HBC: Marc Metrick, President of Saks Fifth Avenue to expand leadership role to include Gilt and Saks OFF 5TH

TORONTO & NEW YORK, 2018-Jan-11 — /EPR Retail News/ — HBC today (January 9, 2018) announced that Marc Metrick, President of Saks Fifth Avenue, will expand his leadership role to include Gilt and Saks OFF 5TH. In this capacity, Mr. Metrick will lead distinct teams and work to ensure that each business remains well positioned to execute within their respective operating structures.

“Since assuming leadership of Saks Fifth Avenue in 2015, Marc has successfully implemented strategies to enhance business performance and elevate the Saks experience to be at the forefront of luxury retailing,” said Richard Baker, Governor, Executive Chairman and Interim CEO. “Marc’s ability to shape and evolve the shopping experience is critical for success in an ever-changing retail environment, and I have great confidence that he will position Gilt and Saks OFF 5TH to drive improved performance.”

Mr. Metrick said, “I’m excited to work closely with the entire team at Gilt and Saks OFF 5TH to drive performance and move the business forward. There is opportunity for growth at both businesses, especially on their respective digital platforms. I look forward to collaborating with the leadership team to position the business for future success.”

As a long-tenured retail executive, Mr. Metrick has served in a number of leadership roles for HBC and Saks Fifth Avenue. Since April 2015, he has held the role of President, Saks Fifth Avenue. Prior to this, he served as Chief Marketing Officer and Chief Administrative Officer of HBC, where he was responsible for corporate strategy and administration for all of HBC’s retail businesses. Mr. Metrick spent the first 15 years of his career at Saks Fifth Avenue, ultimately becoming its Chief Strategy Officer before joining the leadership team of HBC in 2012. At HBC, Mr. Metrick played an instrumental role in the acquisition of Saks Fifth Avenue and has since focused on driving growth there.

With this change in leadership, Jonathan Greller will leave HBC effective January 12.

Mr. Baker said, “Jonathan has worked with the team to integrate Gilt and Saks OFF 5TH, bring Saks OFF 5TH to Canada and open more than 45 stores across North America. We thank Jonathan for his many contributions to HBC and wish him well in his future endeavors.”

About HBC
HBC is a diversified global retailer focused on driving the performance of high quality stores and their allchannel offerings, growing through acquisitions, and unlocking the value of real estate holdings. Founded in 1670, HBC is the oldest company in North America. HBC’s portfolio today includes formats ranging from luxury to premium department stores to off price fashion shopping destinations, with more than 480 stores and over 66,000 employees around the world.

HBC’s leading banners across North America and Europe include Hudson’s Bay, Lord & Taylor, Saks Fifth Avenue, Gilt, Saks OFF 5TH, Galeria Kaufhof, the largest department store group in Germany, and Belgium’s only department store group Galeria INNO.

HBC has significant investments in real estate joint ventures. It has partnered with Simon Property Group Inc. in the HBS Global Properties Joint Venture, which owns properties in the United States and Germany. In Canada, it has partnered with RioCan Real Estate Investment Trust in the RioCan-HBC Joint Venture.

MEDIA:
Andrew Blecher
Phone: (646) 802-4030
Press@hbc.com

INVESTOR RELATIONS:
Elliot Grundmanis
Phone: (646) 802-2469
Email: elliot.grundmanis@hbc.com

Source: HBC

HBC to host Q3 2017 financial results conference call on December 6, 2017

TORONTO & NEW YORK, 2017-Nov-22 — /EPR Retail News/ — HBC (TSX: HBC) is scheduled to announce full financial results for the quarter ended October 28, 2017 before the opening of the financial markets on December 6, 2017. Senior management will discuss financial results and other matters during a conference call that day at 8:30 AM EST.

The conference call will be accessible by calling the participant operator assisted toll-free dial-in number (800) 535-7056 or international dial-in number (253) 237-1145. A live webcast of the conference call will be accessible on HBC’s website at: http://investor.hbc.com/events.cfm. The audio replay also will be available via this link.

About HBC

HBC is a diversified global retailer focused on driving the performance of high quality stores and their all-channel offerings, growing through acquisitions, and unlocking the value of real estate holdings. Founded in 1670, HBC is the oldest company in North America. HBC’s portfolio today includes formats ranging from luxury to premium department stores to off price fashion shopping destinations, with more than 480 stores and over 66,000 employees around the world.

HBC’s leading banners across North America and Europe include Hudson’s Bay, Lord & Taylor, Saks Fifth Avenue, Gilt, Saks OFF 5TH, Galeria Kaufhof, the largest department store group in Germany, and Belgium’s only department store group Galeria INNO.

HBC has significant investments in real estate joint ventures. It has partnered with Simon Property Group Inc. in the HBS Global Properties Joint Venture, which owns properties in the United States and Germany. In Canada, it has partnered with RioCan Real Estate Investment Trust in the RioCan-HBC Joint Venture.

INVESTOR RELATIONS:
Elliot Grundmanis
Phone: (646) 802-2469
Email: elliot.grundmanis@hbc.com

MEDIA CONTACTS:
Andrew Blecher
Phone: (646) 802-4030
Email: andrew.blecher@hbc.com

Source: Hudson’s Bay Company

Milton Pappas named Chief Marketing Officer at HBC

TORONTO & NEW YORK, 2017-Nov-08 — /EPR Retail News/ — HBC or the “Company” (TSX: HBC) today (November 6, 2017) announced the appointment of Milton Pappas to Chief Marketing Officer, effective immediately. In this role, Mr. Pappas will lead the Marketing Center of Excellence (COE), charged with executing the marketing strategies of the Company’s North American retail businesses.

Earlier this year, the Company created the Marketing COE to centralize all-channel marketing development across all of HBC’s North American retail businesses. The Marketing COE operates as an in-house agency and supports the execution of each business’s distinct marketing strategy with comprehensive campaigns that leverage best practices across the organization. The Marketing COE includes Media, Creative, Partnerships and Events, among other areas.

Mr. Pappas has had a long and successful career spanning a diverse portfolio of industries, including publishing and retail. He joined HBC in September 2016 as Senior Vice President, Digital Marketing. He has served as Interim Chief Marketing Officer since June 2017. Pappas joined HBC from New York & Company where he served as Chief Digital Officer. Prior to that, he held senior leadership roles in marketing, digital and e-commerce at Nine West Group, Toys”R”Us, Inc. and Redcats USA. He is a board member of Shop.org, the digital division of the National Retail Federation.

About HBC

HBC is a diversified global retailer focused on driving the performance of high quality stores and their all-channel offerings, growing through acquisitions, and unlocking the value of real estate holdings. Founded in 1670, HBC is the oldest company in North America. HBC’s portfolio today includes formats ranging from luxury to premium department stores to off price fashion shopping destinations, with more than 480 stores and over 66,000 employees around the world.

HBC’s leading banners across North America and Europe include Hudson’s Bay, Lord & Taylor, Saks Fifth Avenue, Gilt, Saks OFF 5TH, Galeria Kaufhof, the largest department store group in Germany, and Belgium’s only department store group Galeria INNO.

HBC has significant investments in real estate joint ventures. It has partnered with Simon Property Group Inc. in the HBS Global Properties Joint Venture, which owns properties in the United States and Germany. In Canada, it has partnered with RioCan Real Estate Investment Trust in the RioCan-HBC Joint Venture.

For more information, visit our website.

MEDIA CONTACT:
Andrew Blecher
646-802-4030
andrew.blecher@hbc.com

INVESTOR RELATIONS:
Elliot Grundmanis
646-802-2469
elliot.grundmanis@hbc.com

Source: Hudson’s Bay Company

HBC President Don Watros to leave the company

TORONTO & NEW YORK, 2017-Aug-28 — /EPR Retail News/ — HBC or the “Company” (TSX: HBC) today (August 24, 2017) announced Don Watros has made the decision to leave HBC effective September 29, 2017.

