Hudson’s Bay Co. is downsizing its retail operations, with plans to close up to 20 Saks Off 5th stores across the country.
The discount offshoot of luxury department store chain Saks Fifth Avenue has been struggling in the past seasons to draw in customers, competing against fellow off-price chains Nordstrom Rack and Macy’s Backstage.
It has 133 stores in total, which parent company HBC said are under “fleet review.” (No timeline was given on the closings.)
“Further streamlining our retail portfolio enables even greater focus on our businesses with the strongest growth opportunities,” said CEO Helena Foulkes. “The divestiture of Gilt, rightsizing of Lord & Taylor, the recent merger of our European retail operations in Germany and today’s announcement exemplify the bold strategic actions we are taking to set HBC up for long-term success.”
The announcement also included the shuttering of HBC’s Home Outfitters chain in Canada this year in an effort to reduce costs and improve overall profitability. Once completed, the closures are expected to be slightly favorable to adjusted earnings before interest, taxes, depreciation and amortization, the company said.
Last year had been a whirlwind one for HBC, with historic department store Lord & Taylor saying goodbye to its storied Fifth Avenue location. The Canada-based company also sold its off-price luxury goods e-tailer Gilt to flash-sale site Rue La La and offloaded half its stake in its European retail operations.
And early last month, Saks Fifth Avenue shuttered the doors to its women’s store in New York City’s Brookfield Place. The news came shortly after HBC’s third-quarter earnings report, which recorded a 7.3 percent rise in comparable sales at Saks that put the department store’s rebound well above competitors Neiman Marcus and Nordstrom.
“The business’s ongoing strategy to elevate the brand through enhancement of its fashion offering, increased customer engagement and efforts to bring together the online and offline shopping experience continues to drive traction within the luxury segment,” Foulkes said at the time.
Saks Fifth Avenue to Close Its Brookfield Place Location in NYC
Saks’ Sales Rebound Continues, but Now Its Off-Price Business Is Struggling