By  on November 18, 2004

MONTREAL — Hudson’s Bay Co. of Toronto is launching a management reorganization in a bid to boost sales and come up with new retailing concepts as the company moves toward integrating its Bay department stores and Zellers discount operations.

Effective Feb. 1, Marc Chouinard, currently president and chief operating officer of The Bay and Home Outfitters, becomes president of HBC Merchandising Group. His new role will be to create a single merchandise and marketing function for HBC.

Thomas Haig, president and chief operating officer of Zellers, will become president of HBC stores and Specialty Divisions. He will be responsible for store operations, including HBC specialty chains Home Outfitters and the new Designer Depot, as well as developing or acquiring retail formats to meet customer needs. George Heller remains HBC chairman and chief executive officer.

“Effective Feb. 1, 2005, we will be making some senior-level changes to complete the HBC strategy of operating as a single retail powerhouse that serves our customer through several formats,” Heller said in a statement.

The move comes as HBC struggles to improve its performance in the face of stiff competition, notably from Wal-Mart Canada, which continue to take away market share.

HBC has focused on streamlining operations as a single company such as sharing logistics and even exchanging product. It has also moved to a single HBC loyalty program and credit card.

The executive changes are designed to help HBC reach its goal of $7.5 billion in sales converted from Canadian dollars by 2008 from $6.2 billion last year.

Retail formats would be designed to meet changing demands of consumers in areas where HBC excels, namely women’s apparel, children’s products, home decor and wellness products.

Retail analyst George Hartman of Dundee Securities, Toronto, said the changes make sense and compares them to what Federated Department Stores did in the U.S.

“They’ll have a single buyer for both chains for things like toys and separate buyers for apparel. It’s more of a sales increase move than a cost-cutting move. They’re thinking more outside the box.”

But Richard Talbot of Richard Talbot Consultants, Unionville, Ontario, compared the executive changes with “shuffling the chairs on the Titanic. It’s a cycle they go through from time to time, like when they transferred the Zellers head office from Montreal to Toronto where HBC is headquartered.“I suppose it will be more streamlined to drive more costs out of the company, but underlying all this is the persistent rumors of Target stores taking over Zellers,” Talbot said.

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