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’s New President of Hudson’s Bay Has 30 Years Experience in Canadian Retail Market

HBC’s New President of Hudson’s Bay Has 30 Years Experience in Canadian Retail Market

 

Hudson’s Bay Executive with More Than 30 Years of Experience in the Canadian Retail Market to Lead the Country’s Most Iconic Retailer

TORONTO, 2017-Jun-12 — /EPR Retail News/ — HBC today (June 8, 2017) announced that Alison Coville has been named President of Hudson’s Bay. Ms. Coville will lead a dedicated management team responsible for directing operations for Hudson’s Bay and Home Outfitters in Canada. This dedicated leadership structure will better position the banner to drive performance in Canada, which has consistently been one of the Company’s strongest markets. Ms. Coville will report to Jerry Storch, Chief Executive Officer, HBC.

“Within HBC’s global footprint, Canada is such an important and indelible part of our story and growth strategy. There are countless opportunities for us to continue to build on the solid platform that has been established to innovate and evolve the Hudson’s Bay experience for our customers,” said Richard Baker, Governor and Executive Chairman, HBC. “Alison has a deep understanding of the Hudson’s Bay customer and will help push innovation and build the Hudson’s Bay experience online and in stores to drive us to the future.”

“Alison is a seasoned professional with more than 30 years of experience in Canadian retail, nearly two decades of which has been spent at HBC. She has proven herself to be a dedicated leader with great intuition and knowledge of the market and sector. I believe her track record, keen insight, and bold vision make her the ideal leader to drive our strategy forward and accelerate our growth plans for Hudson’s Bay,” said Jerry Storch.

“I am honored to assume this position at Hudson’s Bay, where I have had the opportunity to build my career in an exceptional market with incredible colleagues,” said Ms. Coville. “I look forward to working with the Hudson’s Bay and Home Outfitter teams to accelerate our growth, while providing our loyal customers with a seamless shopping experience.”

Ms. Coville has held leadership positions in merchandising with HBC since 2005, in almost every area of the business including women’s, accessories, cosmetics, home and men’s. She has been instrumental in developing strategies to improve sales and profit.

Prior to joining HBC in 1999 as a Divisional Merchandise Manager, Ms. Coville worked at T. Eaton Company, where she progressed through the organization in multiple functions and executive roles including Buying, Store Planning, Marketing, and National Sales Management.

Liz Rodbell, who has split her time between Canada and the U.S. for five years, and served as president of Hudson’s Bay and Lord & Taylor for the past three years, continues in her role as President of Lord & Taylor. She will now be fully focused on leading that U.S. banner, together with a dedicated management team. The new streamlined organization, coupled with changes at the store operations level, will increase the pace of change at Lord & Taylor with an emphasis on driving digital opportunities at the banner while operating its stores more efficiently.

Jerry Storch continued, “Liz is a strong leader at HBC who has made a mark on Hudson’s Bay over the last five years. Liz’s vision for the future of retail has helped steer the business, and she truly understands our customer. With more than 30 years at Lord & Taylor, Liz is uniquely positioned to continue to lead the banner through its evolution and drive its digital strategy. We are grateful to Liz for her leadership and many contributions.”

These leadership changes are effective today.

About Hudson’s Bay

Hudson’s Bay Company, incorporated in 1670, is North America’s oldest company. Hudson’s Bay has grown to become Canada’s most prominent department store, today operating 90 full-line locations and thebay.com. For the first time since the banner’s inception, Hudson’s Bay will open outside of Canada with 10 new stores in the Netherlands in 2017, and an online shopping destination at hudsonsbay.nl. This expansion will introduce a new and exciting shopping experience in the Netherlands, catering to the Dutch market. Hudson’s Bay has established a reputation for quality, service, and style by offering well-edited assortments of exclusive and popular fashion, beauty, home and accessory designers and brands, as well as exclusive food concepts. It is part of the Hudson’s Bay Company brand portfolio.

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.

Media Contact:
Andrew Blecher
646-802-4030
andrew.blecher@hbc.com

Tiffany Bourré
905-595-7184
tiffany.bourre@hbc.com

Source: HBC

###

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 Chief Financial Officer Paul Beesley to leave the company

TORONTO & NEW YORK, 2017-May-03 — /EPR Retail News/ — HBC or the “Company” (TSX: HBC) today (May 2, 2017) announced that the company’s Chief Financial Officer, Paul Beesley, has made the decision to resign in early July in order to return home to Canada to be closer to his family. Mr. Beesley will continue in his role over the next two months to ensure a smooth transition. The Company has engaged a leading executive search firm to assist in recruiting a new CFO.

Mr. Beesley moved to New York to join HBC as CFO in May 2014. During his tenure, the Company has formed two real estate joint ventures with leading partners in the U.S. and Canada, expanded its revolving credit facilities to include operations across four countries, obtained a US $1.25 billion 20 year fixed rate mortgage on its Saks flagship property, and undertaken various other transactions to lower financing costs and reduce interest rate risk.

“Paul has made many contributions to HBC during his tenure, including significantly strengthening the Company’s capital structure,” said Jerry Storch, CEO of HBC. “In addition, he was instrumental in the implementation of the Company’s growth and acquisition strategy. We thank Paul for his contributions and wish him much happiness and success in his next endeavour.”

Paul Beesley commented: “I’ve had a very rewarding experience at HBC, and am proud of the work we have undertaken to position the Company for the future. HBC is a best-in-class retailer, and I will continue to follow the company closely after my departure. I am looking forward to returning to Canada this summer to be with my family.”

Mr. Beesley’s last day with HBC is July 7, 2017.

About HBC
Hudson’s Bay Company is one of the fastest-growing department store retailers in the world, based on its successful formula of growing through acquisitions, driving the performance of high quality stores and their all-channel offerings and unlocking the value of real estate holdings.

Founded in 1670, HBC is the oldest company in North America. HBC’s portfolio today includes ten banners, in formats ranging from luxury to premium department stores to off price fashion shopping destinations, with more than 480 stores and 66,000 employees around the world.

In North America, HBC’s leading banners include Hudson’s Bay, Lord & Taylor, Saks Fifth Avenue, Gilt, and Saks OFF 5TH, along with Home Outfitters. In Europe, its banners include GALERIA Kaufhof, the largest department store group in Germany, Belgium’s only department store group Galeria INNO, as well as Sportarena.

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.

SOURCE: Hudson’s Bay Company

INVESTOR RELATIONS:
Hudson’s Bay Company
Elliot Grundmanis, 646-802-2469
elliot.grundmanis@hbc.com
or
MEDIA CONTACT:
Andrew Blecher, 646-802-4030
andrew.blecher@hbc.com

News Provided by Acquire Media

Hudson’s Bay Company announces the appointment of Dr. Wolfgang Link as CEO of HBC Europe

Dr. Link to establish and drive European strategy including direction of HBC’s €1 billion capital commitment in Germany

TORONTO & NEW YORK & COLOGNE, Germany, 2017-Apr-07 — /EPR Retail News/ — Hudson’s Bay Company (TSX: HBC) today (April 6, 2017) announced the appointment of Dr. Wolfgang Link as Chief Executive Officer of HBC Europe, effective May 1, 2017. Dr. Link will lead the company’s expansion and growth strategy for the European business including Galeria Kaufhof, Galeria Inno, and the entrance of Hudson’s Bay and Saks OFF 5TH. Reporting to HBC’s Chief Executive Officer, Jerry Storch, Dr. Link will oversee the European management team.

Jerry Storch, HBC’s CEO, stated: “We are pleased to welcome Wolfgang to the HBC family during this new phase of development for our European business, as we prepare to launch two new banners in the region. Wolfgang is an accomplished leader with a proven track record in the retail sector in Germany and throughout Europe. His experience in both digital and traditional channels and profound knowledge of the European market were key in selecting him for this role, and will help foster the expansion and success of HBC Europe, including our significant investment in Germany.”

Richard Baker, Governor and Executive Chairman of HBC, said: “We are committed to our long term strategy in Europe and to the €1 billion capital investment over five to seven years in Germany that we previously announced. Building on the excellent market position of Galeria Kaufhof in Germany and of Galeria Inno in Belgium, we have laid the foundation for expansion in the region. I am pleased to welcome Dr. Wolfgang Link to take our HBC Europe business to the next level.”

Dr. Wolfgang Link commented: “It is an honor for me to join HBC, a proven global leader known for best-in-class retail with exceptional banners. Among Germans, Galeria Kaufhof is the epitome of a great department store, and the same is true in Belgium of Galeria Inno. With the introduction of Saks OFF 5TH in Germany, and both Hudson’s Bay and Saks OFF 5TH in the Netherlands, exciting steps are ahead of us. I look forward to working with the strong HBC Europe management team.”

Dr. Link will join HBC after a decade with Toys”R”Us, where he served as a member of the global executive board and President of Toys”R”Us Europe since 2013. In that role, he was responsible for the company’s business operations in nine countries, including Germany, France, Spain the UK and the Netherlands, with more than 300 stores across Europe as well as country-specific online stores. Before joining Toys”R”Us in 2007 as President, Central Europe, Dr. Link served as Managing Director for the MEDIMAX specialist stores and ElectronicPartner Group Holdings, where he was responsible for the operation of more than 200 specialty stores in Germany, Hungary and Turkey. In addition, Dr. Link served many years in a variety of leadership roles at the METRO Cash and Carry Group, in corporate headquarters in Dusseldorf and in the country business units in Austria and Spain.

Don Watros, President of HBC International, will remain head of the Galeria Kaufhof Supervisory Board and will continue to pursue international opportunities in addition to supporting the company’s North American integration and cost saving initiatives.

Olivier Van den Bossche will be leaving HBC Europe at the end of April to pursue other opportunities.

“We appreciate Olivier’s work to build HBC’s presence in Europe and support the integration of Galeria Kaufhof and Galeria INNO to our business. In addition, he has helped lay the foundation for Hudson’s Bay and Saks OFF 5TH to enter Europe. We wish him the best in his next endeavor,” said Don Watros.

“I have enjoyed working with Olivier both professionally and personally. He is an excellent retailer who has made an indelible mark on our business,” said Jerry Storch.

About Hudson’s Bay Company

Hudson’s Bay Company is one of the fastest-growing department store retailers in the world, based on its successful formula of growing through acquisitions, driving the performance of high quality stores and their all-channel offerings and unlocking the value of real estate holdings. Founded in 1670, HBC is the oldest company in North America. HBC’s portfolio today includes ten banners, in formats ranging from luxury to premium department stores to off price fashion shopping destinations, with more than 480 stores and 66,000 employees around the world.

In North America, HBC’s leading banners include Hudson’s Bay, Lord & Taylor, Saks Fifth Avenue, Gilt, and Saks OFF 5TH, along with Home Outfitters. In Europe, its banners include GALERIA Kaufhof, the largest department store group in Germany, Belgium’s only department store group Galeria INNO, as well as Sportarena.

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 CONTACT:
Hudson’s Bay Company
Andrew Blecher
212-391-3179
Andrew.blecher@hbc.com

Hudson’s Bay Company
Jen Vargas
646-634-6863
Jen.Vargas@hbc.com

FOR THE GERMAN MEDIA:
HBC Europe / GALERIA Kaufhof
Steffen Kern
+49 221 2235595
presse@kaufhof.de

Hering Schuppener Consulting
Dirk von Manikowsky
+49 211 430 79-265
hbc@heringschuppener.com

Source: Hudson’s Bay Company

Hudson’s Bay Company announces 2.5% retail sales increase to $4.6 billion in 4Q Fiscal 2016

  • Fourth Quarter retail sales increased 2.5% to $4.6 billion
  • Fourth Quarter comparable digital sales increased 13.3% on a constant currency basis, up 20.9% at HBC’s department store banners
  • Fourth Quarter Adjusted EBITDAR of $564 million and Adjusted EBITDA of $404 million
  • Full year Adjusted EBITDAR and Adjusted EBITDA consistent with recent guidance
  • Fourth Quarter net loss of $152 million, which includes a one-time non-cash goodwill impairment charge of $116 million; Prior year quarter included $333 million in net gains related to the sale of investments in joint ventures, which contributed to net earnings of $370 million in that period
  • $75 million in annualized savings expected from initiative announced as part of the Company’s ongoing comprehensive operational review

TORONTO & NEW YORK & COLOGNE, Germany, 2017-Apr-06 — /EPR Retail News/ — Hudson’s Bay Company (“HBC” or the “Company”) (TSX: HBC) today (April 4, 2017) announced its fourth quarter financial results for the thirteen and fifty-two week periods ended January 28, 2017. 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).

“In 2016 we took important steps to position all of our businesses for industry leadership. Our team remains focused on our all-channel model, anticipating our customers’ evolving needs and adapting to our customers’ expectations both in store and online. We executed on the organic growth of our existing store base and substantially increased our investment in digital. I am very proud of the hard work and dedication of all of our associates, who continue to focus on what matters most: our customers. We believe our winning model of combining world class real estate assets, which are less impacted by short-term trends, with our diverse retail businesses will continue to provide value for the Company and our shareholders.” stated Richard Baker, HBC’s Governor and Executive Chairman.

Jerry Storch, HBC’s Chief Executive Officer, added, “The past year was a disruptive one for the retail industry. While the department store sector remains challenging, we are taking decisive action and making the tough decisions to ensure continued performance should the current environment persist. We are cutting expenses, rationalizing and reallocating our capital spending, strengthening our balance sheet, and taking other necessary actions. Rest assured, as we remain focused on the continued growth of our Company, we are aggressively positioning HBC to adapt to the changing retail environment.”

