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Hudson's Bay Sales Slide Amid Efforts to Take Company Private

Published 06/13/2019, 07:37 AM
Updated 06/13/2019, 09:00 AM
© Reuters.  Hudson's Bay Sales Slide Amid Efforts to Take Company Private

© Reuters. Hudson's Bay Sales Slide Amid Efforts to Take Company Private

(Bloomberg) -- Hudson’s Bay reported a weak sales quarter, reinforcing a bid by its chairman to take the retailer private. Lord & Taylor, a chain the company is prepared to sell or merge, was among the under-performers.

  • Comparable sales, a closely watched metric for the industry, fell 2.1%, the biggest drop in at least eight quarters. They grew 2.4% at Saks Fifth Avenue, which has been the Toronto-based company’s bright spot for several quarters.

Key Takeaways

  • A look at Hudson’s Bay, the eponymous chain in Canada that’s the oldest company in North America, helps explain why Chairman Richard Baker says improving performance will take time. Comparable sales, an indicator closely watched by investors, decreased 4.3%.
  • “We are incrementally more confident that our post-holiday diagnosis was correct and our fall assortment will better match our customers’ expectations of Hudson’s Bay,” Chief Executive Officer Helena Foulkes says of the Canadian chain.
  • A glimmer of hope came from discount chain Saks OFF 5th, which HBC has tried to turn into a stronger competitor to the likes of Nordstrom's Rack (NYSE:JWN). Comparable sales returned to growth for the first time since the second quarter of fiscal year 2017.

Market Reaction:

  • The stock has fallen about 20% over the past year through Wednesday’s close. That includes a 46 percent surge since Friday, the last trading day before Baker and a group of investors with 57% of outstanding common shares made an offer for the remaining stock. Baker argues that a turnaround needs patient long-term capital.
  • For more details on the results, click here.

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