Hudson’s Bay Co. narrowed its loss last quarter amid sales gains in Canada, but the retailer wasn’t firing on all pistons.

This story first appeared in the June 13, 2013 issue of WWD. Subscribe Today.

On Wednesday, the Toronto-based HBC posted a first-quarter net loss of 80.7 million Canadian dollars, or 67 cents a share ($79.3 million, or 66 cents, at current exchange). That’s an improvement over the year-ago loss of 129.7 million Canadian dollars, or 22 cents.

Sales during the quarter ended May 4 grew 4.2 percent to 884 million Canadian dollars, or $869 million. Sales grew 4 percent on a comp basis.

On a “normalized” net basis, which excludes restructuring, acquisitions and certain costs outside of day-to-day operations, the company lost 14.3 million Canadian dollars, or $14 million. A year ago, the normalized net loss was 23.3 million Canadian dollars.

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A year ago, the average currency exchange rate was virtually even.

The 90-unit Hudson’s Bay division in Canada last quarter saw same-store sales grow 7.6 percent, driven by men’s apparel, ladies’ shoes, cosmetics, handbags, accessories, certain home categories, e-commerce sales, and the five Topshop/Topman shops inside Hudson’s Bay locations which the company said are generating over $500 in sales per square foot. Five more Topshop locations are being built this year inside Hudson’s Bay stores.

“We are having discussions with different types of retailers to do similar types of partnerships,” HBC’s chief executive officer Richard Baker said during a conference call. There has been speculation about Uniqlo, but the company has declined comment on that.

Sales at the 48-unit Lord & Taylor in the U.S. declined 1.4 percent on a U.S.-dollar basis, which the company blamed on customers staying home due to bad weather. There was strength in men’s apparel, handbags, accessories and cosmetics, while ladies’ apparel and shoes were weak. “Sandals or other warm weather merchandise in the first quarter has not sold as it has in the previous year,” Baker said. “The trend in colored denim was really against us this year. It was so big and so hot last year and just went away much faster than we or anyone else believed.”

Aside from rolling out Topshops, HBC, which went public last November, is seeking productivity gains through renovations that are currently occurring at four Hudson’s Bays and four Lord & Taylor units; by increasing private brand assortments, and via e-commerce and omni-investments including relaunching the dot-com businesses with larger assortments and growing fulfillment capabilities and social media and marketing programs. E-commerce sales were 31.1 million Canadian dollars, or $30.6 million, an increase of 32.8 percent over the first quarter of 2012.

The goal at L&T is to get comps up to 2 or 3 percent. Baker said he is happy with the new L&T in the Ridge Hill shopping center in Yonkers, N.Y., and might expand it. However, the store in the Mall at Rockingham Park in Salem, N.H., is off to a slow start. L&T’s next opening will be in Boca Raton, Fla., in October. The 69-unit Home Outfitters division in Canada is also slow, tracking negative single-digit comps. “Their sales issues in the first quarter were very much tied to outdoor furniture and seasonal goods,” Baker said.

Still, Baker said the company is gaining market share in Canada, including “a little piece from Sears, from shoe retailers, jewelry stores and small shops in the middle of the mall.”