Key actions:

  • Cutting expenses: Recently announced efficiency measures are expected to save $75 million on an annualized basis, and management continues to work diligently to reduce overhead further and generate additional savings while continuing to focus on our customers. HBC is currently engaged in a cross-banner review of productivity enhancements designed to make improvements in the Company’s operating model and to optimizing in-store operations, and expects to provide additional details on the progress of these initiatives in due course.
  • Rationalizing and reallocating capital spend: Net capital investments in Fiscal 2017 are expected to be between $450 million and $550 million, approximately $150 million less than Fiscal 2016. The Company’s capital investments in Fiscal 2017 will focus on in-progress and expected high-return projects, including growth in Europe and ongoing renovation programs across the world.
  • Strengthening the balance sheet: HBC took advantage of favourable lending conditions during the year to refinance its mortgage on the Lord & Taylor flagship and reduce the interest rate on its term loan. The Company ended the year with approximately the same amount of total debt on its balance sheet as at the beginning of Fiscal 2016.
  • Other actions: As part of the ongoing review of the businesses, the Company took the necessary step of writing down the goodwill associated with HBC’s Off Price business, though management still believes that both Saks OFF 5TH and Gilt have strong strategies in place with potential to generate long term profitable growth. In addition to focusing on a more elevated merchandise mix at Saks OFF 5TH, the Company expects to combine the inventory at Saks OFF 5TH and Gilt by the end of the year, allowing Saks OFF 5TH merchandise to be sold online through Gilt. At Hudson’s Bay and Lord & Taylor, the Company is growing key product categories such as active, dress and home. Initiatives in Europe include new brand additions and merchandising improvements at GALERIA Kaufhof, as well as the introduction of Saks OFF 5TH and Hudson’s Bay. Finally, Saks Fifth Avenue is expected to benefit from ongoing growth of digital and the introduction of buy online pickup in store later in the fall.

Fourth Quarter Summary

All comparative figures below are for the thirteen week period ended January 28, 2017 compared to the thirteen week period ended January 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 Sportarenabanners. HBC Off Price refers, collectively, to the Saks Fifth Avenue OFF 5TH (“Saks OFF 5TH”) and Gilt banners.

HBC has now anniversaried the acquisition of HBC Europe, as well as the formation of the real estate joint ventures. Accordingly, reported results for the fourth quarter are largely comparable to the previous year, excluding the impact of the Gilt acquisition which closed on February 1, 2016, the beginning of Fiscal 2016.

Retail sales were $4,600 million, an increase of $114 million, or 2.5%, from the prior year. The increase was primarily driven by the addition of Gilt, which generated $177 million in sales during the quarter, as well as the addition of five Saks Fifth Avenue and 32 Saks OFF 5TH stores, which contributed a total of $123 million in sales during the quarter. These additions were partially offset by the combination of a negative $110 million foreign exchange impact on the translation of U.S. dollar and Euro denominated sales and lower comparable sales of approximately $42 million at the Company as a whole.

On a constant currency basis, comparable sales grew by 0.6% at DSG and 0.1% at Saks Fifth Avenue, offset by declines of 2.0% at HBC Europe and 5.9% at HBC Off Price, resulting in an overall consolidated comparable sales decline of 1.2%. Comparable sales during the quarter were impacted by a highly promotional environment across HBC’s markets. Additionally, sales at Gilt continue to be impacted by lower traffic, while Saks OFF 5TH has experienced lower sales driven in part by the decision to introduce more moderately priced apparel during Fiscal 2016. 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 its offering range, which is expected to drive increased traffic and conversion as well as a higher overall basket size. This updated product mix is expected to be fully implemented by the third quarter of Fiscal 2017.

Digital sales increased by 52.8% from the prior year, and comparable digital sales on a constant currency basis increased by 13.3%. Excluding Gilt, comparable digital sales on a constant currency basis increased by 20.9%, reflecting the Company’s continued strategic focus on growing this channel.

For HBC overall, gross profit1 as a percentage of retail sales was 40.2%, which improved by 50 basis points compared to the prior year. After adjusting for the $69 million impact associated with the amortization of inventory related purchase accounting adjustments in the prior year, gross profit as a percentage of retail sales declined by 110 basis points. Reduced gross profit rates were the result of lower gross margins realized in the majority of HBC banners, largely driven by the highly promotional environment experienced during the quarter.

SG&A expenses were $1,669 million compared to $1,499 million in the prior year. The increase is primarily attributable to non-cash impairment charges of $150 million and the addition of Gilt, which added $77 million in SG&A during the quarter, as well as a reduction in the Company’s ownership in its real estate joint ventures, which resulted in a $10 million increase in net rent expense. Moreover, the shift to digital sales from traditional in-store sales during the quarter further contributed to higher SG&A expenses as a result of higher fulfillment costs. 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.

These SG&A expense increases were partially offset by a decrease in non-recurring charges of $52 million, a $43 million favourable foreign exchange impact related to the translation of U.S. dollar and Euro denominated SG&A expenses.

Fourth quarter results include a non-cash goodwill impairment charge of $116 million related to HBC Off Price. This charge was driven by recent sales weakness at Gilt and Saks OFF 5TH as described above, which resulted in management prudently lowering its future earnings expectations as compared to initial internal estimates.

Notwithstanding this charge, management continues to believe that both Saks OFF 5TH and Gilt have strong strategies in place with the potential to generate long term profitable growth for the Company. The acquisition of Gilt continues to provide HBC with best in class digital capabilities and a strong online presence with the millennial audience. The Company expects to combine the inventory at Saks OFF 5TH and Gilt by the end of the year, allowing Saks OFF 5TH merchandise to be sold online through Gilt. To improve the customer experience at HBC Off Price, the Company is working on a number of other initiatives, including: expanded brand partnerships; refocusing on higher end core offerings; and, the ongoing roll out of technology enhancements related to enhanced website navigation, personalization and delivery options.

Adjusted SG&A1 expenses were $1,442 million or 31.3% of retail sales, compared to $1,372 million or 30.6% in the prior year. The increase in SG&A expenses is primarily attributable to the addition of Gilt, the reduction in the Company’s ownership in its real estate joint ventures, and the shift of in-store sales to online sales as described above. Partially offsetting this increase was a favourable foreign exchange impact of $38 million related to the translation of U.S. dollar and Euro-denominated SG&A expenses. These factors, combined with the impacts associated with lower than expected comparable sales, resulted in an increased SG&A expense rate.

Adjusted EBITDAR1 was $564 million, a decrease of 9.9% compared to $626 million in the prior year. The decline in Adjusted EBITDAR1 can be primarily attributed to an increase in Adjusted SG&A1 expenses as discussed above, combined with relatively flat gross profit dollars after excluding the impacts of purchase price accounting adjustments in the prior year.

Adjusted EBITDA1 was $404 million, a decrease of $51 million compared to $455 million in the prior year. This decline is largely consistent with the decline in Adjusted EBITDAR1, offset by a smaller cash impact from the Company’s joint ventures resulting from the distribution during the quarter of excess funds that had been reserved to pay taxes in Germany. HBS Global Properties expects to begin paying cash taxes in 2018, and will set aside approximately EUR 1.5 million per month beginning in July of 2017 for future amounts owed.

Net loss was $152 million compared to net earnings of $370 million in the prior year. This loss was driven in part by the impairment charges described above which had a combined after tax impact of $136 million. Additionally, prior year earnings included net of tax gains of $333 million on the sale of investments in the joint ventures and $27 million on contribution of assets to the joint ventures. Normalized Net Earnings1 were $2 million compared to $145 million in the prior year. This decrease is primarily a result of higher Adjusted SG&A1, as described above, as well as increased depreciation and amortization expenses.

During the quarter the Company completed its purchase price allocation for Gilt. This included finalization of the amortization methodology related to customer lists. As a result, amortization expense in the quarter reflects a cumulative adjustment of approximately $37 million.

Finance costs were $43 million compared to $60 million in the prior year. This decrease was largely driven by a $32 million reduction in the write-off of deferred financing costs compared to the prior year, during which the Company repaid U.S. $585 million on its term loan. This reduction was partially offset by lower non-cash finance income generated from mark-to-market adjustments associated with the valuation of outstanding common share purchase warrants. Interest paid in cash was $46 million compared to $40 million in the prior year.

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

Year-to-Date Summary

All comparative figures below are for the fifty-two week period ended January 28, 2017 compared to the fifty-two week period ended January 30, 2016.

Retail sales were $14.5 billion, an increase of 29.5% from the prior year. Approximately $3 billion of this increase is related to the addition of HBC Europe and Gilt during the year. The remainder of the increase has been driven by the opening of five Saks Fifth Avenue and 32 Saks OFF 5TH stores during the year which contributed $320 millionin sales. There was also an additional $26 million positive foreign exchange impact on the translation of U.S. dollar and Euro denominated sales. These positive sales impacts were partially offset by lower overall comparable sales of approximately $164 million.

Consolidated comparable sales at the Company decreased by 0.7%. On a constant currency basis, comparable sales grew 0.4% at DSG, offset by declines of 1.2% at HBC Europe, 2.8% at Saks Fifth Avenue, and 7.4% at HBC Off Price, resulting in an overall consolidated comparable sales decline of 1.7%. Comparable sales during the year were impacted by a highly promotional environment across HBC’s markets. Additionally, sales at Gilt continue to be under pressure, while Saks OFF 5TH has experienced lower sales driven in part by the decision to introduce more moderately priced apparel during Fiscal 2016.

Digital sales increased by 69.6% from the prior year, and comparable digital sales on a constant currency basis increased by 8.1%. Excluding Gilt, comparable digital sales on a constant currency basis increased by 16.6%.

For HBC overall, gross profit1 as a percentage of retail sales was 41.3%, 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. The positive impact associated with HBC Europe was offset by lower realized gross margins at the majority of HBC’s other banners.

SG&A expenses were $5,692 million compared to $4,066 million in the prior year, primarily as a result of the addition of HBC Europe and Gilt, which drove approximately $1.5 billion of this increase. Additionally, non-cash impairment charges increased by $174 million, which includes impairment on goodwill as described above, and net rent expense related to the Company’s joint ventures increased by $127 million. These increases were partially offset by gains on sale of assets of $33 million, a decline in other non-recurring expenses of $19 million, an $11 million favorable exchange rate impact related to the translation of U.S. dollar and Euro denominated SG&A expenses.

Adjusted SG&A1 expenses were $5,275 million or 36.5% of retail sales, compared to 33.9% in the prior year. This rate increase was primarily driven by the addition of HBC Europe and Gilt as discussed above, as well as lower comparable sales at the Company as a whole. The impact of net rent expense to the joint ventures was $164 millionfor the fifty-two week period ended January 28, 2017, compared to $37 million for the fifty-two week period ended January 30, 2016. Adjusting for this impact, Adjusted SG&A1 as a percentage of retail sales is 35.4% for the fifty-two week period ended January 28, 2017 compared to 33.5% for the fifty-two week period ended January 30, 2016.

Adjusted EBITDAR1 was $1,353 million, an increase of 12.8% compared to $1,200 million in the prior year, primarily as a result of the increase in gross profit dollars compared to the prior year offset by an increase in Adjusted SG&A1expenses as discussed above.

Adjusted EBITDA1 was $636 million, compared to $781 million in the prior year. The joint ventures had a $227 million impact on Adjusted EBITDA1 in Fiscal 2016, compared to a $76 million impact in the prior year. This increased joint venture impact, plus the rent expense associated with addition of HBC Europe and Gilt, drove the majority of the decline in Adjusted EBITDA1 relative to Adjusted EBITDAR1.

Net loss was $516 million compared to net earnings of $387 million in the prior year. Prior year earnings include total after tax gains of $565 million related to the joint ventures, compared to $44 million in the current year. Fiscal 2016 earnings also include after tax impairment expenses of $150 million compared to nothing in the prior year. Normalized Net Loss1 was $313 million compared to earnings of $55 million in the prior year, primarily driven by lower Adjusted EBITDA1, the non-cash goodwill impairment charge outlined above, as well as increased depreciation and amortization expense.

Finance costs were $192 million compared to $188 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, offset by a reduction in the write-off of deferred financing costs. Interest paid in cash was $173 million, a $26 million increase over the prior year.

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

Inventory

Inventory at the end of the fourth quarter decreased by $28 million compared to the prior year. This decrease was driven by foreign exchange movements and lower overall inventory at Saks Fifth Avenue, despite the opening of new stores. These decreases were partially offset by the acquisition of Gilt and slightly higher inventories at HBC Europe, Saks OFF 5TH and DSG. The increase in inventory at Saks OFF 5TH was driven predominantly by the opening of new stores.

Store Network

During the fourth quarter, the Company opened one Saks Fifth Avenue store in Miami, Florida, as well as one Saks OFF 5TH store in Braintree, Massachusetts. The Company closed two Saks OFF 5TH stores located in Folsom, California and Kansas City, Kansas, one GALERIA Kaufhof store in Karlsruhe, Germany and three Home Outfitters stores located in Calgary, Alberta; Edmonton, Alberta and Langford, British Columbia

Capital Investments

Capital investments, net of landlord incentives, during the fourth quarter totaled $165 million, compared to $116 million in the prior year. During the quarter the Company opened one Saks OFF 5TH store and one Saks Fifth Avenue store, both in the U.S. Additionally, the Company completed the renovation of its Garden City Lord & Taylor store, began work on its Hudson’s Bay store in Quebec City, and signed an agreement to install robotic fulfillment technology in its Pottsville, Pennsylvania distribution centre. In Europe, HBC completed work on Germany’s first Top Shop store within a store concept at the GALERIA Kaufhof in Berlin, and made progress on its renovation program at its Düsseldorf and Frankfurt stores. Work also continued on the major renovation at the Saks Fifth Avenue flagship store on 5th Avenue in New York.