“With a seasoned leadership team in place in Europe and our plans to bring Hudson’s Bay to the Netherlands and Saks OFF 5TH to Europe coming to fruition, the time is right for me to pursue my next chapter,” said Mr. Watros. “I look forward to following the Company’s continued growth.”

“Don has been a great partner in supporting the growth and integration of HBC’s businesses over the years and was instrumental in HBC entering Europe and helping to establish our structure there,” said Richard Baker, Governor and Executive Chairman, HBC. “We are grateful for his dedication to the Company and wish him the best in his next endeavor.”

“We greatly appreciate Don’s contributions to HBC during his long tenure with the Company, especially his work to bring HBC to Europe and support the establishment of our office there,” said Jerry Storch, CEO, HBC. “I’m pleased that we have a strong team in place to continue to execute on our strategy in Europe, as we invest in Galeria Kaufhof, grow Saks OFF 5TH in Germany and enter the Netherlands with Hudson’s Bay and Saks OFF 5TH.”

An industry veteran, Mr. Watros has been with HBC for 11 years and has seen the Company through major growth. He was appointed President, HBC International in January 2015. Previously, he served as President of HBC and before that as COO of the Company. Prior this role, he was Managing Director of Retail Operations at NRDC Equity Partners during the acquisitions of Lord & Taylor and Hudson’s Bay Company. Mr. Watros has also served as the Chairman of the Galeria Kaufhof Supervisory Board since October 2015. The Supervisory Board will elect a new Chairman at its meeting in October.

About HBC
HBC is a diversified global retailer focused on driving the performance of high quality stores and their all-channel offerings, growing through acquisitions, and unlocking the value of real estate holdings. Founded in 1670, HBC is the oldest company in North America. HBC’s portfolio today includes formats ranging from luxury to premium department stores to off price fashion shopping destinations, with more than 480 stores and over 66,000 employees around the world.

HBC’s leading banners across North America and Europe include Hudson’s Bay, Lord & Taylor, Saks Fifth Avenue, Gilt, Saks OFF 5TH, Galeria Kaufhof, the largest department store group in Germany, and Belgium’s only department store group Galeria INNO.

HBC has significant investments in real estate joint ventures. It has partnered with Simon Property Group Inc. in the HBS Global Properties Joint Venture, which owns properties in the United States and Germany. In Canada, it has partnered with RioCan Real Estate Investment Trust in the RioCan-HBC Joint Venture.

For more information, visit our website.

INVESTOR RELATIONS:
Elliot Grundmanis
646-802-2469
elliot.grundmanis@hbc.com

MEDIA CONTACT:
Andrew Blecher
646-802-4030
andrew.blecher@hbc.com

Source: Hudson’s Bay Company

HBC to announce Q2 2017 results on September 5, 2017

TORONTO & NEW YORK, 2017-Aug-24 — /EPR Retail News/ — HBC (TSX: HBC) is scheduled to announce full financial results for the quarter ended July 29, 2017 after the close of the financial markets on September 5, 2017. Senior management will discuss financial results and other matters during a conference call on September 6, 2017 at 8:30 AM EST.

The conference call will be accessible by calling the participant operator assisted toll-free dial-in number (800) 535-7056 or international dial-in number (253) 237-1145. A live webcast of the conference call will be accessible on HBC’s website at: http://investor.hbc.com/events.cfm. The audio replay also will be available via this link.

About HBC

HBC is a diversified global retailer focused on driving the performance of high quality stores and their all-channel offerings, growing through acquisitions, and unlocking the value of real estate holdings. Founded in 1670, HBC is the oldest company in North America. HBC’s portfolio today includes formats ranging from luxury to premium department stores to off price fashion shopping destinations, with more than 480 stores and over 66,000 employees around the world.

HBC’s leading banners across North America and Europe include Hudson’s Bay, Lord & Taylor, Saks Fifth Avenue, Gilt, Saks OFF 5TH, Galeria Kaufhof, the largest department store group in Germany, and Belgium’s only department store group Galeria INNO.

HBC has significant investments in real estate joint ventures. It has partnered with Simon Property Group Inc. in the HBS Global Properties Joint Venture, which owns properties in the United States and Germany. In Canada, it has partnered with RioCan Real Estate Investment Trust in the RioCan-HBC Joint Venture.

INVESTOR RELATIONS:
Elliot Grundmanis
(646) 802-2469
elliot.grundmanis@hbc.com

MEDIA CONTACTS:
Andrew Blecher
(646) 802-4030
andrew.blecher@hbc.com

Source: Hudson’s Bay Company

Tough First Quarter 2017 Results Prompts HBC To Take Steps To Adapt

  • First Quarter retail sales decreased 3.0% to $3.2 billion, a decrease of 2.9% on a constant currency comparable basis
  • First Quarter comparable digital sales increased 5.4% on a constant currency basis, increasing 13.2% at HBC’s department store banners
  • First Quarter Adjusted EBITDAR of $168 million; Net Loss of $221 million
  • HBC launches Transformation Plan designed to get ahead of industry developments; expected to generate total annual savings of more than $350 million
  • Sets quarterly dividend at $0.0125 per share

TORONTO & NEW YORK & COLOGNE, Germany, 2017-Jun-12 — /EPR Retail News/ — HBC or the “Company” (TSX: HBC) today (June 8, 2017) announced its first quarter financial results for the thirteen week period ended April 29, 2017, and also launched its Transformation Plan, currently expected to generate total annual savings of more than $350 million. Unless otherwise indicated, all amounts are expressed in Canadian dollars. Certain metrics, including those expressed on an adjusted, normalized, comparable and/or constant currency basis, are non-IFRS financial measures. For more information please refer to the “Supplemental Information” section of this press release and the reconciliation tables further below.

“This was a tough quarter for HBC. While the retail apparel market remains particularly challenging, we are taking steps to adapt, beginning with our Transformation Plan announced today. This initiative will reshape our organization to accelerate delivery of a best-in-class all-channel experience to our customers while improving our cost structure. The Transformation Plan makes us more agile and better able to respond to evolving customer preferences and a rapidly changing retail landscape. We strongly believe that our model of combining world class real estate assets, which are less impacted by short-term trends, with our diverse retail businesses provides long-term value for the Company and our shareholders,” stated Richard Baker, HBC’s Governor and Executive Chairman.

Jerry Storch, HBC’s Chief Executive Officer, added, “We know we can do better and we are taking bold decisive action. Rather than chase the rapid industry changes, our Transformation Plan will reposition HBC to get ahead and stay ahead. This North American based initiative, the result of a process we began more than six months ago, is designed to increase synergies across our portfolio of businesses, sharpen capabilities that give the Company a competitive edge and re-align our expenses to focus on growing our digital business. Savings from the changes we have announced today are required to help mitigate the pressures we are facing in the current environment. As we have developed our plan, we have been determined to become not just a leaner Company but also a better one. These changes include significant improvements to our organizational structure, store operations and procurement strategy, all of which better reflect the Company’s efforts to drive the business forward and deliver a best-in-class all-channel experience. Combined with our prudent management of capital expenditures, we believe that this improved structure will better position HBC for the future.”

