Since its founding in 1670 as a Canadian fur trader, Hudson’s Bay Co. has established itself as a company of adventurers. And those adventures continue today as the Toronto-based retailer, which owns both Hudson’s Bay and Lord & Taylor, absorbs its newest acquisition, Saks Fifth Avenue.
This story first appeared in the April 3, 2014 issue of WWD. Subscribe Today.
Touted as the “oldest continually operating company in North America,” HBC has worked diligently to modernize its stores and make them relevant to today’s customers. Men’s wear is considered one of the biggest growth areas, and the store is expending a lot of time and resources to capture those opportunities. At L&T, for example, the company recently completed a major overhaul of the men’s area at the New York City flagship that included the addition of an extra floor and a revamping of the merchandise mix.
Liz Rodbell, president of Hudson’s Bay and Lord & Taylor, who cut her teeth in men’s wear as general merchandise manager of men’s at L&T in the Nineties, said: “As a company of adventurers, we’re on a mission to transform our men’s business.”
She ticked off five strategies the company is employing to achieve that goal, the first of which is to “build the team.” In 2012, HBC created a department store group to integrate the best executives and practices of both Hudson’s Bay and L&T “while retaining each banner’s unique personality.” By consistently communicating with the team, the organization as a whole can achieve success. This dialogue has resulted in the company’s creation of a “customer experience” position, which is designed to improve customer service by making sure inventories are in line with demand both in stores and online. Additionally, “this year we have set out to deliver a ‘customer-first’ experience across all of our touch points,” she added. Creating a “customer-centric culture” is at the heart of Rodbell’s mission. She related how she and her husband took a road trip across Canada last summer “to see the country — our very own version of a Canadian adventure.” They stopped to visit as many Hudson’s Bay stores as possible, and “what struck me was the relationship our staff had with our customers; the associates treated the customers as if they were guests in their own home.” This “ precise understanding of our customer” is also central to Rodbell’s vision to how the stores can succeed in men’s.
It’s also essential that the stores “get in the game,” she said. “As retailers, we can talk about ideas, but it’s risk-taking that transforms us into adventurers. We have to be in it to win it.”
The company became the official outfitter of the Canadian Olympic team in 2006, creating uniforms for the athletes and selling the product in the stores and online. This initiative resulted in the retailer raising $28 million for Canadian athletes and catapulting HBS beyond its position as “just a department store,” she said.
This campaign also “resonates with our men’s customers,” she said. “This demonstrates that we’re ‘in the game’ of understanding them and, ultimately, dressing them.”
Her third mission is to create differentiation within the product offering. Six years ago, the company tapped designer Joseph Abboud to create an exclusive brand for L&T called Black Brown 1826 to fill a “void for modern product with unique styling.” Since then, the brand has rolled out across all Hudson’s Bay stores and is “one of our best-selling brands.” A luxe offering launched last year has also performed well, and footwear will be added for fall. The success of this brand served as the “blueprint” for 424 Fifth, the company’s recently introduced women’s wear collection.
The fourth mission is to evolve the in-store merchandising to “fit the demands” of today’s men’s wear shopper, one that would be “visually compelling with commanding product.” Stores have been reclassified by category — tailored, classic, modern and denim — and key brands were added. Twelve stores have been renovated so far, including the flagships in New York, Vancouver and Toronto, and the remainder have been re-merchandised to reflect this positioning.
One of the most popular brand additions has been Topman, which was added to Hudson’s Bay stores in Canada in 2011. “These shops-in-shop offer not only the merchandise, but also the actual Topshop and Topman experience,” Rodbell said, and have resulted in attracting “an entirely new customer. Now we’re attracting younger, hipper guys who had never considered shopping in a department store. He comes in for Topman and stays to check out our other merchandise. In 2013, 60 percent of these new customers cross-shopped in Hudson’s Bay.”
The store’s final mission is to improve its digital offerings, and the company has created an HBC Digital division to exploit the potential. “We no longer talk about brick-and-mortar stores versus e-commerce. For us, it’s just retail,” she said. “This is the biggest adventure and fastest growth category. The size of our brand potential is no longer based on our real estate location and store size; it’s based solely on the strength of the brand.”
It also allows the retailer to expand beyond its physical footprint and offer an expanded assortment. For example, the company operates only one Lord & Taylor store in the southern U.S., in Florida, but is embarking on “an aggressive digital marketing campaign geo-targeted in the South.” And the online offering is also being beefed up in areas such as men’s big and tall. “For men’s, there is a huge opportunity in the digital space. Men’s wear is one of our fastest-growing categories online.”
Within the brick-and-mortar stores, the retailer is employing digital technology, offering mobile payments and electronic receipts as well as in-store mapping.
In conclusion, Rodbell said that over the past few years, HBC has “transformed our men’s business by focusing on merchandising, in-store experience and marketing. But this is just the tip of the iceberg. Our overall mission is to have commanding fashion assortments with compelling value in a dynamic environment. In men’s wear, the great adventure we’re on is becoming a destination to wardrobe him for all of his life’s adventures.”