As parent company Hudson’s Bay Co. takes steps toward going private, Saks Fifth Avenue is logging yet another quarter of solid improvements.
The New York-based high-end retailer recorded a gain of 2.4% in same-store sales, delivering a two-year stacked comp of 8.4%, during the 13-week period ended May 4. It was the latest of several strong showings for HBC’s golden brand, which saw notable growth in men’s and women’s designer and ready-to-wear collections.
“Saks Fifth Avenue’s commitment to the luxury customer continues to payoff with widespread sales increases across key merchandise categories and locations, as well as among our top customers,” said HBC CEO Helena Foulkes. “Our New York City clients have embraced the flagship’s new main floor, which redefines the luxury shopping experience with a one-of-a-kind handbag assortment.” (The new main floor is the most recent development in the department store’s “Grand Renovation” project that commenced in 2015 with the opening of Manolo Blahnik’s boutique on the eighth-floor 10022-Shoe salon.)
Overall, however, HBC posted weak first-quarter sales amid chairman Richard Baker’s bid to take the firm private. Early this week, it was announced that the Canada-based business formed a special committee to review the proposal, with a cash value of 1.7 billion Canadian dollars. HBC also agreed to pull out of its European operations.
“We are seeing progress on a number of crucial fronts from our continued work to fix the fundamentals and reposition HBC for the future,” Foulkes said. “Strategically, we have simplified the organization and placed a greater emphasis on our North American retail operations. We are exercising financial discipline while making the necessary investments to capitalize on our greatest opportunities: Hudson’s Bay and Saks Fifth Avenue.”
HBC’s revenues for the period totaled 2.12 billion Canadian dollars, dropping 3.3% or 72 million Canadian dollars due to the company’s shrinking physical footprint and declining comps for Lord & Taylor. The company is considering a possible sale or merger for the storied department store, which shuttered its century-long home on Fifth Avenue in early January.
Nevertheless, the company reversed its year-ago losses of 398 million Canadian dollars to a post profits of 275 million Canadian dollars, including about 817 million Canadian dollars from the sale of the Lord & Taylor flagship.
Separately, comparable store sales for Saks Off 5th jumped 4.4% — returning to growth for the first time since the second quarter of 2017 as a result of the discount chain’s marketing efforts — while Hudson’s Bay dipped 4.3% during the period. Although its two-year stacked comp was down 1.1%, the figure was an improvement from the prior year.
“For Hudson’s Bay, we had some quick wins in service and marketing which led to sequential improvements in our comps during each month of the quarter,” Foulkes added. “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. While we have more work to do fixing the fundamentals and strengthening operations, we will continue to create experiences that customers love.”
Watch FN’s interview with designer Manolo Blahnik.
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