Update on Operational Review:

As announced today in a separate press release, HBC has largely completed the comprehensive review of its North American business operations started in late 2016. As part of this review, the Company is implementing changes to drive its business forward and improve the Company’s all-channel business model. This Transformation Plan will increase operational synergies, sharpen capabilities and reduce expenses. Including the $75 million in savings announced in February, annual savings from this Transformation Plan are currently expected to total more than $350 million by the end of Fiscal 2018, with approximately $170 million anticipated to be realized during this fiscal year. Of this $170 million, the actions necessary to secure $125 million are complete as of today. As part of this initiative, the Company will reduce total headcount by approximately 2,000 positions, including those previously announced in February. These savings are required to help offset revenue, margin and cost pressures the Company is facing in the current retail environment. In addition to the severance charges incurred as part of the Company’s actions in February, HBC’s expects one-time charges related to this initiative of approximately $95 million over the next 12 months.

Key Actions of HBC’s Transformation Plan

  • Creating two distinct leadership teams, one focused on Hudson’s Bay and one dedicated to Lord & Taylor, to drive market-specific strategies. The Hudson’s Bay leadership team will focus on accelerating plans to build upon its successful transformation in Canada, while the Lord & Taylor leadership team will focus on increasing the pace of change at that U.S. banner, with an emphasis on driving digital opportunities while operating its stores more efficiently.
  • Integrating digital functions throughout the organization to develop and maximize the impact of all-channel solutions for marketing, operations and technology in order to deliver the most seamless in-store and online experience for HBC’s customers.
  • Realigning resources including IT and Digital, Store Operations & Visual Merchandising, Buying & Planning and Marketing to increase efficiencies and leverage scale, with world-class centers of excellence that support banners while preserving differentiation among the businesses.
  • Optimizing in-store service and enhancing sales training for store associates to better serve HBC’s customers.
  • Reducing our employee base by approximately 2,000 positions, including those previously announced in February, which will flatten the organization by removing layers to make HBC more nimble and streamline the decision making process.
  • Fully leveraging the size and scale of the Company to optimize procurement and generate additional savings.

First Quarter Summary

All comparative figures below are for the thirteen week period ended April 29, 2017 compared to the thirteen week period ended April 30, 2016. DSG refers, collectively, to the Lord & Taylor, Hudson’s Bay and Home Outfitters banners. HBC Europe refers, collectively, to the GALERIA Kaufhof, Galeria INNO and Sportarena banners. HBC Off Price refers, collectively, to the Saks Fifth Avenue OFF 5TH (“Saks OFF 5TH”) and Gilt banners.

Retail sales were $3,203 million, a decrease of $100 million, or 3.0%, from the prior year. The decrease is related primarily to lower overall comparable sales of approximately $94 million. The remainder of the decrease was driven by a negative $31 million foreign exchange impact on the translation of U.S. dollar and Euro denominated sales and a $25 million impact from store closures, partially offset by the opening of four new Saks Fifth Avenue stores and 25 new Saks OFF 5TH stores during the last year, which contributed approximately $50 million in sales.

On a constant currency basis, comparable sales held flat at HBC Europe and declined by 2.4% at DSG, 4.8% at Saks Fifth Avenue and 6.8% at HBC Off Price, resulting in an overall consolidated comparable sales decline of 2.9%. Comparable sales during the quarter were impacted by lower traffic across HBC’s banners, as well as a highly promotional retail environment.

While HBC Europe experienced lower overall traffic, this was offset by an increase in both conversion rate and average basket size as HBC Europe continued to fine tune its marketing activities and introduce new brands. Looking ahead, creative marketing campaigns combined with the roll-out of new “store within store” concepts and further introduction of new brands are expected to drive sales in Europe through the back half of the fiscal year. Additionally, HBC Europe is introducing the Company’s Saks OFF 5TH banner in Germany, with an opportunity for up to 40 stores. The first store opened today in Düsseldorf to large crowds, and the Company has announced the location of four other stores expected to open later this year. In the Netherlands, HBC Europe will be opening the first Hudson’s Bay stores later this summer and expects to open a total of ten stores during Fiscal 2017.

Although overall comparable sales at DSG declined, sales increased at Hudson’s Bay, primarily driven by strong overall digital sales. Active and ladies shoes continued to perform well while handbag sales declined and growth in home was lower year over year. Ongoing initiatives at Hudson’s Bay include an increased focus on key categories such as active, dresses, home and men’s, as well as focused digital marketing designed to drive all-channel sales. At Lord & Taylor, in-store traffic remains challenging, though the Company has seen an improvement in overall conversion. During the quarter, Lord & Taylor expanded The Dress Address initiative, and continues to heighten its focus on key categories such as active, dresses, denim and fine jewelry while investing in value-focused messaging and new and existing partnerships. Lord & Taylor is also dedicating additional resources to its digital business in an effort to drive performance of this channel.

As announced today, the Company is creating dedicated leadership teams for each of Hudson’s Bay and Lord & Taylor. These teams will drive market-specific strategies that support plans for continued growth at Hudson’s Bay in Canada and increase the pace of change at Lord & Taylor, with an emphasis on driving digital opportunities.

Lower comparable sales at Saks Fifth Avenue were primarily driven by lower traffic, a decline in international sales, and a shift in timing of two major promotional events. Saks continues to focus on injecting newness into the customer experience while investing in marketing initiatives in key markets through events, targeted marketing, and continued enhancements to our SaksFirst loyalty program. Saks Fifth Avenue will also roll out several digital initiatives over the coming months and expects to expand its drop ship program in addition to rolling out “buy online, pick up in store” functionality at all stores.

Lower traffic at Saks OFF 5TH and Gilt primarily drove the comparable sales decline at HBC Off Price, though Gilt accounted for an outsized portion of the overall decline. The Company continues to work on elevating the assortment at Saks OFF 5TH, while also growing the amount of exclusive product both in store and online. The integration of Gilt and Saks OFF 5TH is ongoing, with the expectation that Saks OFF 5TH assortments will be available on Gilt by the end of the third fiscal quarter, providing customers with more access to top designers, products, and categories at attractive values.

Digital sales increased by 5.6% from the prior year, with comparable digital sales on a constant currency increasing by 5.4%. Excluding Gilt, comparable digital sales on a constant currency basis increased by 13.2%, reflecting the Company’s continued strategic focus on growing this channel.

For HBC overall, gross profit1 as a percentage of retail sales was 41.7%, a decline of 20 basis points compared to the prior year. The majority of the decrease is the result of lower margins realized at DSG and HBC Off Price due, in part, to increased promotional activity, partially offset by higher margins at Saks Fifth Avenue and HBC Europe.

SG&A expenses were $1,373 million compared to $1,395 million in the prior year. During the quarter the 4th Circuit court affirmed a U.S. $31 million judgment in favour of the Company with respect to its Lord & Taylor store in White Flint, Maryland. This judgment was for damages resulting from changes made to the adjacent White Flint Mall that were undertaken without Lord & Taylor’s consent. Cash proceeds from the judgment were also received during the quarter, and the amount has been recognized as a credit to SG&A in the Company’s statement of loss.

SG&A expenses also benefited from a $22 million dollar impact related to foreign exchange rate movements, a $16 million reduction in lease guarantee provisions, a $15 million reduction in acquisition and integration related expenses, as well as initial savings from the Company’s $75 million cost savings initiative announced earlier in the year. Partially offsetting these benefits was a $10 million increase in restructuring charges as a result of the same cost savings initiative, $21 million in expenses related to HBC’s expansion into the Netherlands, a $7 million increase in rent expense, as well as incremental expenses related to new stores and various other items. Additionally, both the shift to digital sales from traditional in-store sales as well as overall digital sales growth during the quarter continues to have a negative impact on SG&A expenses as a result of higher fulfillment costs associated with this channel. Profit margins on digital sales are expected to improve over time, as the Company continues to invest in its digital supply chain, reduces expenses related to its digital operations and introduces store centric all-channel delivery options.

