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

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

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

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

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

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

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

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

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

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

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

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

Source: HBC

RioCan-HBC JV engages CBRE and Brookfield Financial Real Estate Group to explore possible sale of its Vancouver property

Expects to close $200 million mortgage; proceeds to be distributed to HBC and RioCan Real Estate Investment Trust

TORONTO and NEW YORK, 2017-Nov-01 — /EPR Retail News/ — RioCan-HBC JV (“JV”), a joint venture between HBC (TSX: HBC) and RioCan Real Estate Investment Trust (“RioCan” (TSX:REI.UN) announced today (October 30, 2017) that it has engaged CBRE and Brookfield Financial Real Estate Group to explore a possible sale of its Vancouver property located at 674 Granville Street and currently occupied under a long term lease by Hudson’s Bay.

Additionally, the JV expects to close on a $200 million mortgage on the same property, the proceeds of which would be distributed on a pro-rata basis to the JV partners. The mortgage is expected to be for a term of four years at a rate of prime plus 1.0% and has no prepayment penalty in the event of a sale of the property. BMO Capital Markets Real Estate Inc. is acting as the exclusive advisor on this financing.

“We are exploring a sale of this flagship property as the Vancouver real estate market has appreciated significantly over the past several years. While no decision to sell has been made, we continue to explore opportunistic transactions to enhance shareholder value,” stated Richard Baker, HBC’s Governor, Executive Chairman and interim Chief Executive Officer. “We are committed to operating our Hudson’s Bay store at this location and any possible sale would include the continued operation of Hudson’s Bay at this property.”

About the RioCan-HBC Joint Venture
A limited partnership between HBC and RioCan Real Estate Investment, the RioCan-HBC Joint Venture owns or controls ten flagship properties in major cities across Canada, including Vancouver, Calgary, Ottawa, and Montreal, as well as a 50% interest in Oakville Place and Georgian Mall. Formed in 2015, the JV has a mandate to explore future acquisitions that would grow and diversify its real estate portfolio. As of June 30, 2017, the JV was owned 88.1% by HBC and 11.9% by RioCan.

For HBC Shareholders
Certain statements made in this news release are forward-looking statements within the meaning of applicable securities laws, including, but not limited to, statements with respect to the closing of a $200 million mortgage on the JV’s Vancouver property located at 674 Granville Street and the expected distribution of proceeds on a pro-rata basis to the JV partners, the expectation that the mortgage will be for a term of four years at a rate of prime plus 1.0% and that the mortgage has no prepayment penalty in the event of a sale of the property, 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.

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, including, without limitation, the following factors, many of which are beyond HBC’s control and the effects of which can be difficult to predict: (a) the possibility that the anticipated benefits from the JV are not realized; (b) the risk that the JV will not be able to close on the mortgage as described herein; (c) that there can be no assurance that any sale of the property by the JV will occur or at what price and upon what conditions, or for which the ultimate proceeds of which are used; and (d) credit, market, currency, operational, liquidity and funding risks generally, including changes in economic conditions, interest rates or tax rates. 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 September 5, 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 forrd-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:
Tiffany Bourré
(905) 595-7184
tiffany.bourre@hbc.com

Source: HBC

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

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

Motor Fuel Group announces the appointment of Paul Deary as head of food services

Motor Fuel Group announces the appointment of Paul Deary as head of food services

 

Hertfordshire, England, 2017-Jan-30 — /EPR Retail News/ — Top 50 Indies forecourt operator, Motor Fuel Group (MFG) is pleased to announce the appointment of Paul Deary as its new head of food services.

Paul joins MFG from Applegreen plc where he was UK head of food operations, responsible for every new branded food development site opening with Subway, Greggs and Costa, alongside managing all aspects of their existing branded and non-branded food operations.

Before this, Paul spent five years as group operations manager for James Graven & Sons who at the time operated four service stations and two Budgens supermarkets.