The Company is dedicated to prudent capital management, and given the current retail environment, is focusing its capital investment program on in-progress and expected high-return projects. HBC currently expects total capital investments in Fiscal 2017, net of landlord incentives, to be between $450 million and $550 million. Gross capital investment is expected to be between $1,025 million and $1,125 million. Of this gross amount, approximately $800 million is related to growth initiatives, with the remainder allocated towards maintenance projects. The Company remains focused on creating a best in class all-channel shopping experience, and will continue to invest in growth initiatives. This includes the Company’s expansion of its Hudson’s Bay banner into the Netherlands, the ongoing renovation of its Aachen, Düsseldorf, and Frankfurt stores in Germany, and the installation of automated fulfillment technology at the Pottsville distribution centre. Other areas of focus include store renovations in North America, the continued expansion of Saks OFF 5TH in the U.S., Canada and Germany, as well as the build out of increased all-channel capabilities both online and in-store for Fiscal 2017.

The above capital investment expectations reflect exchange rate assumptions of USD:CAD = 1:1.34 and EUR:CAD = 1:1.43. Any variation in these foreign exchange rate assumptions and/or other material assumptions and factors described in the “Forward-Looking Statements” section of this press release could impact the above outlook.

Conference Call to Discuss Results

Richard Baker, HBC’s Governor and Executive Chairman, Jerry Storch, HBC’s Chief Executive Officer, and Paul Beesley, HBC’s Chief Financial Officer, will discuss the fourth quarter financial results and other matters during a conference call on April 5, 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.

Consolidated Financial Statements and Management’s Discussion and Analysis

The Company’s consolidated financial statements for the year ended January 28, 2017 and Management’s Discussion and Analysis (“MD&A”) thereon are available under the Company’s profile on SEDAR at www.sedar.com.

Consolidated Financial Information

The following tables set out summary consolidated financial information and supplemental information for the periods indicated. The summary financial information set out below for the quarters ended January 28, 2017 and January 30, 2016 has been prepared on a basis consistent with our audited annual consolidated financial statements for Fiscal 2016 and Fiscal 2015, respectively. In the opinion of the Company’s management, such unaudited financial data reflects all adjustments, consisting of normal and recurring adjustments, necessary for a fair presentation of the results for those periods. The results of operations for interim periods are not necessarily indicative of the results to be expected for a full year or any future period. The information presented herein does not contain disclosures required by IFRS and should be read in conjunction with the Company’s audited annual consolidated financial statements for Fiscal 2016.

About Hudson’s Bay Company

Hudson’s Bay Company is one of the fastest-growing department store retailers in the world, based on its successful formula of growing through acquisitions, driving the performance of high quality stores and their all-channel offerings and unlocking the value of real estate holdings. Founded in 1670, HBC is the oldest company in North America. HBC’s portfolio today includes nine banners, in formats ranging from luxury to premium department stores to off price fashion shopping destinations, with more than 480 stores and 66,000 employees around the world.

In North America, HBC’s leading banners include Hudson’s Bay, Lord & Taylor, Saks Fifth Avenue, Gilt, and Saks OFF 5TH, along with Home Outfitters. In Europe, its banners include GALERIA Kaufhof, the largest department store group in Germany, Belgium’s only department store group Galeria INNO, as well as Sportarena.

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 the Company’s operational review and potential additional productivity enhancements, management’s belief in the potential for HBC Off Price to generate long term capital growth, the benefits and timing for combining inventory at Saks OFF 5TH and Gilt by the end of the year and other integration initiatives, 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, 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, 2016, 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, except as required by applicable securities law. Readers are cautioned not to place undue reliance on these forward-looking statements.

INVESTOR RELATIONS:
Kathleen de Guzman
646-802-7070
kathleen.deguzman@hbc.com

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

Hudson’s Bay Company announces sales results for the nine week period ending December 31, 2016 and updates on Fiscal 2016 Outlook

TORONTO & NEW YORK, 2017-Jan-12 — /EPR Retail News/ — Hudson’s Bay Company (“HBC” or the “Company”) (TSX:HBC) today (January 9, 2017) announced its comparable sales results for the nine week period ending December 31, 2016, and provided an update on its financial outlook for Fiscal 2016.

Jerry Storch, Chief Executive Officer, HBC commented, “Our holiday sales trend improved considerably from what we experienced in the third quarter. On a constant currency basis, the comparable sales trend improved for the Company overall and across every banner, led by strong digital sales growth of 21.7% at our department store banners. However, the sales improvement that we experienced was not strong enough to achieve the results we had expected. Also, while we were pleased with our performance at Hudson’s Bay in Canada, the retail environment has remained challenging in the U.S. and Europe and the significant promotional activity during the holiday period had a negative impact on our margins. This margin pressure was compounded by a declining value of the Euro compared with the Canadian dollar which impacts our translated earnings from HBC Europe. As we head into the new fiscal year, we are focused on continuing to delight our customers with exclusive product offerings and custom all-channel shopping experiences, and by creating exciting retail destinations to increase foot traffic in our stores. The retail environment is clearly changing, and we continue to work diligently across all of our banners to adapt rapidly. This involves evaluating all opportunities to increase the profitability of HBC, and we expect to provide further details on this process in the coming months.”

Comprehensive operational review

HBC continues its focus on improving its business operations as it adapts to a changing retail environment. Late in 2016, the Company launched a comprehensive review of its business operations to identify efficiencies, streamline processes and improve back of store productivity, while also enhancing customer service. Management expects that these initiatives will provide opportunities to increase profitability while ensuring that the Company is prepared to meet the challenges of an evolving retail environment. Over the coming months, the Company expects to provide additional details as work progresses.

Comparable Sales

For the nine week period beginning October 30, 2016 and ending December 31, 2016(1)

  • On a constant currency basis, consolidated comparable sales decrease of 0.7%
    • DSG (Hudson’s Bay, Lord & Taylor and Home Outfitters) comparable sales increase of 1.2%
    • Saks Fifth Avenue comparable sales decrease of 0.5%
    • HBC Off Price (Saks OFF 5TH and Gilt) comparable sales decrease of 5.2%
    • HBC Europe (GALERIA Kaufhof, Galeria INNO and Sportarena) comparable sales decrease of 0.6%
  • Total digital sales, which include Gilt on a pro forma basis, increase of 14.7% on a constant currency comparable basis. Excluding Gilt, total digital sales increase of 21.7% on a constant currency comparable basis.
  • Including the impacts of foreign exchange, consolidated comparable sales decrease of 2.0%

(1) Comparable sales are a Non-IFRS Measure. For the definition of comparable sales results expressed on a constant currency comparable basis, see “Non-IFRS Measures” below.

Outlook

The following outlook is fully qualified by the “Forward-Looking Statements” section of this press release.

The Company’s previously disclosed Fiscal 2016 outlook was based on management’s expectations of flat to low single digit overall comparable sales growth, calculated on a constant currency basis, during the remainder of Fiscal 2016, which included the holiday selling period. Given the Company’s sales results for the holiday selling period and lower than expected gross margins realized to date during the fourth quarter, management is reducing its sales, Adjusted EBITDAR and Adjusted EBITDA outlooks for Fiscal 2016(2). This outlook reflects, among other things, the Company’s performance to date and an updated exchange rate assumption for the EUR/CAD.

(Canadian dollars) Fiscal 2016
Sales $14.4 to $14.6 billion
Adjusted EBITDAR $1,340 to $1,390 million
Adjusted EBITDA $615 to $665 million

The Company now expects total capital investments, net of landlord incentives, to be between $660 million and $710 million, which is approximately 4.5%-4.9% of the midpoint of the Sales outlook. Included in these amounts is the capital expenditure associated with the recent acquisitions of the GALERIA Kaufhof, Galeria INNO, Sportarenaand Gilt banners.

The above outlook reflects exchange rate assumptions of USD:CAD = 1:1.32 and EUR:CAD = 1:1.45. Any variation in these foreign exchange rate assumptions and/or other material assumptions and factors described in the “Forward-Looking Statements” section of this press release could impact the above outlook.

(2) Adjusted EBITDAR and Adjusted EBITDA are Non-IFRS Measures. See “Non-IFRS Measures” section for additional details.

Non-IFRS Measures

EBITDA and EBITDAR are non-IFRS measures that the Company uses to assess its operating performance. EBITDA is defined as net (loss) earnings before finance costs, income tax benefit, share of net loss in the Company’s two real estate joint ventures (the “Joint Ventures”), gain on contribution of assets to Joint Ventures, gain on sale of investments in Joint Ventures, dilution gains from investments in the Joint Ventures, non-cash pension expense, depreciation and amortization expense, impairment and other non-cash expenses and non-cash share based compensation expense. EBITDAR is defined as EBITDA before rent expense to third parties and net rent expense to Joint Ventures.

Adjusted EBITDA is defined as EBITDA adjusted to exclude: (i) business and organization restructuring/realignment charges; (ii) merger/acquisition costs and expenses; and (iii) normalization and joint venture adjustments, including those related to purchase accounting, if any, related to transactions that are not associated with day-to-day operations. Adjusted EBITDAR is defined as Adjusted EBITDA excluding third party rent expense, cash rent to Joint Ventures and cash distributions from Joint Ventures.

The Company has included EBITDA, Adjusted EBITDA and Adjusted EBITDAR to provide investors and others with supplemental measures of its operating performance. The Company believes EBITDA, Adjusted EBITDA and Adjusted EBITDAR are important supplemental measures of operating performance because they eliminate items that have less bearing on the Company’s operating performance and thus highlight trends in its core business that may not otherwise be apparent when relying solely on IFRS financial measures. The Company also believes that securities analysts, investors, rating agencies and other interested parties frequently use EBITDA, Adjusted EBITDA and Adjusted EBITDAR in the evaluation of issuers, many of which present similar metrics when reporting their results. The Company’s management also uses Adjusted EBITDAR in order to facilitate retail business operating performance comparisons from period to period, prepare annual operating budgets and assess its ability to meet its future debt service, capital expenditure and working capital requirements and our ability to pay dividends on our Common Shares. As other companies may calculate EBITDA, Adjusted EBITDA or Adjusted EBITDAR differently than the Company, these metrics may not be comparable to similarly titled measures reported by other companies.

This press release makes reference to certain comparable financial results expressed on a constant currency basis, including comparable sales and comparable digital sales. The Company calculates comparable sales on a year-over-year basis from stores operating for at least 13 months and includes digital sales and clearance store sales. In calculating the comparable sales change, including digital sales, on a constant currency basis, prior year foreign exchange rates are applied to both current year and prior year comparable sales. Additionally, where an acquisition closed in the previous twelve months, comparable sales change on a constant currency basis incorporate results from the pre-acquisition period. This enhances the ability to compare underlying sales trends by excluding the impact of foreign currency exchange rate fluctuations as well as by reflecting new acquisitions. Definitions and calculations of comparable sales and comparable digital sales differ among companies in the retail industry. The Company notes that results from acquisitions are only incorporated in the Company’s reported consolidated financial results from and after the acquisition date.

About Hudson’s Bay Company

Hudson’s Bay Company is one of the fastest-growing department store retailers in the world, based on its successful formula of growing through acquisitions, driving the performance of high quality stores and their all-channel offerings and unlocking the value of real estate holdings. Founded in 1670, HBC is the oldest company in North America. HBC’s portfolio today includes ten banners, in formats ranging from luxury to premium department stores to off price fashion shopping destinations, with more than 480 stores and 66,000 employees around the world.

In North America, HBC’s leading banners include Hudson’s Bay, Lord & Taylor, Saks Fifth Avenue, Gilt, and Saks OFF 5TH, along with Home Outfitters. In Europe, its banners include GALERIA Kaufhof, the largest department store group in Germany, Belgium’s only department store group Galeria INNO, as well as Sportarena.

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 are forward-looking within the meaning of applicable securities laws, including, among others, with respect to improving the efficiency of the organization and opportunities to increase profitability, the Company’s commentary on and revised outlook in respect of sales, Adjusted EBITDA and Adjusted EBITDAR, and other statements that are not historical facts. 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 sales, Adjusted EBITDA and Adjusted EBITDAR, are certain current assumptions, including, among others, the Company achieving additional savings from operational initiatives, the Company’s anticipated total capital investments, net of landlord incentives, between $660 million and $710 million, the Company opening new stores in North America, the Company maintaining a significant ownership interest in the HBS Joint Venture and the RioCan-HBC Joint Venture, and assumptions regarding the overall retail environment and currency exchange rates for Fiscal 2016. Specifically, we have assumed the following exchange rates for Fiscal 2016: USD:CAD = 1:1.32 and EUR:CAD = 1:1.45. These current assumptions, although considered reasonable by the Company at the time of preparation, may prove to be incorrect. Readers are cautioned that actual future operating results and economic performance of the Company, including with respect to our anticipated sales, Adjusted EBITDA and Adjusted EBITDAR, 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 the contemplated cost savings and synergies, and could differ materially from what is currently expected as set out above.

