Hudson’s Bay Co., which has been growing rapidly through acquisitions, on Tuesday said it will cut 265 non-customer facing positions across the company to save $75 million on an annualized basis beginning in 2016. It also will form three “centers of excellence” for customer relationship management, creative and human resource functions.
The $75 million in savings is in addition to the $100 million in savings being attained through synergies via the acquisition of Saks Fifth Avenue in 2013. The company anticipates taking a charge of about $20 million in the third quarter of fiscal-year 2015 in connection with the realignment.
The centers of excellence are central units serving the North American operations of HBC, which include Saks, Hudson’s Bay, Lord & Taylor and Saks Off 5th. Heading up the three centers are Dan Caspersen for human resources, Mark Briggs for creative and Aaron Shockey for CRM.
HBC already operates central centers for its digital, information technology, legal, logistics and real estate functions.
The 265 cuts are occurring across many areas of the company involving the different retail banners and headquarters.
Richard Baker, HBC’s governor and executive chairman, commented that the company’s rapid growth, both organically and through acquisitions, “has created meaningful opportunities for us to further build our business while operating even more effectively. To that end, we are focused on taking the appropriate next steps to position HBC to deliver continued industry-leading performance and long-term growth, while best delivering for our customers in a constantly evolving industry environment.”
HBC chief executive officer Jerry Storch said, “By enabling our teams to work smarter, faster and more effectively, we expect to achieve substantial cost savings and continue to invest in our core strategies to build our business, drive further improved financial performance and support the long-term vision of HBC.”
In addition to the consolidations, HBC said it would implement substantial technology enhancements and accelerate the consolidation to one common platform across company banners, under the leadership of Janet Schalk, chief information officer, and Dion Rooney, executive vice president, HBC digital.
Storch told WWD that the 265 jobs represent less than 1 percent of HBC’s workforce of 44,000 and that some of those losing jobs could be rehired in different positions. “For a company that’s grown through acquisition, it makes a lot of sense to consolidate certain functions,” Storch said.
He said the centers for excellence provide “a more standardized approach across all retail banners” and that in the case of the creative center, “We can take work that has been from outside agencies and bring it inside” the company.
Storch emphasized that the cuts are being made at headquarters and across HBC retail banners, though the company is being “very careful to focus on continuing the great customer experiences we have in our stores. None of the cuts are with employees serving customers on the front lines.”
He added, “We remained focused on growing our business. Today’s moves are as much about doing a better job as they are about savings. The bottom line on today is that this is a growth company and this alignment is to make us more effective and efficient.”