Richard Baker, MFG’s retail director said: “This is a key appointment for MFG as we strive to build a first class ‘food to go’ offer for our customers.”

Contact:
Phone: +44 (0) 1727 898890
Fax: +44 (0) 1727 852318
Email: info@motorfuelgroup.com

Source: Motor Fuel Group

###

BRC calls on Government to put consumers first in the forthcoming Brexit talks

LONDON, 2016-Oct-10 — /EPR Retail News/ — The British Retail Consortium has called on Government negotiators to put consumers first in the forthcoming Brexit talks by ensuring their sights are firmly set on keeping shop prices low once the UK leaves the European Union.

Pledging a positive and constructive approach to achieving the best possible outcome from the negotiations starting in March, the BRC said in a letter to Secretary of State for International Trade Liam Fox that the Government’s strategy must focus on finding opportunities for lowering import costs as well as avoiding any increase in tariffs.

BRC CHAIRMAN RICHARD BAKER spelled out the importance of achieving trading arrangements with the rest of the world that do not put household budgets at risk.

“We will be supporting the Government through this complex and difficult process, helping them analyse how increased cost pressures on retailers could mean higher shop prices and identifying any opportunities for new trade deals that could benefit individuals and families” he said, launching the BRC’s Brexit campaign.

“The retail industry is the UK’s biggest importer, and has huge experience of importing from every corner of the world. We will be engaged in a constructive dialogue with government that will bring our experience to bear on the Brexit talks to the benefit of everyone in the UK” he added.

COST HEADWINDS

While UK retailers have been very successful in insulating consumers from the cost of rising business rates and labour, the recent devaluation of the pound in relation to our most important trading currencies is compounding economic headwinds, while years of deflation have left little margin to absorb added cost from import tariffs and administrative burdens.

Moreover, failure to strike a good Brexit deal by 2019 would have a disproportionately severe impact on retailers and their customers, because if the UK fell back on to World Trade Organisation rules the new tariff rates that the UK would apply to imports from the EU would be highest for consumer staples like food and clothing.

For example, the average duty on meat imports could be as high as 27%, while clothing and footwear would attract tariffs of 11-16% versus the current zero-rating for all EU imports.

Falling back on to WTO rules would also increase the cost of sourcing from beyond the EU.  The import cost of women’s clothing from Bangladesh would be 12% higher, while Chilean wine would be 14% dearer for importers. This contrasts with duty rates that would apply to raw materials and semi-finished products, many of which would be zero-rated or attract rates of duty of below 10%.

Undoubtedly, there will also be opportunities to reduce the costs of international trade outside the EU. Some of these may take time to materialise – free trade agreements typically take five or six years to negotiate.

But other opportunities to liberalise trade could be realised more quickly. For example, the UK would be free to adopt its own scheme of trade preferences (GSP) for developing countries as soon as it leaves the EU.

In adopting a national version of the GSP, the UK could look to expand the number of countries that could benefit, it could make it easier for goods to comply with the rules-of-origin that allow access to the tariff preferences and it could reduce the number of products that are currently exempted from the scheme.  Not only would this be good for UK consumers, it would provide a great boost to economic development in countries like Bangladesh, Kenya and Sri Lanka.

A FAIR DEAL FOR EU COLLEAGUES

The BRC will also be campaigning with other industry groups for an early end to the uncertainty facing EU workers now residing in the UK and contributing to our economy. The UK retail industry employs between 100,000 and 200,000 EU nationals, who make a huge contribution in every type of role from the boardroom to distribution centres and customer service. They deserve the reassurance that they will still be welcome here, whatever Brexit may bring.

FOCUS ON GROWTH

The third main platform of the BRC’s campaign will be a call on the Government to introduce only such domestic legislation and regulations on the retail industry that will promote growth during what will be a challenging time for retailers and the three million people they employ.

