Hudson's Bay Company is cutting roughly 2,000 jobs as part of a reorganization, as the retailer reported lower quarterly sales.
The company said the cuts, which include some that had been made back in February, will make it more nimble and streamline its decision making.
HBC also said it is creating distinct leadership teams for its Hudson's Bay and Lord & Taylor store chains.
- HBC shares slip after company reports softer sales
- Hudson's Bay posts $152-million quarterly net loss
The company said it expects more than $350 million in annual savings when the reorganization plan is fully in place by the end of its 2018 fiscal year. HBC said moves needed to secure $125 million in savings are in place as of today.
"These savings are required to help offset revenue, margin and cost pressures the company is facing as a result
of the current environment," HBC said in a statement.
In conjunction with the news of its reorganization, HBC reported first-quarter retail sales were $3.2 billion, a decrease of $100 million, or three per cent, from the prior year.
- Hudson's Bay Co. reportedly shopping for Macy's
- HBC says sales slump will be a drag on earnings this year
The company said it lost $221 million in the first quarter, compared with $97 million in the prior year's period.
"This was a tough quarter for HBC," Richard Baker, HBC's governor and executive chairman, said in a release.
"While the retail apparel market remains particularly challenging, we are taking steps to adapt, beginning with our transformation plan announced today," Baker said.
He said the company was allocating more resources "to accelerate the opportunity we see online," while running its bricks and mortar stores more efficiently.
Bruce Winder, co-founder and partner at Retail Advisors Network, said he wasn't surprised by HBC's move, saying the company had been through a number of tough quarters and signalled in the previous period there would be some fairly drastic moves to lower costs.
"They're in a channel that is in some pretty tough waters, ie. the department store channel," Winder told CBC's Meegan Reed.
Founded in 1670, HBC is the oldest company in North America. It has 480 stores in North America and Europe, and employs more than 66,000 people.
Its stores include Hudson's Bay, Lord & Taylor, Saks Fifth Avenue, Gilt and Saks OFF 5TH. In Europe, it has Galeria Kaufhof, Germany's largest department store group, and Belgium's Galeria INNO.
HBC shares finished Thursday down 11 cents, ending at $9.62 on the TSX.