charge of $116 million driven by weak sales at Gilt, one of HBC’s e-commerce businesses, as well as at its Saks Off 5th fashion stores.
For the same period, it saw 2.5 per cent increase in retail sales to $4.6 billion and a 13 per cent increase in comparable digital sales on a constant currency basis.
Founded in 1670, Hudson’s Bay operates more than 470 stores under banners such as the Bay, Saks Fifth Avenue, Lord & Taylor, Gilt, and Saks Off 5th. It also owns Galeria Kaufhof, Galeria INNO and Sportarena in Europe.