Adjusted SG&A1 expenses, which exclude certain non-cash items and normalizing adjustments consistent with the Company’s other adjusted non-IFRS metrics, were $1,341 million or 41.9% of retail sales, compared to $1,300 million or 39.4% in the prior year. This increase in SG&A dollars was driven by additional SG&A related to new stores opened during the previous year, additional investment in digital resources combined with an increase in fulfillment expenses related to the sales growth in this channel, and various other items, partially offset by a $19 million benefit as a result of foreign exchange rate movements. These factors, combined with the impacts associated with lower comparable sales, resulted in an increased Adjusted SG&A1 expense rate.

Adjusted EBITDAR1 was $168 million, compared to $250 million in the prior year. The decline in Adjusted EBITDAR1 can be primarily attributed to a decline in gross profit dollars combined with an increase in Adjusted SG&A1 expenses as discussed above.

While rent expenses are spread evenly over the course of the Fiscal year, the Company’s pre-rent earnings are typically highly seasonal, with the majority of earnings generated in the back half of the Fiscal year. The formation of the two real estate joint ventures and the establishment of additional rents payable to these entities significantly increased rental expense as a percentage of the seasonally low pre-rent earnings generated during the first half of the fiscal year. Total rent expense during the first quarter, including net cash rent associated with the Company’s joint ventures, was essentially flat compared to the prior year. Accordingly, Adjusted EBITDA1 was negative $21 million, a decrease of $83 million compared to the prior year and consistent with the decline in Adjusted EBITDAR1.

Net loss was $221 million compared to $97 million in the prior year. The higher net loss is primarily due to lower gross margin dollars combined with higher depreciation and amortization expenses of $15 million, higher finance costs of $12 million and an increased share of net loss from the joint ventures of $25 million. This change in the net loss from joint ventures was driven by the impact of foreign exchange translation of Euro denominated debt at HBS Global Properties. Additionally, prior year results included a net of tax gain of $28 million on the sale of investments in the joint ventures, while the current quarter included a net of tax $25 million SG&A credit related to the White Flint Lord & Taylor judgment. Normalized Net Losses1 were $217 million compared to $91 million in the prior year. This decrease is primarily a result of lower gross profit dollars and higher Adjusted SG&A1, as described above, as well as increased depreciation and amortization expenses.

Finance costs were $57 million compared to $45 million in the prior year. The increase is primarily related to the reduction in non-cash finance income generated from mark-to-market adjustments associated with the valuation of Common Share purchase warrants outstanding compared to the prior year. Additionally, there was an increase in interest costs related to long-term borrowings, partially offset by reductions in interest costs related to short-term borrowings. Interest paid in cash was $45 million compared to $49 million in the prior year.

Note:
1 These performance metrics have been identified by the Company as Non-IFRS measures. For the relevant definitions and reconciliations, please refer to the “Non-IFRS Measures” and “Supplemental Information” sections, respectively, of this release.

Real Estate

Management strongly believes in the value of the Company’s real estate assets, which are predominantly located in high traffic locations including urban high streets and prime retail shopping centres. To date, HBC has structured two joint ventures as REIT ready vehicles, obtained independent appraisals on its two wholly-owned New York City flagships as part of mortgage financings on the properties, and sold equity in HBS Global Properties to third-party investors. To continue to highlight the value of its real estate assets, the Company may take additional actions which could include the sale of additional equity in its joint ventures or real estate assets, and/or a potential public listing of either or both of the joint ventures, in all cases subject to prevailing market conditions.

Inventory

Inventory at the end of the first quarter increased by $299 million compared to the prior year. This increase was driven primarily by foreign exchange rate movements and higher inventory at HBC Europe, largely as a result of the introduction of new brands and upgraded concepts at Galeria Kaufhof. Saks Fifth Avenue and Saks OFF 5TH also experienced a moderate increase in inventory levels, driven by the addition of new stores. These increases were partially offset by lower inventory at DSG.

About HBC

HBC is a diversified global retailer focused on driving the performance of high quality stores and their all-channel offerings, growing through acquisitions, and unlocking the value of real estate holdings. Founded in 1670, HBC is the oldest company in North America. HBC’s portfolio today includes formats ranging from luxury to premium department stores to off price fashion shopping destinations, with more than 480 stores and over 66,000 employees around the world.

HBC’s leading banners across North America and Europe include Hudson’s Bay, Lord & Taylor, Saks Fifth Avenue, Gilt, Saks OFF 5TH, Galeria Kaufhof, the largest department store group in Germany, and Belgium’s only department store group Galeria INNO.

HBC has significant investments in real estate joint ventures. It has partnered with Simon Property Group Inc. in the HBS Global Properties Joint Venture, which owns properties in the United States and Germany. In Canada, it has partnered with RioCan Real Estate Investment Trust in the RioCan-HBC Joint Venture.

Forward-Looking Statements

Certain statements made in this news release, including, but not limited to, the benefits of the Company’s model of combining world class real estate assets with diverse retail businesses, the anticipated benefits and annualized savings from HBC’s Transformation Plan and potential additional productivity enhancements, including the initiative’s ability to increase synergies across the Company’s portfolio of businesses, sharpen capabilities that give the Company a competitive edge and re-align its expenses to focus on growing our digital business and ability to execute key components of the Transformation Plan, including creating dedicated leadership teams for each of Hudson’s Bay and Lord & Taylor, integrating digital functions throughout the organization, realigning Company resources to increase efficiencies and leverage scale, optimizing in-store service and enhanced training to store associates, reducing headcount by approximately 2,000 positions, leveraging the size and scale of the Company to optimize procurement, activities expected to drive sales in Europe, opportunity for Saks OFF 5TH banner stores in Germany, digital initiatives, integration of Gilt and Saks OFF 5TH, and the Company’s strategy with respect to the joint ventures, the Company’s anticipated gross capital investments and capital investments, net of landlord incentives, for Fiscal 2017, and the intended use of such capital investments, including expansion into the Netherlands, ongoing store renovations and the installation of automated fulfillment technology at the Pottsville distribution centre, the intended use of the cash savings from the Company’s change in dividend policy, and other statements that are not historical facts, are forward-looking. Often but not always, forward-looking statements can be identified by the use of forward-looking terminology such as “may”, “will”, “expect”, “believe”, “estimate”, “plan”, “could”, “should”, “would”, “outlook”, “forecast”, “anticipate”, “foresee”, “continue” or the negative of these terms or variations of them or similar terminology.

Implicit in forward-looking statements in respect of capital investments, including, among others, the Company’s anticipated Fiscal 2017 total capital investments, net of landlord incentives, between $450 million and $550 million, are certain assumptions regarding, among others, the overall retail environment and currency exchange rates for Fiscal 2017. Gross capital investment is expected to be between $1,025 million and $1,125 million, of which approximately $800 million is related to growth initiatives. Specifically, the Company has assumed the following exchange rates for Fiscal 2017: USD:CAD = 1:1.34 and EUR:CAD = 1:1.43. These current assumptions, although considered reasonable by the Company at the time of preparation, may prove to be incorrect. Readers are cautioned that actual capital investments could differ materially from what is currently expected and are subject to a number of risks and uncertainties, including, among others described below, general economic, geo-political, market and business conditions, changes in foreign currency rates from those assumed, the risk of unseasonal weather patterns and the risk that the Company may not achieve overall anticipated financial performance.