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 actual results to differ materially from management’s expectations and plans as set forth in such forward-looking statements for a variety of reasons. Some of the factors – many of which are beyond the Company’s control and the effects of which can be difficult to predict – include, among others: 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 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 in Saks’ pension plan, funding requirement of the HBC Europe pension plans, 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 the Company to realize the anticipated benefits, loss of flexibility with respect to properties in the Joint Ventures, exposure to environmental liabilities, liabilities associated with Target Corporation and its affiliates and other third parties who have assumed leases from the Company, 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 produce liability or recalls, increase in litigation, developments in the credit card and financial services industries, changes in accounting standards and other risks inherent to the Company’s business and/or factors beyond the Company’s 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, 2016, 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:
Kathleen de Guzman
646-802-7070
kathleen.deguzman@hbc.com

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

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

Hudson’s Bay Company upgrades its Scarborough Distribution Center with the largest Perfect Pick case shuttle system ever built

  • State-of the-art technology catapults HBC to the forefront of e-commerce distribution
  • New system operational in advance of important holiday shopping season

TORONTO, 2016-Nov-07 — /EPR Retail News/ — Hudson’s Bay Company (TSX:HBC) today (November 4, 2016) unveiled a new state-of-the-art robotic fulfillment system, which propels HBC’s Scarborough Distribution Center to the forefront of e-commerce distribution technology. The highly innovative distribution center is the first of its kind in Canada and showcases some of the most advanced automated distribution technology in the retail sector. This distribution center will contribute to a seamless experience for customers and further support Hudson’s Bay’s all-channel retail capabilities.

The system is the largest Perfect Pick case shuttle system ever built and is 12 to 15 times faster than a traditional manual process. It features 16 200-foot long aisles, utilizes the entire vertical height of the building, can hold more than one million units of inventory and can process roughly 4,200 customer orders per hour. Two custom-built document handling robots automate insertion of packing lists, while 15,000 feet of conveyor and a fleet of approximately 300 autonomous robotic delivery vehicles—iBOTs—move inventory for storing and shipping. The best-in-class technology will enable the company to deliver orders three times faster than distribution centers using the next best robotic technology. The investment to upgrade the entire distribution facility was in excess of $60 million.

“Our customers will benefit from the country’s fastest order shipping system,” said Jerry Storch, HBC’s Chief Executive Officer. “We are proud to be the first to bring this industry-leading technology to Canada, in time for the busy holiday season. This investment in our Scarborough Distribution Center creates an e-commerce technology hub and allows us to expand our e-commerce business, which is a key component to our all-channel strategy.”

The 752,000 square foot Scarborough Distribution Center supports e-commerce for HBC’s Hudson’s Bay department store. More than 300 full-time associates are employed at the center.

ABOUT HUDSON’S BAY COMPANY

Hudson’s Bay Company is one of the fastest-growing department store retailers in the world, based on its successful formula of driving the performance of high quality stores and their all-channel offerings, unlocking the value of real estate holdings and growing through acquisitions. Founded in 1670, HBC is the oldest company in North America. HBC’s portfolio today includes ten banners, in formats ranging from luxury to better department stores to off price fashion shopping destinations, with more than 470 stores and 66,000 employees around the world.

In North America, HBC’s leading banners include Hudson’s Bay, Lord & Taylor, Saks Fifth Avenue, Gilt, and Saks OFF 5TH, along with Find @ Lord & Taylor and Home Outfitters. In Europe, its banners include GALERIA Kaufhof, the largest department store group in Germany, Belgium’s only department store group Galeria INNO, as well as Sportarena.

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 CONTACT:
Hudson’s Bay Company
Tiffany Bourré
905-595-7184
Director, Corporate Communications
Tiffany.bourre@hbc.com

Source: Hudson’s Bay Company

Hudson’s Bay Company announces the appointment of Ed Burstell to newly created position of Head of Partnerships

TORONTO & NEW YORK, 2016-Oct-25 — /EPR Retail News/ — Hudson’s Bay Company (TSX: HBC) today (October 24, 2016) announced the appointment of Ed Burstell as Head of Partnerships. In this newly created position, Mr. Burstell will develop and lead partnerships to drive innovative and exclusive offerings across all of HBC’s banners globally. The appointment is effective December 5th, and Mr. Burstell will report to HBC’s CEO Jerry Storch as a member of his senior leadership team.

“HBC is focused on innovation, collaboration and developing unique partnerships as part of our strategy to differentiate. Ed’s roster of successful launches and collaborations, matched with his reputation as a true arbiter of fashion, makes him the obvious choice to lead this new division for Hudson’s Bay Company,” said Hudson’s Bay Company CEO Jerry Storch.

“I am thrilled to join Hudson’s Bay Company, especially during this time of global expansion, growth in North America, and industry-leading developments across platforms. I am looking forward to building a partnership platform that delivers exceptional innovation to customers across HBC’s banners, which will contribute to the evolution of one of the most exciting retailers in the world,” stated Mr. Burstell.

Mr. Burstell joins HBC after eight years with Liberty of London. He was instrumental in revitalizing the brand through innovative partnerships, including Liberty of London’s first-ever collaborations and pop-up shops with Hermes and Manolo Blahnik as well as collaborations with Nike and Uniqlo. These initiatives led by Mr. Burstell have contributed to Liberty of London’s double-digit year-over-year growth. Previously, Mr. Burstell was a senior vice president of Accessories, Footwear, Fine Jewelry, Designer Jewelry, Cosmetics and Fragrance at Bergdorf Goodman. Before that, he was general manager of Henri Bendel.

About Hudson’s Bay Company
Hudson’s Bay Company is one of the fastest-growing department store retailers in the world, based on its successful formula of driving the performance of high quality stores and their all-channel offerings, unlocking the value of real estate holdings and growing through acquisitions. Founded in 1670, HBC is the oldest company in North America. HBC’s portfolio today includes ten banners, in formats ranging from luxury to premium department stores to off-price fashion shopping destinations, with more than 470 stores and 66,000 employees around the world.

In North America, HBC’s leading banners include Hudson’s Bay, Lord & Taylor, Saks Fifth Avenue, Gilt, and Saks OFF 5TH, along with Find @ Lord & Taylor and Home Outfitters. In Europe, its banners include GALERIA Kaufhof, the largest department store group in Germany, Belgium’s only department store group Galeria INNO, as well as Sportarena.

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 Contacts:
Andrew Blecher
646-802-4030
SVP, Corporate Communications & Public Relations
andrew.blecher@hbc.com

Jen Vargas
646-802-2952
VP, Corporate Communications
jen.vargas@hbc.com

Source: Hudson’s Bay Company

SUPERVALU to sell Save-A-Lot business to Onex Corporation for $1.365 billion in cash

MINNEAPOLIS, 2016-Oct-19 — /EPR Retail News/ — SUPERVALU INC. (NYSE:SVU) today (Oct. 17, 2016) announced that it has entered into a definitive agreement whereby an affiliate of Onex Corporation (TSX:OCX) will acquire SUPERVALU’s Save-A-Lot business for$1.365 billion in cash, subject to customary closing adjustments. In connection with the sale, SUPERVALU and Save-A-Lot will enter into a five-year professional services agreement. The sale of Save-A-Lot is expected to be completed by January 31, 2017, subject to regulatory approvals and other customary closing conditions.

“Today’s announcement is the result of a thorough process to maximize the value of the Save-A-Lot business and best position SUPERVALU for future success,” said SUPERVALU Non-Executive Chairman of the Board, Jerry Storch. “SUPERVALU is successfully executing on its long term strategic vision and positioning the Company for continued growth and value creation. We are confident that this transaction will create exciting opportunities for both SUPERVALU and Save-A-Lot.”

“The sale of Save-A-Lot is another important step in SUPERVALU’s transformation. It provides us with a stronger balance sheet that will allow us to further build on our core strengths and growth opportunities,” said SUPERVALU President and CEO, Mark Gross. “It has been a pleasure to work with the Save-A-Lot team, and, once this transaction is completed, I look forward to continuing to work with them as one of our largest professional services customers.”

Under the terms of the professional services agreement, SUPERVALU will provide Save-A-Lot with certain services and support functions for its day-to-day operations, including cloud services, merchandising technology, payroll, finance, and other technology and hosting services.

SUPERVALU expects to use the net proceeds from the sale to prepay at least $750 million against its outstanding term loan balance. The Company intends to use the remaining net sale proceeds to further reduce debt and improve its capital structure, as well as to fund corporate and growth initiatives.

Advisors

Barclays Capital Inc. and Greenhill & Co., LLC acted as financial advisors to SUPERVALU, and Wachtell, Lipton, Rosen & Katz is serving as its legal advisor.

Conference Call

As previously announced, SUPERVALU will hold its fiscal 2017 second quarter conference call on Wednesday, October 19, 2016 at 9:00 a.m. Central Time, at which time SUPERVALU will also discuss the sale of Save-A-Lot in more detail. The call will be webcast live at www.supervaluinvestors.com (click on microphone icon).

About SUPERVALU

SUPERVALU INC. is one of the largest grocery wholesalers and retailers in the U.S. with annual sales of approximately $18 billion. SUPERVALU serves customers across the United States through a network of 3,342 stores composed of 1,773 stores operated by wholesale customers serviced primarily by the Company’s food distribution business; 1,368 Save-A-Lot stores, of which 896 are operated by licensee owners; and 201 traditional retail grocery stores (store counts as of June 18, 2016). Headquartered in Minnesota, SUPERVALU has approximately 40,000 employees. For more information about SUPERVALU visit www.supervalu.com.

About Save-A-Lot

As one of the largest hard-discount grocery retailers in the United States, Save-A-Lot owns and operates 472 corporate stores, and services and supplies another 896 licensee-owned stores across the country (store counts as of June 18, 2016). With more than 1,300 stores in urban, suburban, and rural areas, Save-A-Lot reaches more than 5 million shoppers each week. Store sizes vary, but in general range in size between approximately 15,000-20,000 square feet. The stores provide a limited selection of national and exclusive store brand products with a focus on its fresh offerings including USDA-inspected beef, pork and poultry, and farm-fresh fruits and vegetables.

FORWARD-LOOKING STATEMENTS

Except for the historical and factual information contained herein, the matters set forth in this communication, particularly those pertaining to SUPERVALU’S expectations, guidance, or future operating results, and other statements identified by words such as “estimates,” “expects,” “projects,” “plans,” “intends,” and similar expressions are forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including the possibility that regulatory and other approvals and conditions to the transaction are not received or satisfied on a timely basis or at all; the possibility that modifications to the terms of the transaction may be required in order to obtain or satisfy such approvals or conditions; the possibility that Supervalu may not fully realize the projected benefits of the transaction; changes in the planned use of proceeds from the transaction; changes in the anticipated timing for closing the transaction; business disruption during the pendency of or following the transaction; diversion of management time on transaction-related issues; and the reaction of customers and other parties to the transaction and other risk factors relating to our business or industry as detailed from time to time in SUPERVALU’s reports filed with the SEC. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this news release. Unless legally required, SUPERVALU undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

Investor Contact:
Steve Bloomquist
952-828-4144
steve.j.bloomquist@supervalu.com

Media Contact:
Jeff Swanson
952-903-1645
jeffrey.s.swanson@supervalu.com

Source: SUPERVALU INC.

Hudson’s Bay Company announces the appointment of David J. Schwartz as General Counsel and EVP

Toronto, ON, 2016-Sep-09 — /EPR Retail News/ — Hudson’s Bay Company today (Sept 8, 2016 ) announced the appointment of David J. Schwartz as General Counsel and Executive Vice President. Mr. Schwartz will lead the company’s global legal organization across banners, and will drive initiatives critical to HBC’s strategic plan. The appointment is effective Friday, September 30th, and Mr. Schwartz will report to HBC’s CEO Jerry Storch, be a member of the Company’s Executive Leadership Team, and serve as corporate secretary to its Board of Directors. Mr. Schwartz succeeds David Pickwoad, the company’s General Counsel who is leaving HBC to pursue other opportunities.

“HBC’s worldwide legal organization is critical to our global business and how we execute against our strategic plan. David Schwartz’s extensive legal and regulatory affairs experience in international retail, spanning real estate, intellectual property, litigation, regulatory compliance and securities makes him the best candidate to lead our global legal function,” said Hudson’s Bay Company CEO Jerry Storch. “We are grateful to David Pickwoad for his leadership at HBC over the past six years, and wish him all the best in his next endeavor.”

Mr. Schwartz joins HBC after 15 years with Toys “R” Us, where he served as General Counsel for over a decade. He began his tenure at Toys “R” Us as Vice President, Corporate Counsel in 2001, was named Deputy General Counsel in 2002, and appointed General Counsel in 2003. Prior to Toys “R” Us, Mr. Schwartz was a corporate partner at Anderson, Kill & Olick, P.C.

Mr. Schwartz holds a bachelor’s degree in economics from Duke University, a Juris Doctor from the University of Pennsylvania School of Law, and an MBA from Columbia University Business School. He is a member of the New York, New Jersey and Washington, D.C. Bars.

About Hudson’s Bay Company
Hudson’s Bay Company is one of the fastest-growing department store retailers in the world, based on its successful formula of driving the performance of high quality stores and their all-channel offerings, unlocking the value of real estate holdings and growing through acquisitions. Founded in 1670, HBC is the oldest company in North America. HBC’s portfolio today includes ten banners, in formats ranging from luxury to premium department stores to off-price fashion shopping destinations, with more than 470 stores and 66,000 employees around the world.

In North America, HBC’s leading banners include Hudson’s Bay, Lord & Taylor, Saks Fifth Avenue, Gilt, and Saks OFF 5TH, along with Find @ Lord & Taylor and Home Outfitters. In Europe, its banners include GALERIA Kaufhof, the largest department store group in Germany, Belgium’s only department store group Galeria INNO, as well as Sportarena.