While retailers are happy to play their part in working for a constructive outcome to the Brexit talks, they will also be dealing with the impacts of a challenging economic outlook, intensifying competition and rapid structural change – making it considerably more difficult to protect consumers from the impacts of a greater regulatory burden.

Media Contact:

BRC Press Office
TELEPHONE: + 44 (0) 20 7854 8924
EMAIL: media@brc.org.uk
OUT OF HOURS: +44 (0) 7557 747 269

Source: BRC

The BRC announces Richard Baker as its new chairman

LONDON, 2016-Jul-26 — /EPR Retail News/ — The BRC is delighted to announce that Richard Baker will take the reins as Chair of the retail industry’s trade association this autumn. Richard, already on the BRC Board, will start his term of office as Chair on 1 September when Sir Charlie Mayfield stands down after a two-year term. Richard is Chairman of DFS, who are longstanding members of the BRC, and Whitbread, owners of Costa who are also members. He also holds various board and advisory roles with international companies including Aimia (owners of the Nectar Card) and Advent International.

He was previously Chief Executive of (Alliance) Boots Group Plc from 2003 to 2007 and prior to that was Chief Operating Officer at Asda Group Plc.

Richard Baker said: “I am very much looking forward to working with the BRC members and to chairing the BRC as its role becomes more vital than ever before. The BRC has a strong track record of championing the needs of British retailers – small, medium and large. A backdrop of unprecedented transformation in the industry and many external uncertainties provides a real opportunity to influence the future”.

Helen Dickinson, CEO, said: “Richard’s CV speaks for itself. His wealth and breadth of experience will be critical as we take the BRC forward through a period of profound political and economic change. At the same time, we owe a very large debt of gratitude to Charlie for his guidance, insight and support as our chair, during which time the BRC has undergone yet further transformation. We are especially grateful for Charlie’s support for the retail industry’s pay, progression and productivity work which has put the changing retail workplace landscape on the economic and political map”.

Sir Charlie Mayfield said: “It has been a privilege to have been the Chairman of the BRC over the past two years and a great pleasure to have worked with Helen and many in the industry in this period of change for the BRC. It is an organisation with tremendous potential and I’m sure that Richard’s strong record in both managing and chairing consumer businesses will serve the BRC well for the next phase of its development. I wish Richard and everyone at the BRC every success in the future”.

Press queries:

020 7854 8924

Source: BRC

Motor Fuel Group announces the appointment of Richard Baker as its new retail director

Hertfordshire, England, 2016-May-25 — /EPR Retail News/ — Top 50 Indies forecourt operator, Motor Fuel Group (MFG) is pleased to announce the appointment of Richard Baker as its new retail director.

Richard has had a varied and exciting 37 year career with Tesco. Joining them in 1978 as a part-time student, he very quickly progressed through the business in the UK, Northern Ireland and overseas. His final position with them was as managing director of their 800 UK superstores with annual sales of some £14bn.

After this very successful period with Tesco, Richard decided to leave them to pursue a new challenge.   So, immediately prior to joining MFG, he has spent the last year in America as a retail consultant with the Egremont Group assisting with a business transformation project for Walgreens who are one of the biggest pharmacy/convenience operators in USA with 8200 stores.

William Bannister, chief executive officer of MFG said: “This is a key appointment for us as MFG drives ahead with strengthening its retail offering. In this new role Richard will be responsible for the retail relationships with suppliers and driving the performance of sites while refining our retail, customer service and product proposition.”

Motor Fuel Group (MFG) is the second largest independent forecourt operator in the UK. It has 374 stations operating under the BP, Shell, Texaco and JET fuel brands.