Although HBC believes that the forward-looking statements in this news release are based on information and assumptions that are current, reasonable and complete, these statements are by their nature subject to a number of factors that could cause the Company’s actual results, level of activity, performance, achievements, future events or developments to differ materially from management’s expectations and plans as set forth in such forward-looking statements, including, without limitation, the following factors, many of which are beyond HBC’s control and the effects of which can be difficult to predict: ability to execute retailing growth strategies, ability to continue comparable sales growth, changing consumer preferences, marketing and advertising program success, damage to brands, dependence on vendors, ability to realize synergies and growth from strategic acquisitions, ability to make successful acquisitions and investments, successful inventory management, loss or disruption in centralized distribution centres, ability to upgrade and maintain the Company’s information systems to support the organization and protect against cyber-security threats, privacy breach, risks relating to the Company’s size and scale, loss of key personnel, ability to attract and retain qualified employees, deterioration in labour relations, ability to maintain pension plan surplus, funding requirement of Saks’ pension plan, funding requirement of the HBC Europe pension plan, limits on insurance policies, loss of intellectual property rights, insolvency risk of parties which the Company does business with or their unwillingness to perform their obligations, exposure to changes in the real estate market, successful operation of the joint ventures to allow the Company to realize the anticipated benefits, loss of flexibility with respect to properties in the joint ventures, exposure to environmental liabilities, changes in demand for current real estate assets, increased competition, change in spending of consumers including the impact of unfavourable or unstable political conditions and terrorism, international operational risks, fluctuations in the U.S. dollar, Canadian dollar, Euro and other foreign currencies, increase in raw material costs, seasonality of business, extreme weather conditions or natural disasters, ability to manage indebtedness and cash flow, risks related with increasing indebtedness, restrictions of existing credit facilities reducing flexibility, ability to maintain adequate financial processes and controls, ability to maintain dividends, ability of a small number of shareholders to influence the business, uncontrollable sale of the Company’s Common Shares by significant shareholders could affect share price, constating documents discouraging favorable takeover attempts, increase in regulatory liability, increase in product liability or recalls, increase in litigation, developments in the credit card and financial services industries, changes in accounting standards, other risks inherent to the Company’s business and/or factors beyond its control which could have a material adverse effect on the Company.

HBC cautions that the foregoing list of important factors and assumptions is not exhaustive and other factors could also adversely affect its results. For more information on the risks, uncertainties and assumptions that could cause HBC’s actual results to differ from current expectations, please refer to the “Risk Factors” section of HBC’s Annual Information Form dated April 28, 2017, the “Risk Factors” section of HBC’s MD&A dated June 8, 2017, as well as HBC’s other public filings, available at www.sedar.com and at www.hbc.com.

The forward-looking statements contained in this news release describe HBC’s expectations at the date of this news release and, accordingly, are subject to change after such date. Except as may be required by applicable Canadian securities laws, HBC does not undertake any obligation to update or revise any forward-looking statements contained in this news release, whether as a result of new information, future events or otherwise. Readers are cautioned not to place undue reliance on these forward-looking statements.

INVESTOR RELATIONS:
Elliot Grundmanis
(646) 802-2469
elliot.grundmanis@hbc.com

MEDIA:
Andrew Blecher
(646) 802-4030
Andrew.blecher@hbc.com

Source: HBC

HBC announces its 3Q FY2016 financial results

  • Consolidated retail sales increased 28.6% to $3.3 billion from $2.6 billion a year ago
  • Digital sales at Legacy HBC grew 12.9% on a constant currency comparable basis
  • Inventory levels on a comparable basis declined approximately 2% from a year ago as a result of the Company’s disciplined focus on this area
  • Adjusted EBITDAR decreased 1.4% to $276 million
  • Net Loss of $125 million; The current quarter included $3 million in net dilution gains related to the joint ventures compared to $91 million a year ago, which contributed to net earnings of $7 millionin that period

TORONTO & NEW YORK & COLOGNE, Germany, 2016-Dec-07 — /EPR Retail News/ — Hudson’s Bay Company (“HBC” or the “Company”) (TSX: HBC) today (December 5, 2016) announced its third quarter financial results for the thirteen and thirty-nine week periods ended October 29, 2016. Unless otherwise indicated, all amounts are expressed in Canadian dollars. Certain metrics, including those expressed on an adjusted, normalized, comparable and/or constant currency basis, are non-IFRS financial measures (for more information please refer to the “Supplemental Information” section of this press release and the reconciliation tables further below).

“During the third quarter we continued to execute our all channel strategy in the face of a retail environment where there were challenges in the women’s apparel, department store and luxury segments. To address this we are continuing to move aggressively, making specific improvements both in our digital and brick and mortar operations that will allow us to better serve our customers. During the quarter we finished installing our world class robotic fulfillment system in Canada, and are already leveraging this technology at Hudson’s Bay during the busy holiday season. We are also excited about our progress in Europe. In the Netherlands, we are executing our organic growth strategy, and in November we completed our first major renovation in Germany at our GALERIA Kaufhof store in Düsseldorf. During the quarter, we took advantage of a favourable lending environment to reprice our term loan which will reduce our interest costs going forward. We believe our world class real estate portfolio, which is less affected by near term retail trends, continues to provide substantial value to the Company,” stated Richard Baker, HBC’s Governor and Executive Chairman.

Jerry Storch, HBC’s Chief Executive Officer, added, “Sales were challenging in the third quarter but we believe our all channel strategy is the right long-term strategy for generating profitable growth. We continue to focus on delighting our customers and building a digital and brick and mortar platform that will allow them to shop whenever, wherever and however they choose. Many of our initiatives revolve around finding new ways to wow our customers and offering tailored, exclusive product, which we expect will drive sales across all of our banners. While we have made considerable progress on increasing efficiencies during the last year, we believe that there are further areas for improvement and we will continue to evaluate our options. 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.”

Plans to Drive Sales Growth

Hudson’s Bay and Lord & Taylor are focused on strengthening outperforming categories such as dresses and active wear. Additionally, Hudson’s Bay is optimizing its Home Goods business while better utilizing existing space through the addition of new categories such as toys. Both banners will continue to emphasize top-performing brands and products that are “Exclusively Ours”. For the holiday season, Hudson’s Bay and Lord & Taylor look to deliver strong key items at tremendous values and the introduction of an all-door gift giving program is expected to drive incremental sales. Both banners are also increasing their focus on the fast-growing mobile segment of the digital market.

Saks Fifth Avenue is very focused on sourcing exclusive and limited distribution product in order to differentiate its offerings. In conjunction with this, SaksFirst, the Saks Fifth Avenue customer loyalty program, is dedicating its service towards driving loyalty among emerging customers and creating one-of-a-kind experiences for existing members. For the holiday season, Saks Fifth Avenue is also proud to introduce a new gift concierge service which will offer dedicated gift concierges to assist customers with all of their gift-giving needs, including gift-wrapping, shipping, delivery, or simply finding that perfect holiday gift. Along with these initiatives, Saks Fifth Avenue is equipping all of its sales associates with tools that allow them to market themselves locally and take greater control over their success.

GALERIA Kaufhof is continuing its renovation program to modernize its selling space and introduce new and exciting brands. For example, Topshop recently opened its first German location at the Berlin store on Alexanderplatz. While renovations at key stores have negatively impacted current sales, these initiatives are expected to drive long-term sales growth and modernize the shopping experience throughout the banner. In addition to the ongoing renovations, GALERIA Kaufhof is investing in digital platforms as it works towards creating a best-in-class all channel offering. Digital sales are currently a small portion of the banner’s overall sales and GALERIA Kaufhof believes that there is significant opportunity to grow sales in this channel.

