Hudson’s Bay reports smaller overall loss
TORONTO — Hudson’s Bay Co. is getting a helping hand from a competitor that went out of business, but even that boost hasn’t been enough to keep the company from reporting a loss.
The department store giant’s chief executive officer Helena Foulkes revealed in a Wednesday earnings call that “we have certainly capitalized this year on the closing of Sears.”
The Toronto-based company also shared that the January closure of Canadian Sears stores and HBC’s Saks Fifth Avenue luxury brand both helped it deliver a smaller overall third-quarter loss than last year.
The retailer’s net loss for the period ended Nov. 3 was $164 million or 69 cents per share, including discontinued operations. That’s down from last year’s third-quarter net loss of $243 million or $1.33 per share, including discontinued operations.
However, there were some bright spots in the company’s earnings. Sales across the HBC brands increased by 5.6 per cent to $2.2 billion, as sales from Saks Fifth Avenue grew by 7.3 per cent, making it the sixth quarter of consecutive growth.
Digital sales also spiked by eight per cent, largely because the company’s popular Bay Days sales event moved from the fourth to the third quarter.
The company has been defending itself from recent criticism from its most vocal critic, activist investor Land and Buildings Investment Management LLC.
In a letter sent to shareholders in late November, Land and Buildings hammered HBC’s board for failing to take decisive action to unlock value for shareholders.
Land and Buildings said it believes HBC could double or triple its share price and find benefits by selling Saks Fifth Avenue, its remaining 50 per cent interest in its European business to Signa Holding GmbH, and
Lord and Taylor to a mass merchant.
It also believes HBC should pursue real estate investment trust status for its Canadian real estate and sublease excess space at its Bay department stores.
HBC did not comment on the matter on its Wednesday call.
Instead, it focused plenty of its time on discussing its European efforts. HBC listed its European arm as a discontinued operation after agreeing to sell its controlling interest during the second quarter.
HBC Europe had $974 million of sales in the third quarter and a net loss of $41 million, down from $107 million.
It also struck a deal to merge its German department stores with its biggest rival in the European market, Signa Retail Holdings.
“We’ve taken bold actions to streamline the retail business,” said Foulkes.
“The European partnership with Signa creates a stronger, better, capitalized retailer that’s well positioned to succeed in the market.”