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 Contact:
Andrew Blecher SVP
Corporate Communications &amp Public Relations
Hudson’s Bay Company
P: 646.802.4030
Andrew.blecher@hbc.com

Jen Vargas
VP, Corporate Communications
Hudson’s Bay Company
P: 646-802-2952
Jen.vargas@hbc.com

Source: Hudson’s Bay Company

Hudson’s Bay Company announced 2Q financial results for thirteen and twenty-six week periods ended July 30, 2016

TORONTO & NEW YORK & COLOGNE, Germany, 2016-Sep-07 — /EPR Retail News/ — Hudson’s Bay Company (“HBC” or the “Company”) (TSX: HBC) today (September 6, 2016) announced its second quarter financial results for the thirteen and twenty-six week periods ended July 30, 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).

“The second quarter was another solid quarter for HBC. We continued to execute on our expansion plans in Europe with the announcement that we would be introducing our iconic Hudson’s Bay banner to the Netherlands. We currently plan to open up to 20 stores, and during the quarter signed long term lease agreements for 11 locations accounting for approximately 1,526,000 square feet. We also announced the first five Saks OFF 5TH locations in Germany, which we expect to open next summer. In New York we closed a U.S. $400 million, 5-year mortgage on our Lord & Taylor flagship location on 5th Avenue which valued the property at U.S. $655 million based on an independent appraisal commissioned by the lenders. This transaction, as well as the attractive rate we secured, exemplifies both the value of our real estate portfolio and the significant financial flexibility that it provides to HBC as we work through a challenging retail environment” stated Richard Baker, HBC’s Governor and Executive Chairman.

Jerry Storch, HBC’s Chief Executive Officer, added, “In the second quarter we made good progress on focusing on expenses and leveraging our scale to increase efficiencies. Additionally, our sales associates continued to delight our customers and were able to drive sales in a challenging market. Gross margins increased 200 basis points as a result of the inclusion of HBC Europe as well as our revised pricing strategy at Saks OFF 5TH. To support our digital growth we are bringing industry-leading robotic technology to Canada which we expect will reduce digital order processing time and generate significant savings. We expect the first installation to be fully functional this fall, and are currently the only company in Canada to utilize this technology. We are also proud to support Team Canada in the Rio Olympic and Paralympic games, and it was great to see the iconic Hudson’s Bay stripes in both the opening and closing ceremonies and on the medal podiums. As we look towards the second half of 2016, we are monitoring the retail environment closely and are taking prudent steps to ensure that HBC is in a position to capitalize on the opportunities presented as we anniversary last year’s tough third and fourth quarters. Despite the uncertainty in the current environment, we remain focused on executing on our long term strategy for profitable growth.”

Second Quarter Summary

All comparative figures below are for the thirteen week period ended July 30, 2016 compared to the thirteen week period ended August 1, 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.

Consolidated retail sales were $3,252 million, an increase of 59.6% 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 1.9%. On a constant currency basis, comparable sales grew 1.1% at DSG, offset by declines of 0.9% at HBC Europe, 11.4% at HBC Off Price and 1.3% at Saks Fifth Avenue, resulting in a total comparable sales decline of 1.3%. Total Digital sales increased by 84.4% from the prior year, with total Digital comparable sales increasing by 1.4% on a constant currency basis. Excluding HBC Off Price, total Digital comparable sales increased 17.3% on a constant currency basis.

As discussed in the prior quarter, HBC has significantly reduced its promotional activity at Saks OFF 5TH compared to the prior year, which has substantially increased margins while reducing sales. During the quarter the Company also migrated the Saks OFF 5TH website to a new platform, which caused some disruption and impacted Digital sales at this banner. In addition, at Gilt, which is included in HBC Off Price and is a major component of the Company’s digital comparisons, the return policy was enhanced. The Company expects the liberalization of the return policy at Gilt and the new common digital platform will enable HBC to build stronger relationships with its customers over the long term.

For HBC overall, gross profit rate as a percentage of retail sales was 41.5%, an increase of 200 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, as well as higher gross margins at Saks OFF 5TH.

The Company remains focused on improving efficiencies, reducing expenses and optimizing its real estate portfolio, and has made solid progress on its expense management initiatives disclosed previously. These initiatives include the North American operations realignment program, voluntary restructuring programs of its European operations, and the outsourcing of IT systems maintenance positions in North America. During the quarter the Company recorded charges of $4 million related to these initiatives.

Over the last year, 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 $1,286 million compared to $775 million in the prior year. This increase reflects the additions of HBC Europe, Gilt and the Joint Ventures. Normalized SG&A expenses were $1,249 million or 38.4% of retail sales, compared to 36.9% in the prior year. This rate increase was driven by the inclusion of HBC Europe, which operates at a higher SG&A rate, and the additional net rent expense incurred in connection with the Joint Ventures.

Adjusted EBITDAR was $263 million, an increase of 113.8% compared to $123 million in the prior year, primarily as a result of the addition of HBC Europe. As a percentage of retail sales, Adjusted EBITDAR improved 210 basis points to 8.1%, reflecting the Company’s continued focus on increasing efficiencies.

Adjusted EBITDA was $81 million, an increase of 55.8% compared to $52 million in the prior year. The Joint Ventures had a $61 million impact on Adjusted EBITDA during the quarter. These Joint Venture expenses are essentially flat over the course of the year, while the retail business is seasonal, with sales and earnings weighted towards the second half of the fiscal year. While management believes that Adjusted EBITDA is less useful than Adjusted EBITDAR when evaluating the performance of the retail business, the Company will continue to disclose Adjusted EBITDA.

Finance costs were $56 million compared to $52 million in the prior year, primarily 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.

Net loss was $142 million compared to Net earnings of $59 million in the prior year. Prior year earnings include a pre-tax gain of $133 million related to the creation of the Joint Ventures. Normalized net loss was $122 millioncompared to a loss of $61 million in the prior year. The increase is primarily 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, as well as increased depreciation and amortization expenses.

Year-to-Date Summary

All comparative figures below are for the twenty-six week period ended July 30, 2016 compared to the twenty-six week period ended August 1, 2015.

Consolidated retail sales were $6,555 million, an increase of 59.5% 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 3.2%. On a constant currency basis, comparable sales grew 1.7% at DSG, offset by declines of 0.1% at HBC Europe, 7.9% at HBC Off Price and 3.7% at Saks Fifth Avenue, resulting in a total comparable sales decline of 1.1%. Total Digital sales increased by 86.9% from the prior year, with total Digital comparable sales increasing by 5.5% on a constant currency basis.

For HBC overall, gross profit rate as a percentage of retail sales was 41.7%, an increase of 140 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, as well as increased margins at Saks OFF 5TH.

SG&A expenses were $2,681 million compared to $1,555 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 $2,549 million or 38.9% of retail sales, compared to 36.5% 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 $513 million, an increase of 74.5% compared to $294 million in the prior year, primarily as a result of the addition of HBC Europe. As a percentage of retail sales, Adjusted EBITDAR improved 60 basis points to 7.8%, reflecting the Company’s continued focus on improving efficiencies.

Adjusted EBITDA was $143 million, compared to $156 million in the prior year. The Joint Ventures had a $122 million impact on Adjusted EBITDA during the first two quarters of this fiscal year. These Joint Venture expenses are essentially flat over the course of the year, while the retail business is seasonal, with sales and earnings weighted towards the second half of the fiscal year.

Finance costs were $101 million compared to $99 million in the prior year. Cash interest costs were $86 million, a$15 million increase over the prior year. The majority of this increase is related to finance lease payments at HBC Europe and long term property leases at the RioCan-HBC Joint Venture.

Net loss was $239 million compared to net earnings of $10 million in the prior year. Prior year earnings include a pre-tax gain of $133 million related to the Joint Ventures. Normalized net loss was $213 million compared to a loss of $89 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, as well as increased depreciation and amortization expense.

Inventory

Inventory at the end of the second quarter increased by $829 million compared to the prior year. The addition of HBC Europe and Gilt accounted for the majority of the increase. The remainder was driven by additional inventory related to new store openings. On a total company basis, management believes that inventory is in line with the Company’s sales expectations for the coming quarters.

Store Network

During the second quarter, the Company opened one Saks Fifth Avenue store located in Greenwich, Connecticutand two Saks OFF 5TH stores located in Chicago, Illinois and Plymouth Meeting, Pennsylvania. The Company closed one Home Outfitters store in Anjou, Quebec.

Store information as at July 30, 2016 Store Count(1) Gross Leasable Area (1) /Square Footage (000s)
Hudson’s Bay 90 15,864
Lord & Taylor 50 6,898
Saks Fifth Avenue 41 5,051
OFF 5TH 102 3,028
Home Outfitters 59 2,102
HBC Europe 130 28,609
Total 472 61,552

(1) Hudson’s Bay Company operates one Find @ Lord & Taylor store, one Hudson’s Bay outlet, two Zellers clearance centers and two Lord & Taylor outlets that are excluded from the store count and gross leasable area.

Capital Expenditure

Capital expenditures, net of landlord incentives, during the second quarter totaled $186 million, compared to $65 million in the prior year. HBC’s initiatives during the quarter included the opening of two Saks OFF 5TH stores in the U.S. and a Saks Fifth Avenue store located in Greenwich, Connecticut. Additionally, the Company completed the remodeling of the 4th floor of the Saks Fifth Avenue flagship in Manhattan, and made significant progress on the construction of the new Brookfield Place and Hawaii Saks Fifth Avenue stores which are expected to open during the third quarter. Installation of automated order fulfillment technology at the Company’s distribution centre inToronto is nearing completion, and the Company expects that this upgrade will significantly increase the efficiency with which online orders are processed.

Debt Summary

As at July 30, 2016, the Company had the following outstanding loans and borrowings on its balance sheet (refer to note 11 of the unaudited interim condensed consolidated financial statements for the thirteen and twenty-six week periods ended July 30, 2016):

(millions of Canadian dollars, unless otherwise noted) TOTAL ($) CAD ($) USD ($) EUR (€)
Global Revolving Credit Facility 849 302 397 20
U.S. Term Loan B 653 500
Lord & Taylor Mortgage 522 400
Saks Mortgage 1,632 1,250
Other loans 8 6
Total Outstanding Loans and Borrowings 3,664 302 2,553 20

Dividend

The Company also announced today that its Board of Directors has approved a quarterly dividend to be paid onOctober 17, 2016, to shareholders of record at the close of business on September 30, 2016. The dividend is in the amount of $0.05 per Common Share and is designated as an “eligible dividend” for Canadian tax purposes.

Outlook

The following outlook is fully qualified by the “Forward-Looking Statements” section of this press release

Given the overall retail environment, management currently expects Sales, Adjusted EBITDAR and Adjusted EBITDA for Fiscal 2016 to trend towards the bottom end of its outlook range. This outlook reflects the Company’s performance to date and anticipates overall comparable sales growth, calculated on a constant currency basis, to be in the low single digits for the remainder of the fiscal year as the Company anniversaries the challenging fall season experienced in Fiscal 2015.

(Canadian dollars) Fiscal 2016
Sales $14.9 to $15.9 billion
Adjusted EBITDAR $1,560 to $1,710 million
Adjusted EBITDA $800 to $950 million

The Company currently expects that in Fiscal 2016 it will make higher than normal investments in growth initiatives, with total capital investments, net of landlord incentives, expected to be between $750 million and $850 million, which is approximately 5.0%-5.7% of the midpoint of the Sales outlook. Included in these amounts is the anticipated capital spend associated with the Company’s recent acquisitions: HBC Europe and Gilt. Capital expenditure related to growth initiatives is expected to be approximately 70% of the total amount, with the remaining 30% representing maintenance capital expenditures.

The above outlook reflects exchange rate assumptions of USD:CAD = 1:1.32 & EUR:CAD = 1:1.50. Any variation in these foreign exchange rate assumptions could impact the above outlook.

Conference Call to Discuss Results

Richard Baker, HBC’s Governor and Executive Chairman, Jerry Storch, HBC’s Chief Executive Officer and Paul Beesley, HBC’s Chief Financial Officer, will discuss the second quarter financial results and other matters during a conference call on September 7, 2016 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.

Consolidated Financial Statements and Management’s Discussion and Analysis

The Company’s unaudited interim condensed consolidated financial statements for the thirteen and twenty-six week periods ended July 30, 2016 and Management’s Discussion and Analysis thereon are available under the Company’s profile on SEDAR at www.sedar.com.

Consolidated Financial Information

The following tables set out summary consolidated financial information and supplemental information for the periods indicated. The summary financial information set out below has been derived from unaudited interim condensed consolidated financial statements, prepared in accordance with International Accounting Standard 34, Interim Financial Reporting, for the thirteen and twenty-six week periods ended July 30, 2016. The unaudited financial information presented has been prepared on a basis consistent with our audited consolidated financial statements for Fiscal 2015. In the opinion of our management, such unaudited financial data reflects all adjustments, consisting of normal and recurring adjustments, necessary for a fair presentation of the results for those periods. The results of operations for interim periods are not necessarily indicative of the results to be expected for a full year or any future period.

About Hudson’s Bay Company

Hudson’s Bay Company is one of the fastest-growing department store retailers in the world, based on its successful formula of driving the performance of high quality stores and their all-channel offerings, unlocking the value of real estate holdings and growing through acquisitions. Founded in 1670, HBC is the oldest company in North America. HBC’s portfolio today includes ten banners, in formats ranging from luxury to premium department stores to off price fashion shopping destinations, with more than 470 stores and 66,000 employees around the world.

In North America, HBC’s leading banners include Hudson’s Bay, Lord & Taylor, Saks Fifth Avenue, Gilt, and OFF 5TH, along with Find @ Lord & Taylor and Home Outfitters. In Europe, its banners include GALERIA Kaufhof, the largest department store group in Germany, Belgium’s only department store group Galeria INNO, as well as Sportarena.

