Hudson's Bay Co. quarterly loss widens on heavy discounts
Company trying to fend off fierce competition from Amazon and Nordstrom
Canadian department store operator Hudson's Bay Company reported a bigger third-quarter loss on Tuesday, hit by higher discounts at luxury chain Saks Fifth Avenue and weak sales at its namesake stores.
The company has been trying to fend off fierce competition from e-commerce retailers including Amazon.com as well as from other department stores Macy's and Nordstrom.
Hudson's Bay has been shutting stores and divesting assets, including its Lord + Taylor department store business, to shore up finances and focus on its luxury department store chain Saks Fifth Avenue and Hudson's Bay in Canada.
"Across the industry, there was a pullback among luxury consumers, allowing shoppers to more frequently take advantage of markdowns, which ultimately reduced full-price sales," Helena Foulkes, Hudson's Bay chief executive officer, said in a statement.
Foulkes added that the company's 15 per cent growth in digital sales and tight lid on cost and inventory were not enough to deliver the financial performance it wanted in the third quarter.
Comparable sales at Saks Fifth Avenue fell 2.3 per cent in the quarter, while that at the company's namesake stores decreased 3.9 per cent.
The company's net loss widened to $226 million, or $1.23 per share, in the quarter that ended Nov. 2, from $161 million, or 88 Canadian cents per share, a year earlier.
Total revenue fell to $1.84 billion from $1.89 billion.
The company in October agreed to a $1.9 billion go-private deal with a consortium led by its chairman Richard Baker, but is facing resistance from minority shareholders including Catalyst Capital Group, which has offered a higher counter-bid.