HBC’s Off Price banners are refocusing on their core strategy: offering high end brands at everyday value. While Saks OFF 5TH attempted to broaden its appeal by offering a wider selection of price points, the banner’s ability to provide high end, sought after products is a major differentiating factor for Saks OFF 5TH as compared to other off priced retailers. Saks OFF 5TH is in the process of re-merchandising its product mix to have a higher concentration of products at the top end of Saks OFF 5TH’s offering range, which is expected to drive increased traffic and conversion as well as a higher overall basket size. In addition, Saks OFF 5TH introduced a revised pricing strategy which was fully implemented by the end of the third quarter in the prior year. This revised strategy substantially reduced promotional activity and focused on offering great value on an everyday basis. The revised pricing strategy is expected to drive increased margin by offering customers a clearer value proposition. Gilt recently unveiled holiday offerings that feature entire outfits curated from its selection of unique brands, and is expanding its concierge program to provide personalized service to top customers. Heading into next year, Gilt expects to expand its brand partnerships to include new up and coming brands in addition to securing exclusive launches and collaborations.

Third Quarter Summary

All comparative figures below are for the thirteen week period ended October 29, 2016 compared to the thirteen week period ended October 31, 2015. DSG refers, collectively, to the Lord & Taylor, Hudson’s Bay and Home Outfitters banners. HBC Europe refers, collectively, to GALERIA Kaufhof, Galeria INNO and Sportarena banners. HBC Off Price refers, collectively, to the Saks Fifth Avenue OFF 5TH (“Saks OFF 5TH”) and Gilt banners. Legacy HBC refers to the Company as structured prior to the acquisition of HBC Europe and Gilt.

Consolidated retail sales were $3,300 million, an increase of 28.6% from the prior year, primarily as a result of the addition of HBC Europe and Gilt offset by a decrease in comparable sales of 4.0%. On a constant currency basis, comparable sales declined by 2.4% at DSG, 2.2% at HBC Europe, 8.4% at HBC Off Price and 4.6% at Saks Fifth Avenue, resulting in a total comparable sales decline of 3.6%. Total digital sales increased by 73.0% from the prior year, with total digital comparable sales increasing by 5.4% on a constant currency basis. Total digital comparable sales at Legacy HBC increased 12.9% on a constant currency basis.

For HBC overall, gross profit rate as a percentage of retail sales was maintained at 42.2% compared to the prior year.

Over the last several quarters, HBC has grown dramatically through the acquisition of GALERIA Kaufhof, Gilt, and the creation of the respective joint ventures with RioCan Real Estate Investment Trust and Simon Property Group (collectively the “Joint Ventures”). Until the Company begins to anniversary these transactions, SG&A expenses will not be directly comparable to previous periods.

SG&A expenses were $1,342 million compared to $1,012 million in the prior year. This increase reflects the additions of HBC Europe, Gilt and the Joint Ventures. Normalized SG&A expenses were $1,284 million or 38.9% of retail sales, compared to 35.3% in the prior year. This rate increase was primarily driven by increased net rent expenses incurred in connection with the Joint Ventures, lower than expected comparable sales, and the inclusion of HBC Europe, which operates at a higher SG&A rate, for the full quarter.

Adjusted EBITDAR was $276 million, a decrease of 1.4% compared to $280 million in the prior year. This decrease should be viewed in relation to the 52.2% increase in Adjusted EBITDAR reported in the prior year. The decline in the current quarter was driven primarily by lower comparable sales, offset by the addition of HBC Europe for part of the quarter.

Adjusted EBITDA was $89 million, a decrease of $81 million compared to $170 million in the prior year. The Joint Ventures had a $60 million impact on Adjusted EBITDA compared to an $18 million impact in the prior year. Adjusting for this $42 million increase, the decline would have been 22.9%. This decline is relative to an Adjusted EBITDA increase of 44.1% in the prior year.

Commencing with the fourth quarter, the Company expects that its results will be more comparable as it anniversaries the increase in Joint Venture rent expenses associated with the contribution of its European properties and the sales of part of its equity in the HBS Joint Venture to third party investors. These Joint Venture rent expenses are essentially flat over the course of the year, while the retail business is seasonal, with sales and earnings weighted towards the back of the fiscal year.

Finance costs were $48 million compared to $29 million in the prior year. Of the $19 million increase, $8 million was due to the change in non-cash finance income generated from mark to market adjustments associated with the valuation of outstanding common share purchase warrants, and $6 million was related to higher interest expense associated with finance leases and pension liabilities acquired as part of the GALERIA Kaufhof transaction. Interest paid in cash was $41 million compared to $36 million in the prior year.

Net loss was $125 million compared to net earnings of $7 million in the prior year. Prior year earnings included a net gain of $91 million related to the dilution gains from investments in the Joint Ventures, compared to $3 million in the current year. Normalized Net Loss was $102 million compared to a loss of $1 million in the prior year. This increase in loss is primarily a result of increased rent expenses to the Joint Ventures and third parties, higher depreciation and amortization expenses, lower comparable sales and increased finance costs.

Year-to-Date Summary

All comparative figures below are for the thirty-nine week period ended October 29, 2016 compared to the thirty-nine week period ended October 31, 2015.

Consolidated retail sales were $9,855 million, an increase of 47.6% from the prior year, primarily as a result of the addition of HBC Europe and Gilt as well as an increase in comparable sales of 0.7%. On a constant currency basis, comparable sales grew 0.2% at DSG, offset by declines of 0.9% at HBC Europe, 8.0% at HBC Off Price and 4.0% at Saks Fifth Avenue, resulting in a total comparable sales decline of 2.0%. Total digital sales increased by 81.8% from the prior year, with total digital comparable sales increasing by 5.5% on a constant currency basis. Total digital comparable sales at Legacy HBC increased 13.0% on a constant currency basis.

For HBC overall, gross profit rate as a percentage of retail sales was 41.9%, an increase of 80 basis points from the prior year. This increase was primarily related to the addition of HBC Europe, which operates at relatively higher gross margin and SG&A rates.

SG&A expenses were $4,023 million compared to $2,567 million in the prior year, primarily as a result of the addition of HBC Europe, Gilt, and the Joint Ventures. Normalized SG&A expenses were $3,833 million or 38.9% of retail sales, compared to 36.1% in the prior year. This rate increase was primarily driven by the inclusion of HBC Europe, as well as net rent expense incurred in connection with the Joint Ventures.

Adjusted EBITDAR was $789 million, an increase of 37.5% compared to $574 million in the prior year, primarily as a result of the addition of HBC Europe. This increase follows an Adjusted EBITDAR increase of 22.1% in the prior year.

Adjusted EBITDA was $232 million, compared to $326 million in the prior year. The Joint Ventures had a $182 million impact on Adjusted EBITDA during the first three quarters of this fiscal year, compared to a $19 millionimpact in the prior year.

Commencing with the fourth quarter, the Company expects that its results will be more comparable as it anniversaries the increase in Joint Venture rent expenses associated with the contribution of its European properties and the sales of part of its equity in the HBS Joint Venture to third party investors. These Joint Venture rent expenses are essentially flat over the course of the year, while the retail business is seasonal, with sales and earnings weighted towards the back of the fiscal year.

Finance costs were $149 million compared to $128 million in the prior year. The majority of this increase is related to higher interest expense related to the Company’s finance leases and pension and employee liabilities acquired as part of the GALERIA Kaufhof transaction, as well an increase in short term borrowing interest expense. Interest paid in cash was $127 million, a $20 million increase over the prior year.

Net loss was $364 million compared to net earnings of $17 million in the prior year. Prior year earnings include total gains of $198 million related to the Joint Ventures, compared to $41 million in the current year. Normalized Net Loss was $315 million compared to a loss of $90 million in the prior year, primarily as a result of the creation of the Joint Ventures and the additional net rent expense associated with these entities, which are spread evenly over the course of the year, and increased depreciation and amortization expense.

