Hudson’s Bay Co. — owner of Lord & Taylor, Saks Fifth Avenue and other department stores — today announced a series of aggressive initiatives aimed at combating turbulent retail times.
The company said it plans to eliminate about 2,000 jobs in North America to “create a flatter, more nimble organization.”
The decision, the firm said, is the result of a six-month operational review focused on “identifying efficiencies, streamlining processes and improving back-of-store productivity in North America.”
The organizational overhaul, HBC said, should result in an annual savings of $350 million CAD — including the anticipated $75 million the company announced in February — when the plan is fully implemented by the end of fiscal 2018. About $170 million in savings is expected to be realized during fiscal 2017.
“We are reallocating resources to accelerate the opportunity we see online as we run our brick-and-mortar operations more efficiently,” Richard Baker, HBC’s governor and executive chairman, said in a statement. “Our team is taking the right steps to optimize our North American business and create efficiencies by leveraging the scale of our company. At this critical moment of change in the retail industry, I believe in the future of our all-channel model, and we are adapting to meet the evolving needs of our customers.”
Among key organizational changes, the company said it would create two distinct leadership teams, one focused on Hudson’s Bay and one dedicated to Lord & Taylor, in order to “drive market-specific strategies.”
To that end, former Lord & Taylor and Hudson’s Bay president Liz Rodbell will drop one of her roles. Alison Coville, most recently SVP and GMM of HBC’s department store group, will become president of Hudson’s Bay. Rodbell will continue in her role as president of Lord & Taylor and will now be fully focused on leading that U.S. banner.
HBC said it is overhauling its operations to integrate more digital functions throughout the organization. And its digital technology department will join the company’s broader IT organization to form the HBC Technology group “to align store technology with online platforms into one.”
HBC’s buying and planning teams have also been restructured to reduce layers. Meanwhile, marketing support functions at the company, including digital marketing, will now be centralized.
These actions will result in several executive changes at the company. Janet Schalk, chief technology officer, will lead the newly created HBC Technology group.
Ian Putnam, chief corporate development officer, has taken on the added responsibility of COO for HBC’s joint ventures. Kerry Mader, EVP of store planning and operations, has taken on additional responsibility for store operations across North America and for visual merchandising. Andrew Blecher has been named chief communications officer and assumes additional responsibility for the HBC Foundations in the U.S. & Canada. Erik Caldwell assumes additional responsibility for digital operations and procurement, and has been named SVP, supply chain and digital operations.
“Through bold, decisive actions we are creating a more agile organization that will align our cost base with the all-channel environment that we are operating in,” said Jerry Storch, HBC’s CEO. “Our transformation plan … is designed to realign the company and position HBC as the retailer of the future. We are equipping our North American banners to make the right all-channel decisions, with the support of world-class centers of excellence. These changes will enable us to react faster to the ever-changing environment and evolving customer preferences to get ahead of industry developments.”
The company also today announced another round of disappointing earnings for the first quarter, ended April 29. Overall, retail sales decreased 3 percent to $3.2 billion CAD, or $2.4 billion. During that period, the company’s net loss widened to $221 million CAD, or $163.7 million.