HBC cutting 265 jobs as it realigns business, IT
Hudson's Bay Company (HBC) is launching a wide-ranging cost-cutting initiative and corporate realignment strategy, with omnichannel technology at the center.
The realignment will include a reduction of about 265 corporate employees, expected to result in an annual savings of $75-million a year. The cuts are mostly in the company’s U.S. corporate offices in New York.
As part of the initiative, HBC will enhance existing technology, while also accelerating the consolidation of all corporate IT to one common platform across all banners. Newly hired CIO Janet Schalk, formerly CIO of Kohl’s, and Dion Rooney, executive VP of HBC digital, will oversee this effort.
In addition, HBC, which also owns the Lord & Taylor and Saks Fifth Avenue banners, bought the Saks said it will establish new “centers of excellence” for the CRM, creative, and HR functions, complementing existing centers of excellence like digital and IT.
HBC also plans to realign resources in business functions to match current and future business strategy while investing in areas that will drive growth.
“Through organic growth and acquisitions, HBC has established itself as one of the fastest-growing department store retailers in North America and a truly unique global company,” said Richard Baker, governor and executive chairman of HBC. “This significant growth has created meaningful opportunities for us to further build our business while operating even more effectively.”
These actions are expected to result an annualized cost savings and synergies during fiscal year 2016 totaling $75 million, in addition to the previously announced synergies connected to the integration of Saks HBC anticipates taking a charge of approximately $20 million in the third quarter of fiscal year 2015 in connection with the realignment.
“By enabling our teams to work smarter, faster and more effectively, we expect to achieve substantial cost savings and continue to invest in our core strategies to build our business, drive further improved financial performance and support the long-term vision of HBC,” said Jerry Storch, CEO of HBC. “We have an enormously talented team in place, and will continue to build our world-class capabilities.”
HBC anticipates benefits from the realignment including strengthened digital capabilities and omnichannel offering, along with store renovations and strategic merchandising initiatives at all HBC banners.
As previously announced, HBC will be investing in store growth in 2016, including the opening of seven Saks Fifth Avenue locations and 25 Off 5th outlet locations, in part through the expansion of both banners into Canada.