Inventory

Inventory at the end of the third quarter increased by $217 million compared to the prior year. This increase was driven by the acquisition of Gilt, the opening of new Saks Fifth Avenue and Saks OFF 5TH stores and foreign exchange movements. During the quarter there was a heightened focus on inventory and as a result, on a comparable basis, inventory levels decreased by approximately 2% compared to the prior year.

Store Network

During the third quarter, the Company opened five Saks OFF 5TH stores in Canada, which are located in Toronto, Ontario; Ottawa, Ontario; Vancouver, British Columbia; Calgary, Alberta and Edmonton, Alberta. In the U.S., the Company opened two Saks Fifth Avenue stores located in New York, New York and Honolulu, Hawaii, as well as 12 Saks OFF 5TH stores, which are located in Woodland Hills, California; Frisco, Texas; Fairfax, Virginia; Palm Desert, California; Springfield, Virginia; Washington, DC; Pittsburgh, Pennsylvania; Brooklyn, New York; Naples, Florida;Scottsdale, Arizona; Rockville, Maryland and Clarksburg, Maryland. The Company closed two Saks Fifth Avenuestores in Short Hills, New Jersey and Fort Myers, Florida, one Saks OFF 5TH store in Schaumburg, Illinois and three Home Outfitters stores in Ottawa, Ontario; Nepean, Ontario and Montreal, Quebec.

INVESTOR RELATIONS:
Hudson’s Bay Company:
Kathleen de Guzman
646-802-7070
kathleen.deguzman@hbc.com

Elliot Grundmanis
416-256-6732
elliot.grundmanis@hbc.com

MEDIA CONTACTS:
Hudson’s Bay Company:
Andrew Blecher
646-802-4030
Andrew.blecher@hbc.com

Source: Hudson’s Bay Company

The GALERIA Kaufhof head office to become HBC Europe’s new headquarters

Cologne, 2016-Jul-23 — /EPR Retail News/ — The GALERIA Kaufhof headquarters, which has long been based in Cologne city center, will be remodeled into a modern service center over the course of the next 18 months, encompassing all of HBC Europe’s banners. The first important steps have now been taken to allow this to go ahead. The Hudson’s Bay Company (HBC), which has been the parent company of GALERIA Kaufhof GmbH since October 2015, has concluded a long-term lease agreement with an investment company of WealthCap, proprietor of the building complex on Leonhard-Tietz-Straße. The agreement runs for more than twelve years until the end of 2028.

At the leased premises, which measure around 38,000 square meters, the current headquarters will be developed into the central office of HBC’s European department store business, bringing all of its banners that are active in Europe under one roof. HBC Europe currently operates in Germany and Belgium, and its department stores will be launched in the Netherlands in 2017 and Luxembourg in 2018. HBC’s premium off-price business Saks OFF 5th will also be launched in Germany and the Netherlands in 2017, and this too will be managed from Cologne.

Donald Watros, President HBC International and Head of the Supervisory Board of Galeria Kaufhof, said: “The European business today represents about one third of the total HBC business. We are proud to further grow and strengthen our banners in Europe and to start new operations in the Netherlands and in Luxembourg. Cologne is the ideal backbone for our European expansion, providing central services like i.e. IT, logistics, personnel and finances.”

Kaufhof chief executive Olivier Van den Bossche, who is also leading HBC’s European department store operations, stated with regard to the plans: “HBC’s long-term commitment is a great opportunity both for our associates and for the city of Cologne. In collaboration with the owner of the property, we will be creating a modern and open working environment over the next 18 months. We are particularly looking forward to bringing our associates from departments which had been transferred to other buildings in Cologne back to the central office, thus creating a joint working environment under one roof. In the refurbished head office, we will have room for 2,000 work stations.”

The renovation work will be implemented in three phases, and the company will respect the requirements of the listed building. The property owner WealthCap will share two-thirds of the investment costs for the modernization work.

Contact:

GALERIA Kaufhof GmbH
Steffen Kern, Corporate Communications
+ 49 (0) 221/223-5597
Steffen.Kern@kaufhof.de

Source: HBC

Hudson’s Bay Company unveils steps to deliver enhanced all-channel customer experience, accelerate financial performance and drive future success

  • Actions to Generate Additional $75 Million in Expected Annualized Cost Savings and Synergies beyond Previously Announced Synergies from the Integration of Saks Incorporated
  • Realignment Supports Growth Areas of the Business, including Digital Offering and Geographic Expansion

TORONTO & NEW YORK, 2015-9-30 — /EPR Retail News/ — Hudson’s Bay Company (TSX:HBC) today announced a series of actions to position the Company to deliver an enhanced all-channel customer experience, accelerate financial performance and drive future success. Reflecting the Company’s substantial growth and strong performance since the 2013 acquisition of Saks Incorporated, the initiatives are designed to enable HBC to invest greater resources in the areas of the business offering the most significant return on investment potential, while leveraging strengths across its retail banners and increasing efficiencies.

The actions being announced for the North American business today include:

  • Establishing new Centers of Excellence for the Customer Relationship Management, Creative, and Human Resources functions, complementing existing Centers of Excellence some of which include: Digital, Information Technology, Legal, Logistics, and Real Estate;
  • Consolidating key business functions to enable more productive and efficient operations and refocus resources on customer-facing aspects of the business;
  • Implementing substantial technology enhancements and accelerating the consolidation to one common platform across Company banners, under the leadership of newly hired executives Janet Schalk, Chief Information Officer, and Dion Rooney, Executive Vice President, HBC Digital; and
  • Aligning resources in business functions to match current and future business strategy while investing in areas that will drive growth.

Richard Baker, HBC’s Governor and Executive Chairman, commented, “Through organic growth and acquisitions, HBC has established itself as one of the fastest-growing department store retailers in North America and a truly unique global company. This significant growth has created meaningful opportunities for us to further build our business while operating even more effectively. To that end, we are focused on taking the appropriate next steps to position HBC to deliver continued industry-leading performance and long-term growth, while best delivering for our customers in a constantly evolving industry environment.”

Jerry Storch, CEO of HBC, continued, “By enabling our teams to work smarter, faster and more effectively, we expect to achieve substantial cost savings and continue to invest in our core strategies to build our business, drive further improved financial performance and support the long-term vision of HBC. We have an enormously talented team in place, and will continue to build our world-class capabilities.”

The actions announced today are expected to result an annualized cost savings and synergies during fiscal year 2016 totaling $75 million, in addition to the previously announced synergies the Company is on track to achieve in connection with the integration of Saks Incorporated. The Company anticipates taking a charge of approximately $20 million in the third quarter of fiscal year 2015 in connection with the realignment.

Since the Company’s 2013 acquisition of Saks Incorporated, it has hired more than 2,000 Associates in connection with new store growth and the expansion of the digital offering across its store banners. As that integration has proceeded, the organization has been positioned to operate more efficiently. Consequently, the realignment announced today includes a reduction in positions at headquarters and in corporate functions across HBC’s store banners, impacting approximately 265 Associates in North America. Affected Associates will receive a severance package and outplacement support to help ease their transition and will be considered for open positions with HBC as appropriate.

The benefits from the realignment will support HBC’s overarching growth strategies, including continuing to strengthen its digital capabilities and all-channel offering, while enhancing store environments across the Company’s banners through renovations and strategic merchandising initiatives. In addition, the Company will be investing in store growth in 2016, including the opening of seven Saks Fifth Avenue locations and 25 OFF 5TH locations, in part through the expansion of both banners into Canada.

“Overall, we are excited about the great opportunities that lie ahead and believe that our new North American structure puts us in an even better position for the future. As we move forward, we are ever mindful of HBC’s Core Values and Winning Ways, including being passionate about our future, acting with integrity in all we do, and building world-class teams,” Mr. Storch said.