Contact

Motor Fuel Limited
Building 2
Abbey View
Everard Close
St Albans
Hertfordshire
AL1 2QU

Phone:+44 (0) 1727 898 890
Fax:+44 (0) 1727 852 318
Email:info@motorfuelgroup.com

###

Motor Fuel Group announces the appointment of Richard Baker as its new retail director

Motor Fuel Group announces the appointment of Richard Baker as its new retail director

DFS Furniture FY15 sales up 7.0% to £913.1 million YoY

Doncaster, England, 2015-10-8 — /EPR Retail News/ — DFS Furniture plc, (the “Group”), the market leading retailer of upholstered furniture in the United Kingdom today announces its preliminary results for the 52 weeks ended 1 August 2015 (prior year: 53 weeks ended 2 August 2014).

Financial Highlights:

  • Group gross sales up 7.0% to £913.1 million (FY14: £853.4 million)
  • Group revenue up 7.5% to £706.1 million (FY14: £656.8 million)
  • Group adjusted EBITDA up 8.4% to £89.2 million (FY14: £82.3 million)
  • Group profit before tax £10.7 million (FY14: £3.6 million)
  • Continued strong cash generation : 1.8x net debt / adjusted EBITDA
  • Adjusted underlying EPS of 18.5p
  • Successful IPO and refinancing significantly reduce debt and future interest costs
  • Total dividend of 9.3p per share proposed, twice covered by adjusted underlying EPS

Operational Highlights:

  • Proven growth strategy on track:
    • UK stores
      • ƒFive new 10-15,000 sq. ft. DFS stores opened in UK and ROI
      • ƒDFS small store format successfully trialled in London: two more planned
    • Broadening our appeal
      • 75% growth in branded upholstery orders through DFS
      • Sofa Workshop and Dwell store base expanded
    • International
      • First Continental European store opened in The Netherlands in November 2014ƒ
      • Opened Rotterdam store in September 2015, with one further store to be opened in FY16
    • Full utilisation of retail space
      • ƒSix Customer Distribution Centres now operating successfully, releasing circa 70,000 sq. ft. of additional selling space
    • Online
      • Strong 17% growth in web sales
      • New in-store and at home technology increasing customer engagement
  • Continued strong increases in customer satisfaction scores; post-purchase NPS now above 80%
  • Partnership with Team GB for Rio 2016 Olympics

DFS Chairman Richard Baker said:

“The Group’s growth strategy is delivering positive results across multiple initiatives and there are still substantial further potential opportunities for DFS in both the UK and international markets under our current strategy. With the key macro-economic indicators for the upholstery sector all positive and our strategic initiatives on track, we can look to the future with confidence. “We have an exceptionally strong management team, a leading customer proposition, a financial model that is well adapted for the volatility in demand that the sector can experience, and a proven long-term growth strategy. DFS is well positioned to build upon its excellent progress in the year ahead.”

DFS Chief Executive Officer Ian Filby said:

“The Group delivered a good overall performance in FY15, outperforming the broader furniture market, and achieving record sales and operating profits. Furthermore we have made continuing progress across all strategic initiatives, giving me confidence that we will continue to deliver on our growth targets. The dividend we have recommended is a clear expression of our belief that we will continue to deliver both attractive earnings growth and cash returns for shareholders in the future.”

Note

Adjusted EBITDA means underlying profit before depreciation and amortisation, as adjusted for certain material, unusual or non-recurring items which the directors believe are not indicative of the Group’s underlying performance. In FY14, adjusting items totalled £2.3 million, principally the exclusion of initial trading losses associated with newly acquired businesses and the re-allocation of a discretionary incentive payment to the period to which it related.

Analyst Presentation

DFS will be hosting an analyst presentation at 9.00am today. There will be a listen only telephone dial-in facility available on +44 (0)1452 569 393. Callers should state that they wish to join the DFS Results Conference Call. The presentation slides will be made available on the Group’s website: www.dfscorporate.co.uk. A replay facility will be available for twenty-five days after the event. To access the replay please dial +44 (0)1452550000 and use pass code 48965391.

