HBC, also known as Hudson's Bay Co., on Monday announced that Helena Foulkes has been appointed CEO, effective Feb. 19, according to a press release emailed to Retail Dive. She will also be appointed to HBC's board and Richard Baker, who has been interim CEO, will continue as governor and executive chairman.
Foulkes — who a few months ago landed at number 12 on Fortune magazine's annual Most Powerful Women in Business list — arrives from CVS Health, where she has served as EVP of CVS Health and president of CVS Pharmacy.
CEO Jerry Storch, who joined Hudson's Bay in 2015, stepped down unexpectedly in October and returned to helm his advisory firm, Storch Advisors, amid challenged sales and activist pressure at the department store.
Storch's departure last fall was widely seen as a defensive move after months-long agitation from Canadian activist investor Land & Buildings Investment Management, which had been pressing Hudson's Bay to sell off its best properties and deliver the proceeds to investors, perhaps through a go-private buyout. The hedge fund described it as a "consolidation of power" on the part of Hudson's Bay governor and executive chairman Richard Baker, an attempt by the board "to buy time and placate investors to address under performance and undervaluation."
Foulkes is highly respected as an executive, but she's not an obvious choice for a department store. She has an extensive background in retail and health care marketing and strategy, and has had the massive task of maintaining CVS's retail sales growth (minus tobacco sales) as it pivots to becoming an all-around health care company. The drugstore retailer (if you can even call it that anymore) solidified that position with its end-of-year acquisition of health insurer Aetna for $69 billion.
Perhaps it's no accident, then, that Foulkes landed at HBC, which in recent years has overtaken a stream of department stores in North America and abroad, a pattern that prompted many observers, at the time of the Storch departure, to question the company's retail focus. "This isn't a retail company — it's a real estate company," Mark Cohen, director of retail studies at Columbia University's Graduate School of Business, told Retail Dive at the time.
That's not clear yet, although, in her statement on Monday, Foulkes herself more than once alluded to HBC's proclivity to purchase — arguably a comfort zone for Baker, who hails from a real estate family.
"HBC has an amazing portfolio of retail banners, valuable real estate and an innovative approach to M&A that give it the ability to win," Foulkes said. "The future of retail will be defined by companies that think creatively about where the consumer and the world are headed. I look forward to working with this great team and listening deeply to them and to our partners to build upon strategies that capitalize on HBC's physical and digital assets and deepen our core operating effectiveness."
But Foulkes may be walking through a revolving door, a mainstay of department store buildings but not exactly ideal for business leadership, Cohen warned on Monday. "Richard Baker's CEOs only appear to have 2-3 year shelf lives," Cohen told Retail Dive in an email. "None of them — Jeff Sherman, Jerry Storch or now this new appointment — have been merchants. Ms. Foulkes may very well have been an accomplished CVS executive but she has no particularly relevant experience to bring to HBC. Though the company needs operational leadership, its more critical need is merchandising acumen."
The tug of war between retail and real estate that several analysts saw as underpinning Storch's departure (and won by Baker) may have kept talented merchants out of the running, he also said. "HBC is another retail house of cards — a collection of retail enterprises more tacked together with debt than strategy."