Byline: Brian Dunn

MONTREAL — The Martha Stewart and Delta Burke lines of linens and plus-size apparel, respectively, will soon arrive on retail floors in small-town Canada under a new store format being launched by Toronto-based Hudson’s Bay Co.
Company president and chief executive officer George Heller told the annual meeting last week that HBC plans an August launch of Zellers Select, a mini version of the company’s Zellers division, in smaller markets that couldn’t support either a traditional Zellers or Wal-Mart store.
Zellers Select will be created by converting the company’s 23 Best Value stores into the new format, which will carry a scaled-down selection of in-house brands such as Martha Stewart, Delta Burke and Cherokee. New stores will be added gradually in rural areas.
“We will bring the strength and value of all the Zellers captive and private brands, along with highly competent assortments of national brands and everyday needs to underserved markets,” said Heller.
The company is also looking at ways to get shoppers to frequent both Zellers and The Bay stores through cross-promotions and by allowing Bay and Zellers credit-card customers to use either card at both chains. In addition, the company plans to launch its online shopping site by mid-October.
Despite recording a loss, Heller said the company continues to improve its bottom line with its best first quarter in six years.
He told shareholders that for the three months ended April 30, HBC had a net loss of $4.42 million or eight cents a share, versus a loss of $14 million or 19 cents a year earlier. Sales increased 4.4 percent to $1.056 billion from $1.011 billion. All figures are converted from Canadian currency at the current rate.
Sales at The Bay department stores increased 11.4 percent during the period, while sales at Zellers stores, which largely compete with Wal-Mart Canada, rose only 0.9 percent.
“Our first-quarter results reflect our balanced approach of increasing revenues and margins while at the same time improving our balance sheet,” Heller said.