LORD & TAYLOR TO CLOSE 10 STORES INCLUDING ITS ICONIC FIFTH AVENUE FLAGSHIP
Global retailer Hudson’s Bay Company (HBC) has taken several big steps in right-sizing its business this week, namely selling its Gilt brand to its off-price competitor Rue La La, and now, today, announcing that it will close 10 Lord & Taylor stores through 2019 including its Fifth Avenue flagship store in New York City.
“After evaluating best use scenarios for its New York City Fifth Avenue location, the company has decided not to maintain a presence at this location following turnover of the building to WeWork,” the company said in a press release. “Exiting this iconic space reflects Lord & Taylor’s increasing focus on its digital opportunity and HBC’s commitment to improving profitability.”
“We are also taking action to reposition Lord & Taylor for improved results and increased profitability,” said Helena Foulkes, HBC’s chief executive officer. “With a new leader dedicated to evolving our experience and merchandise assortment to best meet customer expectations and shopping preferences, we will take advantage of having a smaller footprint to rethink the model and focus on our digital opportunities. The Lord & Taylor flagship on Walmart.com, which launched last week, is a great example of this and represents how we are thinking about the entire business.”
This news comes as the company reported revenues of $3,088 million, a one percent increase of $30 million from last year, in the first quarter of 2018. Overall comparable sales declined, however, by 0.7 percent, with total comparable digital sales increasing 7.7 percent. By brand, Saks Fith Avenue comparable sales increased by 6 percent; DSG (Hudson’s Bay, Lord & Taylor and Home Outfitters) comparable sales decrease of 0.6 percent; Saks Off 5th comparable sales decrease of 3.5 percent; and HBC Europe (Galeria Kaufhof and Galeria INNO) comparable sales decrease of 6.6 percent.
“Results in North America were encouraging, highlighted by better performance across the group and comparable sales growth of 6 percent at Saks,” said Richard Baker, HBC’s governor and executive chairman. “We have significant opportunity to build on this trend and are taking action to strengthen the foundation of the company and position HBC for profitable growth. Our decision to divest Gilt will allow us to focus our time and resources on the businesses with the greatest potential to drive operating performance, and I am confident that the retail operations are moving in the right direction under Helena’s leadership. In addition to making the right strategic decisions to improve our business, we will continue to explore all opportunities to leverage the strength of our real estate portfolio to create value for our shareholders.”
Foulkes added, “Over the last month, we have worked rapidly to put in place a leadership team focused on driving business results, streamlining our processes and fostering a culture of accountability. We need to improve across all areas of the business, and this begins with rededicating ourselves to putting the customer first in everything we do. This customer-focused mindset will dictate how we think about key functions of the business, and I see opportunity to dramatically improve our marketing and digital operations while also refining company wide processes that impact our end to end customer experience. In Europe, we have de-layered management, allowing me to be closer to that business as we take actions that are expected to stabilize the topline and improve our cost structure in this important market. Accountability begins with our leadership team, and I am confident that we now have the right people in place across HBC to drive actions that will result in profitable growth.”