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 that are expected to result from the acquisitions of HBC Europe and Gilt, the Company’s plans for expansion in Europe, the benefits that are expected to result from the installation of automated order fulfillment technology at the Company’s distribution centre in Toronto, benefits of reduced promotional activity at Saks OFF 5TH and an enhanced return policy at Gilt, impact on the Company’s reported gross profit and expense margins as a result of the acquisition of HBC Europe, the benefits that are expected to result from the North American operations realignment initiative and additional cost saving activities, expected expenditures on investments in growth initiatives, the Company’s prospects for future growth opportunities, including targeting acquisitions, anticipated store openings, the Company’s growth strategies of improving retail operations and unlocking the value of real estate, and the Company’s commentary on outlook in respect of Sales, Adjusted EBITDAR, and Adjusted EBITDA, 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 Sales, Adjusted EBITDA, and Adjusted EBITDAR, are certain current assumptions, including, among others, the Company achieving overall low single digit comparable store sales growth on a constant currency basis for the remainder of Fiscal 2016, the Company achieving additional savings from operational initiatives, the Company’s anticipated total capital investments, net of landlord incentives, between $750 million and $850 million, the Company opening new stores in North America, the Company maintaining a significant ownership interest in the HBS Joint Venture and the RioCan-HBC JV, and assumptions regarding the overall retail environment and currency exchange rates for Fiscal 2016. Specifically, we have assumed the following exchange rates for Fiscal 2016: USD:CAD = 1:1.32 and EUR:CAD = 1:1.50. These current assumptions, although considered reasonable by the Company at the time of preparation, may prove to be incorrect. Readers are cautioned that actual future operating results and economic performance of the Company, including with respect to our anticipated Sales, Adjusted EBITDA, and Adjusted EBITDAR, 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, the risk that the Company may not achieve comparable sales growth on a constant currency basis for the remainder of Fiscal 2016 and the risk that the Company may not achieve the contemplated cost savings and synergies as described above, and could differ materially from what is currently expected as set out above.

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 actual results to differ materially from management’s expectations and plans as set forth in such forward-looking statements for a variety of reasons. Some of the factors – many of which are beyond HBC’s control and the effects of which can be difficult to predict – include, among others: ability to execute retailing growth strategies, ability to continue comparable sales growth, changing consumer preferences, ability to realize synergies and growth from strategic acquisitions, ability to make successful acquisitions and investments, successful inventory management, ability to upgrade and maintain our information systems to support the organization and protect against cyber-security threats, privacy breach, loss of key personnel, ability to retain key personnel of HBC Europe and Gilt, ability to attract and retain qualified employees, 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, fluctuations in the U.S. dollar, Canadian dollar, Euro and other foreign currencies, increase in raw material costs, 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, developments in the credit card and financial services industries, and other risks inherent to the Company’s business and/or factors beyond the Company’s 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, 2016, 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.

Caution should also be exercised in the evaluation and use of the independent appraisal results. The appraisals are based on various assumptions of future expectations, including the assumption that the entire flagship property is net leased by Lord & Taylor at an estimated current fair market rent. While the appraiser’s assumptions are considered to be reasonable at the current time, some of the assumptions may not materialize or may differ materially from actual experience in the future.

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

Hudson’s Bay Company expands its European presence with plans for up to 20 new stores in the Netherlands over the next 24 months

  • Canada’s premium department store banner Hudson’s Bay and off-price banner Saks OFF 5TH expected to launch first stores in summer 2017 utilizing HBC’s existing European platform
  • Plans to open up to 20 stores over the next 24 months
  • Expansion is expected to create approximately 2,500 store jobs and 2,500 construction jobs in key Dutch cities
  • Anticipates 300 million Euros in capital investments, with majority to be funded by landlords

TORONTO & COLOGNE, Germany & AMSTERDAM, 2016-May-23 — /EPR Retail News/ — Hudson’s Bay Company (“HBC” or the “Company”) (TSX:HBC) is pleased to announce that it is expanding its European presence with plans for up to 20 new stores in the Netherlands over the next 24 months. The Company has finalized and is in the process of finalizing long term leases for select, sought after locations. The first stores are expected to launch in the summer of 2017 and operate under the Hudson’s Bay banner as well as the Saks OFF 5TH banner. The expansion into the Netherlands will build on HBC Europe’s existing infrastructure and will utilize the same platforms such as information technology, procurement and digital support. Build out of the stores will be funded primarily by the relevant landlords and HBC will invest in the operational aspects of the stores including merchandising and employees.

Richard Baker, Governor and Chairman of HBC stated, “We are very pleased to introduce our Canadian Hudson’s Bay banner, one of the world’s most exciting department stores, to the Netherlands. Our acquisition of GALERIA in 2015 established our European headquarters in Cologne and a platform for future organic growth. Expansion intothe Netherlands is a natural extension of our existing presence in Belgium as well as our planned entry into Luxembourg and will complete our presence in all of the Benelux countries. We were able to capitalize on an opportunity to select sought after, high street real estate locations. Canada and The Netherlands have a long, storied history built on collaboration and cultural respect. This is an extremely compelling opportunity to invest in the Dutch market, leverage the iconic Hudson’s Bay brand and introduce what will be the only nationwide all-channel premium department store.”

Jerry Storch, HBC’s Chief Executive Officer, commented, “We believe that in the Dutch retail market there is unmet demand in both the premium department store and off-price segments. The Hudson’s Bay and Saks OFF 5TH banners, tailored for the Dutch market, will introduce our all-channel retail model to the Netherlands with a combination of exciting retail destinations and a best in class ecommerce presence. The situation is similar to the one we capitalized on in Canada with Hudson’s Bay. We introduced a new, innovative format offering relevant brands and excellent service. We will use our proven playbook based on our success with fantastic department stores combined with local management expertise to create innovative retail destinations.”

Olivier Van den Bossche, Head of HBC’s European department store business, said, “We are thrilled about the opportunity to introduce Hudson’s Bay and Saks OFF 5TH to the Netherlands through our strategy of targeted organic growth. Our team of European retail experts has a strong understanding of the Dutch landscape. Our expansion is expected to result in the creation of over 2,500 store jobs, 2,500 construction jobs and 300 million Euros in capital investments, the majority of which will be funded through landlord incentives. We are committed to the Dutch marketplace and look forward to partnering with local governments to create exciting retail destinations.”

HBC was advised by Stibbe and Stikeman Elliott LLP on legal matters and by Eric Zorn, Chairman of ESZ LLC, anInternational Real Estate Consulting Group, along with one of his partners, Robert Bray, on real estate matters.

About Hudson’s Bay Company
Hudson’s Bay Company is one of the fastest-growing department store retailers in the world, based on its successful formula of driving the performance of high quality stores and their all-channel offerings, unlocking the value of real estate holdings and growing through acquisitions. Founded in 1670, HBC is the oldest company inNorth America. HBC’s portfolio today includes ten banners, in formats ranging from luxury to better department stores to off price fashion shopping destinations, with more than 460 stores and 66,000 employees around the world.

In North America, HBC’s leading banners include Hudson’s Bay, Lord & Taylor, Saks Fifth Avenue, Gilt, and Saks OFF 5TH, along with Find @ Lord & Taylor and Home Outfitters. In Europe, its banners include GALERIA Kaufhof, the largest department store group in Germany, Belgium’s only department store group Galeria INNO, as well asSportarena.

HBC has significant investments in real estate joint ventures. It has partnered with Simon Property Group Inc. in theHBS 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 constitute forward-looking statements within the meaning of applicable securities laws, including, without limitation, statements regarding the Company’s plans to expand its European presence to the Netherlands by opening up to 20 stores over the next 24 months, the Company’s expectation that such stores will launch in the summer 2017 and operate under the Hudson’s Bay and Saks OFF 5TH banners, long term leases for up to 20 store locations will be finalized in the near future, the build-out of the stores will be primarily funded by the relevant landlords through landlord incentives, and the benefits that are expected to result from the expansion into the Netherlands, including the creation of new jobs. 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.

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 and risks that could cause actual results to differ materially from management’s expectations and plans as set forth in such forward-looking statements for a variety of reasons. Some of the factors and risks – many of which are beyond HBC’s control and the effects of which can be difficult to predict – include, among others – (a) the risk that HBC is unable to finalize long term leases for up to 20 select, sought after store locations in the Netherlands, (b) the risk that the expansion into the Netherlands requires capital expenditures in excess of those currently anticipated and/or more than 24 months to complete, (c) the risk of introducing new brands into new markets and of doing business abroad, (d) the risk that the anticipated benefits from the expansion into the Netherlands cannot be realized, (e) credit, market, currency, operational, liquidity and funding risks generally, including changes in economic and geopolitical conditions, interest rates or tax rates, and (f) risks and uncertainties relating to information management, technology, supply chain, product safety, changes in law, competition, seasonality, commodity price and business.

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, 2016, 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:
Kathleen de Guzman, 646-807-0148
kathleen.deguzman@hbc.com
or
Elliot Grundmanis, 416-256-6732
elliot.grundmanis@hbc.com
or
MEDIA CONTACTS:
Andrew Blecher, 212-391-3179
andrew.blecher@hbc.com
or
Tiffany Bourré, 905-595-7184
tiffany.bourre@hbc.com

Source: Hudson’s Bay Company

News Provided by Acquire Media

Hudson’s Bay Company expands European presence with plans for up to 20 new stores in the Netherlands

  • Canada’s premium department store banner Hudson’s Bay and off-price banner Saks OFF 5TH expected to launch first stores in summer 2017 utilizing HBC’s existing European platform
  • Plans to open up to 20 stores over the next 24 months
  • Expansion is expected to create approximately 2,500 store jobs and 2,500 construction jobs in key Dutch cities
  • Anticipates 300 million Euros in capital investments, with majority to be funded by landlords

TORONTO & COLOGNE, Germany & AMSTERDAM, 2016-May-17 — /EPR Retail News/ — Hudson’s Bay Company (“HBC” or the “Company”) (TSX:HBC) is pleased to announce that it is expanding its European presence with plans for up to 20 new stores in the Netherlands over the next 24 months. The Company has finalized and is in the process of finalizing long term leases for select, sought after locations. The first stores are expected to launch in the summer of 2017 and operate under the Hudson’s Bay banner as well as the Saks OFF 5TH banner. The expansion into the Netherlands will build on HBC Europe’s existing infrastructure and will utilize the same platforms such as information technology, procurement and digital support. Build out of the stores will be funded primarily by the relevant landlords and HBC will invest in the operational aspects of the stores including merchandising and employees.

Richard Baker, Governor and Chairman of HBC stated, “We are very pleased to introduce our Canadian Hudson’s Bay banner, one of the world’s most exciting department stores, to the Netherlands. Our acquisition of GALERIA in 2015 established our European headquarters in Cologne and a platform for future organic growth. Expansion intothe Netherlands is a natural extension of our existing presence in Belgium as well as our planned entry into Luxembourg and will complete our presence in all of the Benelux countries. We were able to capitalize on an opportunity to select sought after, high street real estate locations. Canada and The Netherlands have a long, storied history built on collaboration and cultural respect. This is an extremely compelling opportunity to invest in the Dutch market, leverage the iconic Hudson’s Bay brand and introduce what will be the only nationwide all-channel premium department store.”

Jerry Storch, HBC’s Chief Executive Officer, commented, “We believe that in the Dutch retail market there is unmet demand in both the premium department store and off-price segments. The Hudson’s Bay and Saks OFF 5TH banners, tailored for the Dutch market, will introduce our all-channel retail model to the Netherlands with a combination of exciting retail destinations and a best in class ecommerce presence. The situation is similar to the one we capitalized on in Canada with Hudson’s Bay. We introduced a new, innovative format offering relevant brands and excellent service. We will use our proven playbook based on our success with fantastic department stores combined with local management expertise to create innovative retail destinations.”

Olivier Van den Bossche, Head of HBC’s European department store business, said, “We are thrilled about the opportunity to introduce Hudson’s Bay and Saks OFF 5TH to the Netherlands through our strategy of targeted organic growth. Our team of European retail experts has a strong understanding of the Dutch landscape. Our expansion is expected to result in the creation of over 2,500 store jobs, 2,500 construction jobs and 300 million Euros in capital investments, the majority of which will be funded through landlord incentives. We are committed to the Dutch marketplace and look forward to partnering with local governments to create exciting retail destinations.”

HBC was advised by Stibbe and Stikeman Elliott LLP on legal matters and by Eric Zorn, Chairman of ESZ LLC, anInternational Real Estate Consulting Group, along with one of his partners, Robert Bray, on real estate matters.

About Hudson’s Bay Company
Hudson’s Bay Company is one of the fastest-growing department store retailers in the world, based on its successful formula of driving the performance of high quality stores and their all-channel offerings, unlocking the value of real estate holdings and growing through acquisitions. Founded in 1670, HBC is the oldest company inNorth America. HBC’s portfolio today includes ten banners, in formats ranging from luxury to better department stores to off price fashion shopping destinations, with more than 460 stores and 66,000 employees around the world.

In North America, HBC’s leading banners include Hudson’s Bay, Lord & Taylor, Saks Fifth Avenue, Gilt, and Saks OFF 5TH, along with Find @ Lord & Taylor and Home Outfitters. In Europe, its banners include GALERIA Kaufhof, the largest department store group in Germany, Belgium’s only department store group Galeria INNO, as well asSportarena.