Enquiries:

DFS (enquiries via FTI)
Ian Filby (CEO)
Bill Barnes (Finance Director)
Mike Schmidt (Director of Corporate Affairs)

FTI Consulting
Jonathon Brill
Josephine Corbett
Tom Hufton
+44 (0) 20 3727 1000
dfsfurniture@fticonsulting.com

About DFS Furniture plc
DFS is the clear market leading retailer of upholstered furniture in the United Kingdom. We design, manufacture, sell and deliver to our customers an extensive range of upholstered furniture products. The business operates a retail network of upholstered furniture stores in the United Kingdom and Europe, together with an online channel. These have been established and developed gradually over more than 45 years of operating history. We attract customers to our stores and website through our substantial and continued investment in nationwide marketing activities and our reputation for high quality products and service, breadth of product ranges and price points and favourable consumer financing options.

SOURCE: DFS

HBS Global Properties acquires 41 GALERIA Kaufhof properties from Simon Property Group Inc. for €2.6 billion

Portfolio totals 83 properties with an Asset Value of $4.8 billion(1)

NEW YORK, LOS ANGELES & COLOGNE, Germany, 2015-10-5 — /EPR Retail News/ — HBS Global Properties, the real estate joint venture between Hudson’s Bay Company (“HBC”) (TSX: HBC) and Simon Property Group Inc. (“Simon”) (NYSE: SPG), is pleased to announce the acquisition of 41 GALERIA Kaufhof properties (the “Acquisition”) in a transaction valued at €2.6 billion (US$3.0 billion)(1)(2). Unless otherwise indicated, all amounts are expressed in US dollars.

With the Acquisition, HBS Global Properties now owns an international property portfolio of 83 marquee retail locations across the United States and Germany, including flagship department stores in Berlin, Beverly Hills, Cologne, Dusseldorf, Frankfurt, the greater New York area, as well as properties in other metropolitan and suburban centers. These properties generate annual cash rents of $274 million(1), valuing the portfolio at approximately $4.8 billion based on a blended cap rate of 5.75%.

“With the close of the Acquisition, HBS Global Properties is taking an important step forward in its next chapter of growth,” stated Richard Baker, Chairman, of HBS Global Properties. “This joint venture will benefit from a strong foundation of HBC properties, now including GALERIA Kaufhof, whose tremendous value has been recognized by our best-in-class partner.”

“In HBC, we have found a unique partner with a proven track record of creating value from retail properties, as well as a strong portfolio of banners that serve as attractive tenants for a range of retail opportunities,” said David Simon, Chairman and Chief Executive Officer of Simon. “As the Acquisition demonstrates, we continue to leverage our combined expertise to significantly expand and diversify the joint venture assets and increase its value for the benefit of investors.”

HBS Global Properties has established a dedicated management team to focus on overseeing the properties and growing the portfolio, with support from HBC and Simon. This team is headed by Lee Neibart, who has more than 40 years of real estate experience. Lee will lead an executive team comprised of Patrick Walmsley, Chief Investment Officer – USA, and Lutz Rupprecht, Chief Financial Officer and Managing Director – Germany, with the support of additional team members in both Los Angeles and Cologne.

“In a relatively short period of time, we have built a fantastic portfolio of properties,” said Lee Neibart, Chief Executive Officer of HBS Global Properties, “I am excited to work with our team in North America and Europe to continue to grow our portfolio through accretive acquisitions.”

In addition to pursuing attractive credit tenant, net-leased and multi-tenanted retail buildings in the United States and Europe, HBS Global Properties will have a mandate to explore similar international opportunities. The entity is structured to facilitate an IPO or other monetization of the joint venture at a future date.

(1)    Assumes a EURUSD exchange rate of 1.13
(2)    Represents value of properties after all transactions are completed, including the post-closing acquisition of certain real estate properties and the minority interest, expected to occur within 6 months.

Media Contact

HBS Global Properties

Andrew Blecher
Phone: (212) 391 3179
Email: andrew.blecher@hbc.com

 

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.