Hudson’s Bay Co. on Wednesday reported that fourth quarter retail sales rose 2.1% to $4.7 billion Canadian, as overall company same-store sales fell 2.4% to $110 million. Total sales include a 14th week of sales, whereas same-store sales are on a 13-week basis. The additional week and opening of new stores contributed some $267 million, partially offset by lower same-store sales, the impact of closed stores and a negative foreign exchange impact.
Same-store sales at its Saks Fifth Avenue unit rose 2.1%, the third consecutive quarter of increases, while its Hudson’s Bay stores had their 30th straight quarterly same-store sales rise. Same-store sales in Europe fell 3.4%.
The company opened 29 stores last year, including 12 in the Netherlands, and closed 17 in Europe and 10 in Canada. Store growth will slow this year, with only 10 slated to open and nine to close, executives told analysts on Wednesday, according to a transcript from Seeking Alpha.
New CEO Helena Foulkes, who says she’s spent the last few months visiting stores across the company, told analysts that it’s too "early to talk about our overall strategy, but it is clear that things do need to change," adding that she sees "tremendous opportunity to operate at a higher level, both for stores and digital."
Despite headwinds in Europe, Hudson’s Bay is staking much of its growth there, specifically in Germany, where Foulkes said the focus is on refining product assortments and reducing overhead expenses. She also sees potential in driving growth on the company’s digital side and in off-price but said that missteps have to be addressed, particularly at Saks’ Gilt unit.
"[O]verall, I think that [Gilt's] performance for Off Price last year was disappointing, as the category improved, I think, we had execution and strategy misses and we have an opportunity to turn that around this year."
Executives expect ongoing strength in the luxury market to continue to boost Saks Fifth Avenue, as it already has, and to also accrue to Hudson’s Bay. But Foulkes suggested that there’s a lot of work to be done otherwise at home. "Performance at our other North American banners, Lord & Taylor and HBC Off Price have clearly not met expectations, and I’m diving deeper to better understand those businesses and the best course of action to improve performance," she said.