The 62-year-old Sherman joined Hudson’s Bay in July 2008 and is credited with helping to build teams at the Zellers and The Bay divisions in Canada and Lord & Taylor in U.S., and forming the Shared Services arm centralizing finance, IT, supply chain, logistics and store operations. Aside from streamlining, Sherman is credited with mounting efforts to capitalize on the Winter Olympics held in Vancouver in February.
“His job was to organize all this and put us in shape with strong leaders. He did his job,” said Richard Baker, governor and ceo of Hudson’s Bay Trading Co., the holding company for the divisions. The title of governor is the Canadian equivalent of chairman.
While Sherman’s departure seems abrupt, Baker said on Monday it was anticipated that Sherman’s run with HB wouldn’t be long. “It was the plan from the beginning. I took Jeff out of retirement,” Baker said. “The plan was to create four very strong operating companies with world-class management,” Baker added, referring to The Bay, Zellers, L&T and Shared Services. “We got our expense structure in very good shape, and created a new business plan for each operating company.”
He said the HBTC’s retail banners this year are operating with increased top and bottom lines “more so than we ever imagined,” and noted there is a seven-year vision embracing new merchandise and marketing as well as store renovations and downsizing, among other initiatives to improve productivity. That’s where division presidents and ceo’s Bonnie Brooks at The Bay, Brendan Hoffman at Lord & Taylor and Mark Foote of Zellers step up, rather than Sherman, whose reputation is more on the operations side. Sherman previously served as president and chief operating officer of Polo Ralph Lauren Retail, ceo of Limited Stores and president of Bloomingdale’s.
“The ceo’s of each company are running their businesses,” Baker said. They will now all report to Baker, instead of Sherman. “We are investing money all over the place, in the U.S. and Canada,” Baker said. The investment includes renovations at the Lord & Taylor in Manhattan, where the construction is under way on the main and 10th floors.
Baker said a successor for Sherman, who reported to Baker, is not being sought. Asked if there were any management or strategy differences between the two that could have triggered Sherman’s departure, Baker replied: “There was nothing like that. There were no differences. He set us up in excellent shape.”
Baker would not discuss details of Sherman’s severance or contract, other than to say: “It was obviously a shorter contract than other people because this was a short assignment.”
“There is nothing under the surface here,” Sherman added. “It’s a good-news, wonderful story to tell. It’s a great time to walk out recognizing everything you want to accomplish is done, and you don’t overstay. I had a very specific game plan: to do the diagnostics on the business, determine what was not working, help to understand how to get organization to succeed and bring in the right leadership to run the businesses long term. I’ve done that. Every business is ahead of where they thought they would be and each has new strategies for the future.” While Sherman would have been to some degree involved in some key hires, recruiting efforts involving Brooks, Hoffman and Foote began before Sherman got on board. They were all hired within a month or two after Sherman.
Sherman said he would take the summer off, search for a spot on a corporate board and possibly teach. But he added, “Who knows? Maybe there is another Richard Baker somewhere in the future. It’s not my intention to take another assignment like this, but two years ago, I didn’t think so, either.”
HBTC is owned by NRDC Equity Partners, which is controlled by National Realty & Development Corp. and Apollo Real Estate Advisors. In 2008, NRDC purchased Hudson’s Bay for more than $1.1 billion. In 2006, NRDC bought L&T for about the same price. NRDC continues to buy up real estate and is believed to be interested in acquiring another retailer. Shared Services, headed by Don Watros, chief operating officer, has offices in New York and Toronto and could put another retailer under its wings, Baker acknowledged.
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