HBC has significant investments in real estate joint ventures. It has partnered with Simon Property Group Inc. in theHBS 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 constitute forward-looking statements within the meaning of applicable securities laws, including, without limitation, statements regarding the Company’s plans to expand its European presence to the Netherlands by opening up to 20 stores over the next 24 months, the Company’s expectation that such stores will launch in the summer 2017 and operate under the Hudson’s Bay and Saks OFF 5TH banners, long term leases for up to 20 store locations will be finalized in the near future, the build-out of the stores will be primarily funded by the relevant landlords through landlord incentives, and the benefits that are expected to result from the expansion into the Netherlands, including the creation of new jobs. 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.

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 and risks that could cause actual results to differ materially from management’s expectations and plans as set forth in such forward-looking statements for a variety of reasons. Some of the factors and risks – many of which are beyond HBC’s control and the effects of which can be difficult to predict – include, among others – (a) the risk that HBC is unable to finalize long term leases for up to 20 select, sought after store locations in the Netherlands, (b) the risk that the expansion into the Netherlands requires capital expenditures in excess of those currently anticipated and/or more than 24 months to complete, (c) the risk of introducing new brands into new markets and of doing business abroad, (d) the risk that the anticipated benefits from the expansion into the Netherlands cannot be realized, (e) credit, market, currency, operational, liquidity and funding risks generally, including changes in economic and geopolitical conditions, interest rates or tax rates, and (f) risks and uncertainties relating to information management, technology, supply chain, product safety, changes in law, competition, seasonality, commodity price and business.

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, 2016, 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:
Kathleen de Guzman, 646-807-0148
kathleen.deguzman@hbc.com
or
Elliot Grundmanis, 416-256-6732
elliot.grundmanis@hbc.com
or
MEDIA CONTACTS:
Andrew Blecher, 212-391-3179
andrew.blecher@hbc.com
or
Tiffany Bourré, 905-595-7184
tiffany.bourre@hbc.com

Source: Hudson’s Bay Company

News Provided by Acquire Media

Hudson’s Bay Company opens best-in-class robotic retail technology distribution center in Pottsville, Pennsylvania

  • New DC Enhances HBC’s All-Channel Offering to Better Serve Consumers and Drive Continued Digital Growth
  • Creates More Than 200 New Jobs in Pennsylvania
  • Investment in Innovative Robotic Systems Positions HBC at the Forefront of Fulfillment Distribution Technology

TORONTO, 2016-May-03 — /EPR Retail News/ — Hudson’s Bay Company (HBC) is pleased to announce it will open a new state-of-the-art, all-channel fulfilment distribution center (DC) in Pottsville, Pennsylvania on July 1, 2016. Consistent with HBC’s industry-leading digital growth strategy, the DC will utilize highly innovative robotic technology to enhance the Company’s extensive all-channel retailing capabilities.

HBC plans to open the 450,000 sq. ft. Pottsville facility through a phased approach, expanding to 617,500 sq. ft. by January 2017. The DC will run best-in-class robotic retail technology that is approximately three-times faster than the typical technology utilized in e-commerce DCs. This will enable HBC to reduce costs while improving output volume and accuracy. The new DC will support all e-commerce fulfillment for HBC’s Lord & Taylor and Saks OFF 5TH department store banners.

“At HBC, we are laser-focused on our all-channel strategy, and this investment leapfrogs us to the forefront of internet distribution technology,” said Jerry Storch, HBC’s Chief Executive Officer. “As we execute on our digital strategy, we continue to invest in innovation that enables us to serve our consumers seamlessly, lead the evolution of trends in the retail industry, and expand our business which creates new job opportunities and investment in the community.”

The Pottsville DC will house corporate offices, a photo studio and a warehouse. It will initially have approximately 600 positions, which includes the creation of more than 200 new jobs in the City of Pottsville as well as approximately 390 positions that will move from the Company’s existing Wilkes-Barre, PA DC. Following the Pottsville DC opening, the Wilkes-Barre facility will continue to employ approximately 750 people and will focus on supporting the retail operations of the Lord & Taylor, Saks, and Saks OFF 5TH banners. There will be a total of approximately 1,350 positions between the two facilities in the state of Pennsylvania.

Pennsylvania Governor Tom Wolf said, “HBC’s decision to operate an additional distribution center in Pennsylvania, which will create hundreds of additional jobs, is a testament to our State’s highly dedicated workforce and an important reflection of critical economic progress. We are delighted to work with HBC to better serve its customers and accelerate its growth.” “We are grateful to Governor Wolf and the Governor’s Action Team, and excited to become part of the Pottsville community,” added Storch.

Following the opening of the Pottsville facility, HBC plans to introduce the technology to its Scarborough, Ontario DC this fall, making it the only company in Canada to utilize the cutting-edge systems. This is expected to result in improved productivity and throughput, as well as increased storage space, without any reduction to full-time staff.

About Hudson’s Bay Company
Hudson’s Bay Company is one of the fastest-growing department store retailers in the world, based on its successful formula of driving the performance of high quality stores and their all-channel offerings, unlocking the value of real estate holdings and growing through acquisitions. Founded in 1670, HBC is the oldest company in North America. HBC’s portfolio today includes ten banners, in formats ranging from luxury to better department stores to off price fashion shopping destinations, with more than 460 stores and 66,000 employees around the world.

In North America, HBC’s leading banners include Hudson’s Bay, Lord & Taylor, Saks Fifth Avenue, Gilt, and Saks OFF 5TH, along with Find @ Lord & Taylor and Home Outfitters. In Europe, its banners include GALERIA Kaufhof, the largest department store group in Germany, Belgium’s only department store group Galeria INNO, as well as Sportarena.

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 Contact:

Andrew Blecher
SVP Corporate Communications & Public Relations
andrew.blecher@hbc.com

Tiffany Bourré
Director, External Communications
905-595-7184
tiffany.bourre@hbc.com

Hudson’s Bay Company to acquire Gilt Groupe Holdings, Inc. for $250 million

  • Acquisition Accelerates HBC’s All-Channel Growth
  • Strong Mobile and Personalization Expertise Will Advance Pace of Innovation Across HBC’s Rapidly Growing Digital Business
  • Gilt has Loyal and Devoted Millennial Membership

TORONTO & NEW YORK, 2016-1-8 — /EPR Retail News/ — (All amounts in US dollars) – Hudson’s Bay Company (“HBC” or the “Company”) (TSX: HBC) today announced that it has entered into a definitive agreement to acquire Gilt Groupe Holdings, Inc. (“Gilt”) for $250 million in cash, subject to customary requirements.

This transaction reflects HBC’s ongoing focus on advancing its all-channel model while continuing to grow its successful off-price business through the integration of Gilt with Saks OFF 5TH locations.

Gilt is a leading and innovative online shopping destination, offering its members special access to inspiring fashion merchandise and experiences. With over 9 million members and approximately 50% of orders generated on its mobile platform, Gilt has cultivated a loyal and devoted millennial following.

Jerry Storch, the Chief Executive Officer of HBC, stated, “With this transaction we are further accelerating both HBC’s all-channel offering and Gilt’s growth. We plan to continue to foster Gilt’s culture of innovation, which has helped create a strong brand with a loyal and devoted millennial following. Adding Gilt to our rapidly growing digital business is very exciting and we see tremendous potential to enhance our mobile and personalization strategies by leveraging Gilt’s advanced capabilities. We look forward to welcoming the Gilt team to HBC and to benefitting from the complementary nature of our businesses.”

“HBC and Saks OFF 5TH are the ideal home for Gilt and our members,” said Michelle Peluso, Chief Executive Officer of Gilt. “HBC understands our proposition and is committed to positioning our business for further success. Our members will find having a brick and mortar presence valuable and a positive addition to the Gilt experience. We are excited for our future and confident that we have the right team in place to continue to innovate the shopping experience and grow Gilt.”

The transaction is expected to contribute approximately $500 million to HBC’s consolidated fiscal 2016 sales and be complementary to HBC’s existing business. Additionally, HBC plans to leverage Gilt’s mobile and personalization capabilities to accelerate the growth of HBC’s digital business across all of its existing banners.

The Company also expects to benefit from the integration of Gilt with Saks OFF 5TH locations, including the introduction of a new return program at Saks OFF 5TH locations for Gilt merchandise following the closing of the acquisition. HBC also expects to create Gilt concept shops at Saks OFF 5TH stores, developing a true all-channel model for Gilt.

The Company expects Gilt to contribute approximately $40 million of Adjusted EBITDA by fiscal 2017, which is expected to be generated from both revenue and cost drivers. Opportunities for revenue growth at Gilt include growth in Gilt’s underlying business, revenue synergies from accepting Gilt returns at Saks Off 5th stores, and growth in Gilt’s membership from leveraging HBC’s customer base to source new members. Opportunities for revenue growth at Saks Off 5th include increased customer traffic to stores from Gilt customers making returns and sales to customers visiting Gilt concept shops inside Saks Off 5th locations. Opportunities for expense savings and operational efficiencies from combining the businesses include reduced shipping costs, increased purchasing power, and shared inventories across Gilt and Saks Off 5th.

HBC expects to fund the $250 million purchase price plus transaction costs using cash on hand. The transaction is expected to close on or about February 1, 2016, subject to customary closing conditions and Gilt shareholder approval.

Scotiabank is acting as exclusive financial advisor to HBC. Willkie Farr & Gallagher LLP acted as M&A legal counsel, and Stikeman Elliott LLP served as company legal counsel. Lazard is acting as exclusive  financial adviser to Gilt andWilmer Cutler Pickering Hale and Dorr is acting as its counsel.

For media use: Photos and b-roll related to the Hudson’s Bay Company acquisition of Gilt available at :http://investor.hbc.com/releases.cfm

About Hudson’s Bay Company
Hudson’s Bay Company is one of the fastest-growing department store retailers in the world, based on its successful formula of driving the performance of high quality stores and their all-channel offerings, unlocking the value of real estate holdings and growing through acquisitions. Founded in 1670, HBC is the oldest company in North America. HBC’s portfolio today includes nine banners, in formats ranging from luxury to better department stores to off price, with more than 460 stores and 65,000 employees around the world.

In North America, HBC’s leading banners include Hudson’s Bay, Lord & Taylor, Saks Fifth Avenue and Saks OFF 5TH, along with Find @ Lord & Taylor and Home Outfitters. In Europe, its banners include GALERIA Kaufhof, the largest department store group in Germany, Belgium’s only department store group Galeria INNO, as well as Sportarena.

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.

About Gilt
Gilt, www.Gilt.com, is an innovative online shopping destination offering its members special access to the most inspiring merchandise and experiences all at insider prices. Gilt opens a window every day to the exceptional as it continually searches the world for the most coveted brands and products, including fashion and accessories for women, men, and children; home decor; and unique activities in select cities and destinations.

Forward-Looking Statements

Certain statements made in this news release, including, but not limited to, statements relating to the contemplated acquisition of Gilt, timing and benefits that are expected to result from the proposed acquisition, including the addition of approximately $500 million to HBC’s consolidated fiscal 2016 sales, the expected benefits from the integration of Gilt with Saks OFF 5TH locations, the expected contribution by Gilt of approximately $40 million of Adjusted EBITDA by fiscal 2017, 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.

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 actual results to differ materially from management’s expectations and plans as set forth in such forward-looking statements for a variety of reasons. Some of the factors – many of which are beyond our control and the effects of which can be difficult to predict – include, among others (a) the failure to obtain, on a timely basis or otherwise, required approvals for the proposed acquisition; (b) the risk that a condition to completion of the proposed acquisition may not be satisfied; © the possibility that the anticipated benefits from the proposed acquisition cannot be realized; (d) the ability of HBC to retain and attract key Gilt personnel and for Gilt to maintain relationships with customers, suppliers and other business partners; (e) credit, market, currency, operational, liquidity and funding risks generally, including changes in economic conditions, interest rates or tax rates; and (f) risks and uncertainties relating to information management, technology, supply chain, product safety, changes in law, competition, seasonality, commodity price and business. The proposed acquisition could be modified, restructured or terminated.

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 third quarter Management Discussion & Analysis dated December 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.

 

 

INVESTOR:
Hudson’s Bay Company:
Kathleen de Guzman, (646) 807-0148
kathleen.deguzman@hbc.com
or
Elliot Grundmanis, (416) 256-6732
elliot.grundmanis@hbc.com
or
MEDIA:
Hudson’s Bay Company:
Kathleen Waugh, (212) 391-5350
Kathleen.Waugh@hbc.com
or
Andrew Blecher, (212) 391-3179
Andrew.blecher@hbc.com

 

Source: Hudson’s Bay Company

News Provided by Acquire Media

SUPERVALU: Sam Duncan intends to retire as President and CEO on February 29, 2016

  • Bruce Besanko Promoted to Chief Operating Officer
  • Susan Grafton Promoted to Chief Financial Officer

MINNEAPOLIS, 2015-10-3 — /EPR Retail News/ — SUPERVALU INC. (NYSE: SVU) today announced that Sam Duncan has informed the Company’s Board of Directors of his intention to retire as President and CEO on February 29, 2016, following the end of the Company’s fiscal year.

Duncan was named President and CEO in February 2013 in connection with the sale by SUPERVALU of five retail grocery banners to Albertson’s. Under Duncan’s leadership and direction, SUPERVALU has repositioned its three core business segments: Independent Business, Save-A-Lot and its five remaining regional Retail Food banners, as well as helped deliver increases in shareholder value. Duncan, 63, is retiring to spend more time with his family in the Pacific Northwest.

“SUPERVALU is a terrific organization and we have accomplished a great deal together during the past two and one-half years,” said Duncan. “I have thoroughly enjoyed working with our employees and thank them for all of their hard work and dedication. I am also looking forward to finishing the year strong and continuing to drive sales and cash through my remaining time at the Company, as well as providing time and support to ensure a smooth transition for my successor. After 46 years in the grocery and retail business, this is a bittersweet moment, but I am also excited by the opportunity to have more time for my family and personal interests following my retirement.”

