Job cuts and consolidations shook The Bay and Lord & Taylor department stores this week.
This story first appeared in the February 3, 2012 issue of WWD. Subscribe Today.
The changes were triggered by the Canadian parent Hudson’s Bay Co., which is streamlining to enhance earnings and efficiencies and achieve its goal of going public, possibly this year.
Ten executives were given pink slips, but others were given enhanced roles and responsibilities extending to both department store chains. Now the company is down to one team of general merchandise managers instead of two. So, for example, a general merchandise manager of sportswear will work for The Bay and Lord & Taylor. The stores carry many of the same brands, making integrations in merchandising and other functions easier to accomplish.
Past consolidations have largely been back of the house. The creation of the shared services unit at the Canadian headquarters in Toronto for finance, IT, supply chain, logistics and store operations in 2009 led to layoffs. Yet last week, there was a big management shift that saw Bonnie Brooks become president over the merchandise, marketing and store operations for both Lord & Taylor and The Bay, and filling responsibilities held by L&T’s chief executive officer Brendan Hoffman, who resigned to become ceo of The Bon-Ton Stores Inc. Previously, Brooks ran just The Bay.
At the same time, Donald Watros, chief operating officer overseeing the operational, financial and merchandise planning sides of the businesses, added to his responsibilities by taking over some that were Hoffman’s.
Among those dismissed Wednesday were Lord & Taylor veterans Mary Beth Sheridan, senior vice president and head of stores; Carol McCabe, general merchandise manager of dresses and sportswear, and Scott Divine, the head of visual. They averaged about 20 years at the store. The other cuts were believed to have occurred at The Bay, where executives were informed of the changes Thursday.
On the rebuilding side, HBC placed several executives in bigger roles, including:
• Liz Rodbell, executive vice president of merchandising at Lord & Taylor, who becomes executive vice president for HBC, which is The Bay and Lord & Taylor, with all the gmms reporting to her.
• Debbie Edwards, chief operating officer and senior vice president of stores at The Bay, is now executive vice president of store operations for HBC.
• Mary Turner, formerly senior vice president for The Bay, becomes executive vice president for private brands design and development for HBC.
• Jarrod Johanns, formerly senior vice president of planning and allocation at Lord & Taylor, becomes executive vice president of planning and allocations for HBC.
Rodbell, Edwards and Turner report to Brooks, while Johanns reports to Watros.
At the senior vice president and gmm level,
• Jonathan Greller, formerly at Lord & Taylor overseeing men’s, children’s and intimate apparel, will now oversee all women’s apparel for Lord & Taylor and The Bay.
• Wayne Drummond, formerly overseeing men’s at The Bay, will cover men’s, children’s and luggage for Lord & Taylor and The Bay.
• Lord & Taylor’s Mary Anne Morin, for accessories and footwear, now works for The Bay and Lord & Taylor and adds intimate apparel.
• Shelley Rozenwald, senior vice president, general merchandise manager of cosmetics for The Bay, will now oversee cosmetics at The Bay and Lord & Taylor.
• Barbara Zinn Moore becomes vice president of cosmetics at Lord & Taylor.
In other changes, Suzanne Timmins has become vice president and fashion director for The Bay and Lord & Taylor. She was The Bay’s fashion director. Alison Coville, senior vice president for center core, shoes, luggage, accessories and jewelry for The Bay, has become senior vice president for private brands at Lord & Taylor and The Bay for the center core, home and HBC Signature categories.
The flurry of changes at HBC in the past two weeks has fueled concerns of further cuts. However, when asked if there are more to come, a spokeswoman for HBC told WWD: “There is no plan to consolidate the buying function to Canada or the U.S. This is truly an integrated leadership team with separate buying functions. This is not a consolidation. It’s an integration at the senior leadership level. There will be no more cuts.”
She also said the marketing functions for The Bay and Lord & Taylor “remain separate.”
The $4 billion HBC, which has 65,000 employees, intends to eventually launch an initial public offering on the Toronto Stock Exchange and issue around 20 percent of the company. Last month, HBC invested $427 million in Lord & Taylor to reduce much of the U.S. retailer’s debt stemming from the 2006 purchase of L&T from Macy’s Inc. (at the time called Federated Department Stores Inc.) in a highly leveraged deal valued at more than $1 billion.
HBC’s Canadian operations include the 92-unit The Bay department store chain; the 160-unit Fields discount chain; the 69-unit Home Outfitters, as well as Zellers, which is being phased out and taken over in many locations, with many leases being taken over by Target. In the U.S., HBC operates the 48-unit Lord & Taylor.
The Bay, a lumbering, overspaced department store, has shown some agility. It recently underwent a massive editing process, dropping some 800 of its 1,200 brands, introducing 150 others with a more modern and less moderate appeal, and shifting emphasis to higher productivity categories. The Bay is launching Topshop boutiques inside its stores, and a couple of years ago, its designer floor, called The Room, was relaunched at the Toronto flagship. Yet there is still work to be done. The Bay has 15.5 million square feet of space and seven flagships each with between 300,000 and 700,000 square feet.
Lord & Taylor has also made some major changes since being acquired by HBC, including a $25 million makeover of the Fifth Avenue flagship. Aside from launching its first two outlets and first two home stores last year, Lord & Taylor will add its first new stores in 10 years, when units open this spring in Yonkers, N.Y., and Rockingham, N.H.