Hudson’s Bay Co. remains steadfast in charting a course that sees it playing across all channels of commerce.
The Toronto-based department store retailer — whose portfolio includes Saks Fifth Avenue, Lord & Taylor, Hudson’s Bay and Gilt among others — revealed a few more details to shareholders during its annual meeting Friday about its plans in Europe with its acquisitions there of Galeria Kaufhof and Galeria Inno and its plans for the Saks brands in Canada.
“HBC is a unique company, which I believe represents the future of retail,” Hudson’s Bay Co. chief executive officer Jerry Storch told shareholders today. “We are making the right aggressive moves in a rapidly evolving retail environment. First and foremost, we are operators and spend the vast majority of our time focused on improving our existing retail operations. This is what drives us everyday and I think you can see that this is why we had industry-leading results in 2015. Beyond this, we are consolidators and consolidation is…inevitable and desirable in this environment.”
The company’s dip into Canada with the Saks full-line stores and Off Fifth stores are “seeing excellent results,” Storch said. There’s also opportunity for some 40 Saks Off Fifth stores in Germany and more elsewhere in Europe.
The company’s recent announcement of expansion into the Netherlands, via its namesake and Saks Off 5th divisions, is expected to see as many as 20 stores open there in the next two years on high street locations. The first of those stores are slated to begin opening in the second half of 2017.
The company’s more recent acquisitions of Galeria Kaufhof and Galeria Inno parent Galeria Holding provided an immediate footprint in Europe. Hudson’s Bay executive chairman Richard Baker likened that business to what Hudson’s Bay’s business looked like five years ago in an effort to underscore the company’s belief in the potential growth opportunity of the Galeria business. The company’s now slowly bringing some of its North American labels to the German market via the Galeria store brands.
Hudson’s Bay is also focused on the back end and leveraging synergies across the portfolio and in the data digital business Gilt Groupe brings. Gilt, with more than 9 million members and about half of its orders being generated from mobile, will slowly integrate into the Saks Off Fifth concept, the first of which is already operating in Manhattan.
“Successful retailers of the future are the ones who can combine in store and offline,” Storch said.
To that end, the company’s in the process of combining the back-end systems of its North American web sites, while installing fulfillment technology in its warehouses. The first of that technology is being installed at the company’s distribution center in Scarborough, Ontario. That’s set to go live in a few months, before being rolled out to the company’s U.S. distribution centers.
The formation of real estate joint ventures with Simon Property Group and RioCan Real Estate Investment Trust has helped pay down debt with the company continuing to reiterate plans for an eventual initial public offering. Still, it has yet to commit to timing on an IPO.
Hudson’s Bay Co. capped its fiscal year ended Jan. 30 with companywide sales up 36.6 percent from the year-ago period to 11.2 billion Canadian dollars, or $8.66 billion based on current exchange rates. Net earnings for the year grew to 387 million Canadian dollars, or $299 million, which compares with 233 million Canadian dollars, or $180 million, in the year-ago period.