December 9, 2014
Higher same store sales and its purchase of Saks Inc. last year helped Hudson’s Bay Co. post a smaller quarterly loss in the third quarter.
The company had a $13 million net loss and profits of $116 million, both improvements from the same time last year. Same-store sales rose 1.7% in the third quarter.
“We are pleased with our third quarter financial performance,” stated Richard Baker, HBC’s governor and CEO. “We remain on track with our integration of Saks and continue to gain traction on our strategic growth initiatives, especially at HBC Digital where we experienced substantial sales growth. We are well-positioned for the holiday shopping season with a value proposition underpinned by differentiated merchandising and superior customer service initiatives across all our banners. We remain confident in achieving our financial performance targets for fiscal 2014.”
Total sales at HBC nearly doubled to $1.913 billion, from $984 million a year earlier. The increased sales was mostly a result of the Saks Fifth Avenue acquisition, although e-commerce sales also grew. Hudson’s Bay said it is on track to meet its 2014 guidance, which calls for sales of between $7.8 billion and $8.1 billion and normalized earnings of between $580 million and $620 million.
The company also announced it has appointed Ian Putnam to the position of EVP-chief corporate development officer. Putnam has advised HBC since 2008 and has acted on the company’s behalf in all of its major corporate transactions since that time. Last month the company outlined a $1.25 billion refinancing plan to reduce interest payments on debt it took on after buying Saks. Hudson’s Bay bought Saks for $2.4 billion and assumed $500 million of the U.S. company’s debt.
“We continue to progress on the five core strategies of our long-term plan to grow our sales. We remain committed to driving digital sales across all our banners, growing OFF 5th, bringing Saks Fifth Avenue and OFF 5th to Canada, driving outsized growth at our top doors and driving synergies and efficiencies across our business. In addition, our recently completed US $1.25 billion, 20-year mortgage on the ground portion of our Saks Fifth Avenue flagship in New York City has strengthened our financial position by providing long-term, fixed-rate capital on highly attractive terms,” Baker said.
Hudson’s Bay Co. operates 170 Lord & Taylor, Saks Fifth Avenue and Saks Fifth Avenue OFF 5th stores in the United States.
Source: Retailing Today
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