- Hudson's Bay Co. is trying to revive — or possibly sell — it's upscale Lord & Taylor department store chain, according to a Reuters report that cited unnamed sources. A Hudson's Bay spokesperson told Retail Dive the company does not comment on "rumor or speculation."
- The Canadian retailer is working with investment bank PJ Solomon and consulting firm AlixPartners to cut costs and improve the business, according to Reuters, which also noted that "Hudson’s Bay is also open to divesting Lord & Taylor, but considers this outcome unlikely given the scarcity of potential buyers that would pay top dollar for it amid the retail sector’s malaise."
- Hudson's Bay CEO Helena Foulkes said in a March conference call that Lord & Taylor, as well as its off-price unit, "have clearly not met expectations, and I'm diving deeper to better understand those businesses and the best course of action to improve performance," according to a Seeking Alpha transcript of the call. In response to an analyst's question, she also said the company is "looking at every part of the business to improve performance and everything is on the table," and she added that she intended to "[come] back to you with a more clear plan."
With 50 stores, Lord & Taylor represents a little more than 10% of Hudson's Bay footprint, according to the company's most recent financial disclosures. America's oldest luxury department store, Reuters described the Lord & Taylor banner as the one-time "cornerstone of [Hudson Bay's] retail empire."
But the brand has been underperforming of late. Weak traffic at Lord & Taylor brought Hudson Bay's comparable sales into the negative in the fourth quarter, even as Saks Fifth Avenue's comparable sales were positive at 2.1% and have been positive for four out of the past five quarters, the company said in March.
As the banner looks for traction online — where Amazon is becoming ever more of a threat in the fashion market — it has partnered with Walmart to sell on the mass retailer's website. The move drew mixed reactions from onlookers, with some experts noting it could give Lord & Taylor digital scale while others called it "madness," as it could dilute the luxury player's brand.
In the brick-and-mortar world, Lord & Taylor plays in a luxury space where brands have ever more options to reach customers, and one also filled with relatively strong competitors. Nordstrom, especially, is seen by many as a department store standout.
After considering major acquisitions last year, including Macy's and Neiman Marcus, Hudson's Bay appears to have turned inward to revive its existing businesses. Under pressure from activists, it's also selling off assets to bring in fresh cash. That includes the real estate under the Lord & Taylor flagship in New York City, which the company sold to coworking startup WeWork last year. The company has also shuffled its executive ranks, with Foulkes coming aboard in February after former CEO Jerry Storch stepped down abruptly last fall, among other changes.