Canada-based Hudson’s Bay Co. announced today a series of changes to its North American business strategy, including a plan to cut 265 positions at headquarters and in corporate offices across store banners.
Since the company’s 2013 acquisition of Saks Inc., HBC has hired more than 2,000 associates “in connection with new store growth and the expansion of digital offering across its store banners,” the company said in a release.
But now that the organization is “positioned to run more efficiently,” HBC said it could pare a number of roles, which would effect about 265 associates across store banners in North America.
HBC added that it still plans to open seven Saks Fifth Avenue locations and 25 Off Fifth locations in 2016 as part of its expansion of both banners into Canada.
Among the other major goals of its North American realignment, HBC said it is establishing new “centers of excellence” focused on customer-relationship management, creative and human resources functions; consolidating key business functions; and implementing technology enhancements under newly hired CIO Janet Schalk and EVP of HBC Digital Dion Rooney.
“Through organic growth and acquisitions, HBC has established itself as one of the fastest-growing department-store retailers in North America and a unique global company,” said Richard Baker, HBC’s governor and executive chairman, in a release. “This significant growth has created meaningful opportunities for us to further build our business while operating even more effectively. To that end, we are focused on taking the appropriate next steps to position HBC to deliver continued industry-leading performance and long-term growth, while best delivering for our customers in a constantly evolving industry environment.”
The realignment, particularly the job cutbacks, are forecasted to result in about $75 million in annual cost savings and “synergies,” the company said.
“By enabling our teams to work smarter, faster and more effectively, we expect to achieve substantial cost savings and continue to invest in our core strategies to build our business, drive further improved financial performance and support the long-term vision of HBC,” CEO Jerry Storch said in a statement. “We have an enormously talented team in place and will continue to build our world-class capabilities.”
The company anticipates a charge of approximately $20 million in the third quarter in connection with the restructuring.
In its most recent quarter, Q2, HBC’s net earnings totaled $67 million (CAD), or $53 million, compared with a net loss of $36 million (CAD) in the prior year’s same period. Revenues increased 15 percent year-over-year, to $2 billion (CAD), or $1.6 billion, compared with net sales of $1.8 billion (CAD).