Hudson Bay Co.’s dedication to expanding its women’s footwear offering in 2013 led to a 25 percent rise in women’s shoe sales in the third quarter year-on-year, with sales at its Queen Street flagship in Canada up more than 50 percent.
“Ladies shoes is a department that we have been particularly focused on growing this year by expanding our offering, by investing in the service model and by investing in the square footage that we allocate to shoes in our stores,” HBC CEO Richard Baker said on an investor call with analysts.
The company renovated its Toronto-based flagship in the spring to create the country’s largest shoe floor. It devoted 50,000 square feet of ground-floor retail space to women’s footwear.
“Ahead of the holiday rush, all of our renovation work for 2013 is complete, including significant renovations at six of our locations,” Baker said in the call.
HBC, impacted by its $2.9 billion purchase of Saks Fifth Avenue and the promotional environment affecting margins, said its net loss grew to 124.2 million Canadian dollars in the third quarter ended Nov. 2, compared with a loss of C$14.4 million in the year-ago period.
However, the company’s operations improved, with normalized net earnings rising to C$8.9 million, against the year-ago loss of C$300,000. Normalized earnings before interest, taxes, depreciation and amortization [EBITDA] were C$64.3 million, an increase of C$16.4 million from the third quarter of 2012.
Baker cited heavy discounting among rivals in the critical pre-holiday season as a key driver behind the company lowering its full-year guidance. “While we would prefer our year-to-date performance to have been stronger, our investments in both store productivity and our omnichannel platform have produced clear and promising results,” he said in the call.
Overall retail sales rose 5.8 percent year-on-year to C$984.1 million.
Baker noted that the integration of Saks is expected to deliver $100 million worth of synergies over the next three years.