'Downright ugly': HBC comparable sales fall in Q1
Hudson’s Bay Co. (HBC.TO) reported a weak sales quarter, reinforcing a bid by its chairman to take the retailer private. Lord & Taylor, a chain the company is prepared to sell or merge, was among the under-performers.
Comparable sales, a closely watched metric for the industry, fell 2.1%, the biggest drop in at least eight quarters. They grew 2.4 per cent at Saks Fifth Avenue, which has been the Toronto-based company’s bright spot for several quarters.
A look at Hudson’s Bay, the eponymous chain in Canada that’s the oldest company in North America, helps explain why Chairman Richard Baker says improving performance will take time.
Comparable sales, an indicator closely watched by investors, decreased 4.3 per cent.
“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,” Chief Executive Officer
Helena Foulkes says of the Canadian chain.
A glimmer of hope came from discount chain Saks OFF 5th, which HBC has tried to turn into a stronger competitor to the likes of Nordstrom Inc.’s Rack. Comparable sales returned to growth for the first time since the second quarter of fiscal year 2017.
The stock has fallen about 20 per cent over the past year through Wednesday’s close. That includes a 46 per cent surge since Friday, the last trading day before Baker and a group of investors with 57 per cent of outstanding common shares made an offer for the remaining stock. Baker argues that a turnaround needs patient long-term capital.