HUDSON’S BAY POSTS LOWER SALES IN FOURTH QUARTER

Canadian department store Hudson’s Bay Company reported lower sales in the fourth quarter, hurt by weaker results at its European, Saks OFF 5th and Gilt operations.

Consolidated comparable sales fell 1.2 percent on a constant currency basis during the fourth quarter ended January 28.

Sales fell 5.9 percent at Saks OFF 5th, which sells designer brands at a discount, and its online shopping website, Gilt. In Europe, where HBC operates Galeria Kaufhof, Galeria INNO and Sportarena, sales decreased 2 percent.

Sales rose 0.6 percent at its department store banners, which include Hudson’s Bay and Lord & Taylor, and 0.1 percent at Saks Fifth Avenue.

“We believe the all-channel model is the future of retail, and we are focused on combining best-in-class retail destinations and an advanced digital platform, which will allow our customers to shop whenever, wherever, and however they choose. On a constant currency basis, digital sales grew by 20.9% at our department store banners in the fourth quarter of 2016, and we remain excited about the future of our online business,” commented Jerry Storch, Chief Executive Officer.

He continued: “As we mentioned in January, we have initiated a comprehensive review of our operations, and are continuously looking for opportunities to streamline our business to drive profitable growth. The efficiency initiative announced today, which focuses on reducing corporate overhead, is expected to save approximately $75 million annually. Our operational review is ongoing, and we will continue to evaluate additional opportunities to improve productivity, enhance our operating model, and optimize in-store operations. We believe this cost reduction initiative will help us mitigate the pressures facing our Company and the department store industry as a whole, and expect to provide further updates on other initiatives when appropriate.”