“Sam has made a tremendous contribution to SUPERVALU during his tenure as President and CEO,” said Jerry Storch, Non-Executive Chairman of the Board. “He helped stabilize the business following the sale of the five retail grocery banners and has led a turn-around in the performance of the entire Company including improving the performance of all three of its core business segments. The Company is in a better place today because of Sam’s leadership. The Board is very grateful and appreciative for Sam’s contributions to the Company. The Board process for naming the next CEO is underway, including consideration of internal and external candidates.”

SUPERVALU also today announced that Bruce Besanko has been promoted to the newly-created role of Executive Vice President, Chief Operating Officer, reporting to Sam Duncan, and that Susan Grafton has been promoted to Executive Vice President, Chief Financial Officer, reporting to Bruce Besanko. Both appointments are effective immediately. In his role as Chief Operating Officer, Besanko will retain oversight of the finance function, and assume oversight of the Company’s independent business operations, five regional Retail Food banners, and the Company’s merchandising, marketing, and pharmacy functions.

“I’m very pleased that Bruce has been promoted to the role of COO for our Company,” said Duncan. “He has done a superb job as CFO for SUPERVALU, working with me and the leadership team on all aspects of the Company’s turnaround success. He is an astute businessman who has always impressed me with his leadership and how he deals with business challenges and opportunities. In this role, I am confident he’ll help lead our operations teams to successfully plan and execute against our future business strategies.”

Duncan continued, “Additionally, we are very fortunate to have Susan in our ranks as someone who can step right into the CFO role. She has a tremendous financial background and has been instrumental in helping us reposition our financial organization and the overall business over the past one and one-half years.”

Today’s announcement does not impact the Company’s continued exploration of a separation of its Save-A-Lot business.

About SUPERVALU INC.
SUPERVALU INC. is one of the largest grocery wholesalers and retailers in the U.S. with annual sales of approximately $18 billion.SUPERVALU serves customers across the United States through a network of 3,597 stores composed of 1,857 primary stores serviced by the Company’s food distribution business; 1,335 Save-A-Lot stores, of which 902 are operated by licensee owners; and 197 traditional retail grocery stores (store counts as of June 20, 2015). Headquartered in Minnesota, SUPERVALU has approximately 40,000 employees. For more information about SUPERVALU visit www.supervalu.com.

Source: SUPERVALU INC.

SUPERVALU INC.
INVESTOR CONTACT:
Steve Bloomquist, 952-828-4144
steve.j.bloomquist@supervalu.com
or
MEDIA CONTACT:
Jeff Swanson, 952-903-1645
jeffrey.s.swanson@supervalu.com

Dion Rooney appointed Executive Vice President HBC Digital

TORONTO, 2015-9-18 — /EPR Retail News/ — Hudson’s Bay Company is pleased to announce today the appointment of Dion Rooney to Executive Vice President, HBC Digital. Mr. Rooney will be responsible for leading the HBC Digital business and delivering an exceptional online experience across all banners. Mr. Rooney joins HBC’s Executive Leadership Team and will report directly to the Office of the Chairman.

“With digital commerce transforming the shopping experience, we are committed to continuously evolving our all-channel experience and enabling our customers to buy anywhere and ship anywhere. Dion’s proven success in developing global e-commerce strategies and achieving significant growth through all-channel retailing will help us realize best-in-class performance as we continue to invest in our digital business,” said Jerry Storch, CEO, Hudson’s Bay Company.

Mr. Rooney brings more than 30 years of senior experience in the information technology field, with deep roots in e-commerce, omni-channel retailing and supply chain, and a proven track record as a transformational business leader. Prior to joining HBC, Mr. Rooney served as Chief Information Officer of Toys “R” Us, where he was instrumental in building a global state-of-the-art omni-channel offering. He has been at the leading edge in developing e-commerce strategies and building digital businesses for over a decade.

Mr. Rooney holds an MBA and a Bachelor of Science degree in computer science from the Stillman School of Businessat Seton Hall University.

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”.

Hudson’s Bay Company
Tiffany Bourré, 905-595-7184
Director, External Communications
tiffany.bourre@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

Canada-based Hudson’s Bay Company to acquire Metro’s department store group GALERIA Kaufhof and its Belgian subsidiary Inno for €2.825 billion

  • Creates a Global Platform, Positioning HBC for Future Growth in Europe
  • Transaction Value of €2.825 Billion Agreed, Including the Assumption of Certain Liabilities
  • HBC Plans to Work with GALERIA Kaufhof’s Existing Management Team to Further Strengthen Offerings to Consumers
  • Agreement Includes Extensive Commitments to Maintain Employment Levels and Store Count, GALERIA Kaufhof to Remain Headquartered in Cologne
  • Transaction Expected to Deliver Immediate Value to HBC Shareholders
  • METRO GROUP Expects Positive EBIT Effect of Around €0.7 Billion from the Transaction
  • Transaction Should be Completed by the End of the Third Quarter of 2015
  • Joint Press Conference on Monday in Cologne at 11:15 AM

Düsseldorf, Germany, 2015-6-15 — /EPR Retail News/ — Canada-based Hudson’s Bay Company, one of the foremost retail operators in North America and its longest continually operated company, and Düsseldorf-based METRO GROUP today announced that they have entered into a definitive agreement under which HBC will acquire Metro’s department store group GALERIA Kaufhof and its Belgian subsidiary Inno for a transaction value of €2.825 billion, including the assumption of certain liabilities. The transaction has been approved by the Board of Directors of HBC as well as the Supervisory Board of METRO AG. It is expected to close by the end of the third quarter of 2015.

As a result of the acquisition, HBC will have:

  • 464 Locations Worldwide, 8 Leading Banners
  • C$13 (€9.0) Billion in Revenue(1)
  • Pro Forma Sales by Market: 44% US; 31% Germany 23% Canada, 2% Belgium
  • Strong Management Teams in North America and Europe

The transaction is a further extension of HBC’s proven strategy of growing through mergers and acquisitions, with GALERIA Kaufhof further diversifying HBC’s portfolio and positioning the Company as a premier international retailer. Specifically, HBC is taking over 103 GALERIA Kaufhof stores in Germany from METRO GROUP, including 59 properties in prime inner-city locations that are part of the GALERIA Real Estate portfolio. As part of the transaction, HBC is also acquiring 16 Sportarena stores, 16 GALERIA Inno department stores located in Belgium, as well as various logistics centres, warehouses and other properties, and the long-standing GALERIA Kaufhof head office in Cologne.

Richard Baker, HBC’s Governor and Executive Chairman, said, “This is an exciting transaction that demonstrates our proven growth formula in action, and it is the right investment and the right time. We have been carefully surveying the European retail landscape for many years for a potential expansion opportunity and have watched GALERIA Kaufhof build on its exceptional real estate to become the #1 department store in Germany. We are excited to work with the GALERIA Kaufhof management team to leverage our expertise, and we welcome GALERIA Kaufhof to our portfolio of dynamic brands.”

Olaf Koch, Chairman of METRO’S Management Board, said, “With Hudson’s Bay Company, we have found the ideal partner for a successful future of GALERIA Kaufhof. HBC pursues a strategy of international growth and GALERIA Kaufhof plays a central role in this expansion. Beyond the attractive financial and transactional aspects, a key factor for us was the fact that HBC has made binding guarantees to take on the approximately 21,500 GALERIA Kaufhof employees in Germany and Belgium. We also would like to thank all employees of GALERIA Kaufhof and its management for their outstanding contribution to the business and their great work. Without their dedication, the company would not have achieved, and maintained, its No 1 position.”

With this transaction METRO GROUP will achieve a positive cash inflow of around €1.6 billion and significantly reduce its rating-relevant net debt by around €2.7 billion. Moreover METRO GROUP expects a positive EBIT effect of around €0.7 billion from the transaction.

As part of the Agreement, HBC will continue to operate GALERIA Kaufhof, Inno and Sportarena under their current brand banners. No significant changes, beyond those already announced by GALERIA Kaufhof, are currently anticipated with respect to the store footprints or staffing levels at any of the brand banners, and GALERIA Kaufhof will remain headquartered in Cologne. When combined with HBC’s current portfolio of iconic store banners, including Hudson’s Bay, Lord & Taylor, Saks Fifth Avenue, Saks OFF 5TH and Home Outfitters, HBC will operate 464 stores under 8 banners, with 44% of sales generated in the United States, 31% in Germany, 23% in Canada and 2% in Belgium.

GALERIA Kaufhof’s existing management team is expected to remain in place following the close of the transaction, and will work closely with HBC’s leadership to explore opportunities to further strengthen GALERIA Kaufhof’s offerings to consumers. These are expected to include: expanding the GALERIA Kaufhof brand matrix; aggressively growing GALERIA Kaufhof’s eCommerce; optimizing key merchandise categories; and pursuing the opportunity to introduce the Saks Fifth Avenue and the Saks OFF 5TH banners in Germany and Belgium, and the potential to build within the existing store network to improve productivity and optimize floor space.

Kaufhof Acquisition Strengthens HBC’s Position as a Premier International Retailer

Jerry Storch, CEO of HBC, said, “This transaction is a significant step forward in our plans to become a premier global retailer. We look forward to working with GALERIA Kaufhof’s management team as we bring together two geographically complementary businesses, diversifying HBC’s revenue base with leading banners in Canada, the United States, Germany and Belgium. This is a strong foundation to explore additional opportunities for growth throughout the Continent.”

Lovro Mandac, Chairman and CEO of Galeria Holding, said: “GALERIA Kaufhof has worked in the past years to achieve a good position in the German retailing market through a continual willingness to change and a high customer orientation. That is thanks to the performance of the Associates and the leadership team. As a result, our company is now well-armed for the future with Hudson’s Bay as our new owner. It is good and important for the company that there is now clarity about the ownership question. We thank METRO GROUP for their support in the past years and look forward to cooperating with Hudson’s Bay on the future positioning of the company.”

Building on GALERIA Kaufhof’s Leadership Position in the German Retail Marketplace

Don Watros, President of HBC International, commented, “With GALERIA Kaufhof, we gain a best-in-market, successful retailer with a network of very well-maintained stores, a beloved heritage and a brand that resonates strongly with German consumers. Based on our extensive experience in building outstanding department stores, we intend to leverage our expertise and proven strategies to further build GALERIA Kaufhof for a strong, all-channel future. We are looking forward to working with the 21,500 highly skilled and motivated employees and in close cooperation with GALERIA Kaufhof’s works councils and unions.”

HBC is structuring the transaction and financing similar to previous transactions in Canada and the United States. BofA Merrill Lynch is acting as exclusive financial advisor to HBC on the transaction. Willkie Farr & Gallagher LLP is acting as M&A legal counsel, and Stikeman Elliott LLP is acting as company legal counsel. METRO is being advised by JP Morgan and Deutsche Bank and Clifford Chance is serving as legal counsel.

METRO GROUP had decided to sell its department store subsidiary because the Düsseldorf-based group wishes to focus more strongly on its wholesale business METRO Cash & Carry, its consumer electronics division Media-Saturn and its hypermarket chain Real in the future. “Not only has HBC submitted the best offer in terms of a secure future for GALERIA Kaufhof, it has also made a valuable bid for our shareholders,” said Olaf Koch. “We will also use the proceeds from the sale of GALERIA Holding GmbH for greater investment in our other sales channels, thus ensuring the group’s future growth. In this way, we are strengthening METRO GROUP for our customers and in the interests of all our employees and shareholders.”

Both companies will hold a Press Conference this Monday at 11:15 h German time at the Cologne Marriott Hotel which will be broadcasted online. A dedicated invitation to the media will be sent out soon.

METRO GROUP will also invite to an analysts call, details will be sent out soon.

Prior to an HBC conference call for its investors and analysts later this morning, HBC intends to issue an additional press release providing further financial detail with respect to the transaction, structure and expected impact of the addition of GALERIA Kaufhof to HBC.

Note: Assumes € 1 = C$1.387
(1) 52 weeks ended May 2, 2015 for HBC and 12 months ended March 31, 2015 for Galeria.

About Galeria Kaufhof
GALERIA Holding GmbH is a group of companies with sales of EUR 3.1bn and 21,500 employees (2013/14 business year). It comprises the operating department store business of GALERIA Kaufhof GmbH in Germany (103 stores), Sportarena GmbH (16 stores) and GALERIA Inno in Belgium (16 stores). Galeria KAUFHOF and GALERIA Inno are market leaders in their respective countries and they interlink their online shops and their bricks-and-mortar business through a successful multi-channel strategy. GALERIA Real Estate Holding GmbH, as a subsidiary of GALERIA Holding GmbH, is responsible for the strategic development of the 59 inner-city retail properties under its management in Germany. GALERIA Real Estate Group contributes to maintaining and increasing the value of the real estate portfolio. GALERIA Immobilienservice GmbH is the subsidiary of GALERIA Holding GmbH that performs various services related to the department store properties.

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 39 U.S. stores, five international licensed stores and saks.com. OFF 5TH offers value-oriented merchandise through 83 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”.

About METRO GROUP
METRO GROUP is one of the most important international trading companies. In the financial year 2013/14, it generated sales of about €63 billion. The company operates around 2,200 stores in 30 countries and has a headcount of around 250,000 employees. The performance of METRO GROUP is based on the strength of its sales brands that operate independently in their respective market segments: METRO/MAKRO Cash & Carry – the international leader in self-service wholesale –, Media Markt and Saturn – the European market leader in consumer electronics retailing – Real hypermarkets and Galeria Kaufhof department stores.