Hudson’s Bay Co. posts loss of $54 million
As retailer builds up locations, Amazon unveils new fashion store with free shipping, returns
FRANCINE KOPUN Hudson’s Bay Co., which reported a $54-million loss in the first quarter of 2015 as Target Canada liquidated its merchandise, now has another competitor nipping at its heels — Amazon.ca.
Early Wednesday, Amazon.ca launched an online clothing and shoe store, with more than 1.5 million items, including brands such as Levi’s, Dockers, 7 For All Mankind, True Religion and Vince Camuto, all tried-and-true brands sold at Hudson’s Bay stores.
Amazon.ca is also offering free shipping and free returns on products shipped by Amazon — but not from third-party retailers using the Amazon platform, said Alexandre Gagnon, country manager for Amazon.ca.
Free return shipping will appeal to online shoppers who order multiple items to try on at home, sending back the items that don’t fit or live up to their expectations, a practice that adds significant costs to sales.
The new Amazon.ca site features clothing and ac- cessories for women and men, popular shoe brands and curated looks.
Gagnon said the decision to expand what Amazon.ca has to offer was driven by information collected on searches for brands and items on the site, as well as surveys.
“More and more people are looking for shoes and apparel online,” said Gagnon.
In fact, the selection of items on the site has nearly doubled in the past year, according to the company.
The additions arrive as Hudson’s Bay is engaged in building up existing bricks-and-mortar stores and launching Saks Fifth Avenue in Canada, as well as pursuing acquisitions abroad — it is one of the bidders hoping to buy Germany’s Kaufhof department stores.
A year ago, Hudson’s Bay reported an overall profit of $176 million in its first quarter, but that was due to a $308-million gain from the sale and leaseback of its Queen Street flagship store and Simpson Tower office complex in Toronto.
Without that hefty benefit, the retailer was left to rely on its overall performance in the first quarter of this year.
Adjusted losses, which filter out several one-time factors, deepened to $33 million from $27 million.
On a per-share basis, the adjusted loss was 18 cents, compared to analyst estimates of five cents per share.
Selling and administrative expenses were higher, increasing 15 per cent to $780 million, and cost of sales rose 7.6 per cent to $1.23 billion.
Overall sales were stronger, rising 11.7 per cent to $2.07 billion, on particularly strong growth at Saks Off Fifth discount outlet stores in the U.S.
Same-store sales, which measures the overall performance at stores that have been open for at least a year, were higher at all of its banners, rising 2.7 per cent after adjusting for currency fluctuations.
Currency adjustments and the liquidation of Target Canada, also affected the performance, said Richard Baker, the company’s executive chairman.
Target’s closure left shoppers sifting through the final inventory of the discount-chic retailer as it shuttered the last of its Canadian stores in April.
“During some weeks (the impact on us) was negative as they were doing their fierce liquidation sale,” Baker said.
“In general, it’s a positive development for our business to have such a significant competitor no longer in business.”