TORONTO — Hudson’s Bay Co. lost $243 million in its latest quarter as overall revenue and comparable-store sales fell compared with a year ago.
The retailer (TSX:HBC) said Wednesday the loss amounted to $1.33 per diluted share for the 13 weeks ended Oct. 28 compared with a loss of $125 million or 69 cents per diluted share a year ago.
Retail sales totalled $3.16 billion, down four per cent from $3.30 billion in the same quarter last year.
Consolidated comparable sales fell 3.2 per cent on a constant currency basis and 5.1 per cent as reported.
Ed Record, HBC’s chief financial officer, its Saks Fifth Avenue and Hudson’s Bay businesses performed well but overall third-quarter results did not meet expectations.
HBC’s other banners include Lord and Taylor, Gilt, Saks Off 5th, German department store group Galeria Kaufhof and Galeria Inno, a department store chain in Belgium.
Record said job cuts — made as part of HBC’s transformation plan — caused some operational challenges, particularly in its digital business.
“We know we can do better, and our highest priorities include increasing comparable sales, improving margins, and prioritizing our capital investments as we focus on further developing our digital business,” Record said in a statement.
“Our emphasis on digital continues to grow, and we are re-allocating resources to improve HBC’s digital platforms and online capabilities. We also plan on reducing total inventory as part of an effort to moderate promotional activity and increase full price selling.”
Last week, an activist investor agreed to drop its opposition to an investment in HBC by private equity firm Rhone Capital, which has agreed to invest roughly $632-million in HBC (TSX:HBC) in the form of mandatory convertible preferred shares.
Land & Buildings Investment Management LLC had criticized the Rhone deal and applied last month for Ontario Securities Commission to review a Toronto Stock Exchange conditional approval of the investment.
Land & Buildings agreed last week it was “pleased and encouraged” that HBC’s management and board indicated they would continue to take steps to monetize the company’s real estate assets.
The Rhone investment was announced as part of a deal that will see HBC to sell its Lord & Taylor Fifth Avenue building to WeWork Property Advisors, a joint venture between WeWork and Rhone, for nearly $1.1 billion, and pursue a strategic alliance with WeWork regarding future real estate transactions.
The Canadian Press