About Hudson’s Bay Company
Hudson’s Bay Company, founded in 1670, is North America’s longest continually operated company. Today, HBC offers customers a range of retailing categories and shopping experiences primarily in the United States and Canada. Our leading banners – Hudson’s Bay, Lord & Taylor, Saks Fifth Avenue and Saks Fifth Avenue OFF 5TH – offer a compelling assortment of apparel, accessories, shoes, beauty and home merchandise. Hudson’s Bay is Canada’s most prominent department store with 90 full-line locations, two outlet stores and thebay.com. Lord & Taylor operates 50 full-line locations primarily in the northeastern and mid-Atlantic U.S., four Lord & Taylor outlet locations and lordandtaylor.com.Saks Fifth Avenue, one of the world’s pre-eminent luxury specialty retailers, comprises 38 U.S. stores, five international licensed stores and saks.com. OFF 5TH offers value-oriented merchandise through 86 U.S. stores and saksoff5th.com. Home Outfitters is Canada’s largest kitchen, bed and bath specialty superstore with 66 locations. Hudson’s Bay Company trades on the Toronto Stock Exchange under the symbol “HBC”.

Forward-Looking Statements

Information in this press release that is not current or historical factual information may constitute forward-looking information within the meaning of securities laws, including statements regarding the Company’s North American realignment plan that is expected to result in $75 million of annualized cost savings and synergies in fiscal 2016, the benefits expected to be realized from such realignment plan, and the Company being on track to achieve $100 millionin synergies related to the integration of Saks Incorporated. This information is based on certain current assumptions regarding expected growth, results of operations, performance, and business prospects and opportunities. While the Company considers these assumptions to be reasonable, based on information currently available, they may prove to be incorrect. Forward-looking information is subject to a number of risks, uncertainties and other factors that could cause actual results to differ materially from what the Company currently expects. These risks, uncertainties and other factors include, but are not limited to: ability to execute retailing growth strategies, ability to continue same store sales growth, changing consumer preferences, marketing and advertising program success, damage to brands and dependence on vendors, ability to realize synergies and growth from the Saks acquisition, ability to make successful acquisitions and investments, constating documents discouraging favorable takeover attempts, successful inventory management, loss or disruption in centralized distribution centers, ability to upgrade and maintain our information systems to support the organization and protect against cyber-security threats, privacy breach, risks relating to our size and scale, loss of key personnel, ability to attract and retain qualified employees, deterioration in labour relations, ability to maintain pension plan surplus, funding requirement of Saks pension plan, limits on insurance policies, loss of intellectual property rights, insolvency risk of parties which we do business with or their unwillingness to perform their obligations, exposure to changes in the real estate market, successful operation of the joint ventures to allow us to realize the anticipated benefits, loss of flexibility with respect to properties in the joint ventures, the possibility that the anticipated benefits from the Galeria Holding acquisition cannot be realized, exposure to environmental liabilities, liabilities associated with Target Corporation, changes in demand for current real estate assets, increased competition, change in spending of consumers, international operational risks, fluctuations in the U.S. and Canadian dollars, increase in raw material costs, seasonality of business, extreme weather conditions or natural disasters, ability to manage indebtedness and cash flow, risks related with increasing indebtedness, restrictions of existing credit facilities reducing flexibility, ability to maintain adequate financial processes and controls, ability to maintain dividends, ability of a small number of shareholders to influence the business, uncontrollable sale of the Company’s common shares by significant shareholders could affect share price, increase in regulatory liability, increase in product liability or recalls, increase in litigation, developments in the credit card and financial services industries, other risks inherent to our business and/or factors beyond our control which could have a material adverse effect on us.

HBC cautions that the foregoing list of important factors and assumptions is not exhaustive and other factors could also adversely affect its results. For more information on the risks, uncertainties and assumptions that could cause HBC’s actual results to differ from current expectations, please refer to the “Risk Factors” section of HBC’s Annual Information Form dated April 30, 2015, HBC’s second quarter Management Discussion & Analysis dated September 10, 2015, as well as HBC’s other public filings, available at www.sedar.com and at www.hbc.com.

The forward-looking statements contained in this news release describe HBC’s expectations at the date of this news release and, accordingly, are subject to change after such date. Except as may be required by applicable Canadian securities laws, HBC does not undertake any obligation to update or revise any forward-looking statements contained in this news release, whether as a result of new information, future events or otherwise. Readers are cautioned not to place undue reliance on these forward-looking statements.

MEDIA CONTACT:
Hudson’s Bay Company
Tiffany Bourré, 905-595-7184
Director, External Communications
tiffany.bourre@hbc.com
or
INVESTOR RELATIONS:
416-256-6745
investorrelations@hbc.com

Source: Hudson’s Bay Company

News Provided by Acquire Media

Hudson’s Bay Company announces the appointment of Janet Schalk to Chief Information Officer

TORONTO, 2015-8-21— /EPR Retail News/ — Hudson’s Bay Company (“HBC”) (TSX:HBC) is pleased to announce the appointment of Janet Schalk to Chief Information Officer. In this role, Ms. Schalk will be responsible for leading the information technology strategy for HBC, while continuing to drive the Company’s roadmap of common systems, integrated support, business architecture and analytics. Ms. Schalk brings more than 10 years of senior leadership experience in the information technology field and is a recognized leader in innovation and emerging technologies, with a strong foundation in customer service.

“Janet is a proven leader, and her success in creating a strategic information technology function that drives customer engagement across all channels will be critical in advancing HBC’s IT systems and supporting the Company’s growth,” stated Jerry Storch, Chief Executive Officer, Hudson’s Bay Company. “We look forward to welcoming Janet to HBC and moving ahead with our plans for innovation and growth.” Ms. Schalk joins HBC’s Executive Leadership Team and will report directly to the Office of the Chairman, comprising Richard Baker, Chairman and Governor, and Jerry Storch, CEO.

Prior to joining HBC, Ms. Schalk served as Executive Vice President and CIO for Kohl’s. Previous to Kohl’s, Ms. Schalkspent four years as EVP and head of Global IT for Target Corporation.

Ms. Schalk holds an MBA from the University of Chicago Graduate School of Business and a Bachelor of Arts degree in Mathematics and Economics from Northwestern University.

About Hudson’s Bay Company
Hudson’s Bay Company, founded in 1670, is North America’s oldest company. Today, HBC offers customers a range of retailing categories and shopping experiences primarily in the United States and Canada. Our leading banners -Hudson’s Bay, Lord & Taylor, Saks Fifth Avenue and Saks Fifth Avenue OFF 5TH – offer a compelling assortment of apparel, accessories, shoes, beauty and home merchandise. Hudson’s Bay is Canada’s most prominent department store with 90 full-line locations, two outlet stores and thebay.com. Lord & Taylor operates 50 full-line locations primarily in the northeastern and mid-Atlantic U.S., four Lord & Taylor outlet locations and lordandtaylor.com. Saks Fifth Avenue, one of the world’s pre-eminent luxury specialty retailers, comprises 38 U.S. stores, five international licensed stores and saks.com. OFF 5TH offers value-oriented merchandise through 85 U.S. stores and saksoff5th.com. The Company also operates Home Outfitters, Canada’s largest kitchen, bed and bath specialty superstore with 67 locations. Hudson’s Bay Company trades on the Toronto Stock Exchange under the symbol “HBC”.

Media Contact:
Hudson’s Bay Company
Tiffany Bourré, 905-595-7184
Director, External Communications
tiffany.bourre@hbc.com
or
Investor Relations:
416-256-6745
investorrelations@hbc.com

Source: Hudson’s Bay Company