Hudson’s Bay Co. is reconfiguring its North American operations to cut costs ahead of more spending on technology and stores. The department store chain said this week it plans to unite its e-commerce—what it calls digital—channel with stores on one technology platform. The company did not disclose if the common platform would be developed in-house or purchased from a commercial supplier.
Realignment is expected to save Hudson’s Bay $75 million in 2016 in cost-saving measures, which include layoffs at headquarters and in corporate functions across Hudson’s Bay stores affecting approximately 265 employees in North America. The company says it expects to take a charge of about $20 million in the third quarter of fiscal 2015 in connection with restructuring.
The company says benefits from the realignment will support Hudson’s Bay’s “overarching growth strategies, including continuing to strengthen its digital capabilities and all-channel offering, while enhancing store environments across the company’s banners through renovations and strategic merchandising initiatives.”
In addition, Hudson’s Bay plans to invest in store growth in 2016, including opening seven Saks Fifth Avenue locations and 25 Off 5th locations, in part through the expansion of both into Canada. Off 5th carries discounted fashion apparel and accessories in stores and online.
Hudson’s Bay, No. 97 in the Internet Retailer 2015 Top 500 Guide, did an Internet Retailer-estimated $400.2 million in 2014 e-commerce sales. The company acquired Saks Inc. in 2013 in an all-cash transaction worth $2.9 billion. The company said at the time it expected to realize about $97 million in annual savings within three years through operating efficiencies between Hudson’s Bay and Saks.
Hudson’s Bay also owns and operates Lord & Taylor and Home Outfitters (housewares and home furnishings) stores and e-commerce sites TheBay.com, SaksFifthAvenue.com, SaksOff5th.com, LordandTaylor.com and HomeOutfitters.com.
The company added to its technology talent pool earlier this month when it hired retail veteran Dion Rooney as executive vice president of HBC Digital. Rooney joins Hudson’s Bay after more than three decades at Toys ‘R’ Us Inc. (No. 40). He spent the past nine-plus years as the toy retail chain’s chief information officer.
Hudson’s Bay also announced the closing of its acquisition of Galeria Kaufhof Group, an online and department store merchant operating in Germany and Belgium. Galeria Kaufhof Group operates 102 Galeria Kaufhof department stores, 60 Dinea restaurants and 16 Sportarena (soccer apparel and accessories) stores in Germany, as well as e-commerce sites for each of those businesses. It also operates an e-commerce site and 16 Galeria Inno department stores in Belgium.
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