Hudson’s Bay Company (HBC), owner of Saks Fifth Avenue, Lord & Taylor, Gilt and other major retailers, saw a loss in its third quarter, which ended October 29th. The Canadian company reported a decline of C$125 million, compared to last year’s C$7 million profit during the same time period.
On the plus side, retail sales rose 29% to C$3.3 billion due to expansion throughout Europe and Gilt. For HBC overall, gross profit rate as a percentage of retail sales was maintained at 42.2% compared to the prior year.
HBC’s big losers this past quarter were Saks Fith Avenue and HBC’s outlet operations, which it defines as Saks Off Fifth and Gilt. “Sales were challenging in the third quarter but we believe our all channel strategy is the right long-term strategy for generating profitable growth,” said Jerry Storch, HBC’s Chief Executive Officer, in a statement.
In its third quarter results release, HBC outlined a plan to turn around sales at its struggling sales. Moving ahead and to thwart further losses, Saks Fifth Avenue will focus on expanding exclusive and limited edition merchandise in order to differentiate its offerings from competitors. It also has plans to amp up its customer loyalty program SaksFirst by creating one-of-a-kind experiences for its members. O the retail level, a new gift concierge has been implemented for the holiday season, including gift-wrapping services, shipping, delivery and help shopping for that perfect holiday gift.
With these plans in place, Storch is looking ahead optimistically. “We remained focused on inventory management during the quarter and despite lower than expected sales, driven by challenges in some of our markets, comparable inventory levels decreased by approximately 2% from the prior year. We believe we are well positioned for and excited about the current holiday season and remain focused on executing our all channel strategy across our banners and geographies.”