HBC reports wider loss, will close some Lord & Taylor stores
Earnings report comes day after announcement of sale of online banner Gilt Groupe
Hudson's Bay Co. (HBC) said Tuesday it will close up to 10 of its Lord & Taylor stores through next year, as the company reported higher sales with a wider loss in its fiscal first quarter.
The announcement comes a day after HBC revealed it was selling its online banner Gilt Groupe to Rue La La.
The retailer said its quarterly revenue improved to $3.09 billion from $3.06 billion in the same quarter of last year.
However, the company's same-store sales, a key performance measure that tracks sales at outlets open at least a year, declined 0.7 per cent. HBC said its comparable digital sales increased by 7.7 per cent.
The company said its overall loss for the quarter came in at $400 million, compared to a loss of $221 million a year ago. HBC's loss from its continuing operations came in at $314 million, up from $214 million in the same period last year.
On a normalized basis, HBC says its loss per share for the quarter amounted to $1.22 compared with a normalized loss of $1.15 per share a year ago. Analysts on average had expected a loss of 87 cents per share, according to a Thomson Reuters poll.
Investors sent the company's stock down 1.5 per cent to $10.46 on the Toronto Stock Exchange on Tuesday.
As part of a turnaround plan, HBC said it will close up to 10 of the 51 Lord & Taylor stores it had at the end of its first quarter.
"We are also taking action to reposition Lord & Taylor for improved results and increased profitability," HBC CEO Helena Foulkes said in a release.
"With a new leader dedicated to evolving our experience and merchandise assortment to best meet customer expectations and shopping preferences, we will take advantage of having a smaller footprint to rethink the model and focus on our digital opportunities," she said.
The company also said it will close the Lord & Taylor store in its former flagship New York City Fifth Avenue location, which the company said back in October 2017 it was selling to office-sharing company WeWork. HBC had originally planned to maintain a smaller Lord & Taylor outlet in the building.
Retail analyst Jim Danahy of CustomerLAB said the move to close the Lord & Taylor stores reflects the "new normal" in a U.S. market that has more stores than customer business to support them.
"Everybody's got to rightsize," he said, adding that the U.S. is at least 50 per cent "over-stored."
Danahy said that means some stores will shut, while others will change in size to not only support traditional shopping, but also become distribution and return centres for online shopping.
with files from Meegan Read and The Canadian Press