Hudson’s Bay Company, Canadian owner of U.S. department stores Saks Fifth Avenue and Lord & Taylor, on Monday announced third quarter revenues rose 28.6% to $2.5 billion. Normalized net loss was $364 million, compared to net earnings of $17 million in the prior year, which the company attributed in part to higher rents and the creation of Joint Ventures.
Q3 e-commerce sales rose 73% from the same period last year, and e-commerce same-store sales rose 5.4% on a constant currency basis. Q3 same-store sales fell 3.6%, with same-store sales in the quarter at Saks falling 4.6% and 2.4% in the department store category overall. Q3 same-store sales at HBC Off Price fell 8.4%.
Inventory levels on a comparable basis fell approximately 2% from a year ago, thanks to the company’s “disciplined focus on this area,” according to a press release.
Like many department store companies, Hudson’s Bay continues to face challenges in the women’s apparel, department store and luxury segments, the company’s governor and executive chairman, Richard Baker, said in a statement. “To address this we are continuing to move aggressively, making specific improvements both in our digital and brick and mortar operations that will allow us to better serve our customers,” he said.
That includes completing the installment of its robotic fulfillment system in Canada, which is already in place to some extent for holiday orders, he said. He also said the company’s real estate strategy paid off in the quarter, and the company was able to favorably refinance some debt.
Going forward, the retail company is focusing on well performing segments like dresses and active wear, and adding new categories, like toys, to its home goods assortment (something Macy’s is also doing in its holiday Backstage pop-ups in full-line stores) and offering exclusive items.
To help Saks Fifth Avenue maintain higher prices and margins, the company is also offering exclusive and differentiated merchandise and has added a concierge service. The company is also doubling down on its off-price category, with a wider variety of price points for its Saks Off Fifth stores. This revised pricing strategy, introduced at the end of the third quarter, “substantially reduced promotional activity and focused on offering great value on an everyday basis,” the company said.