Saks boosts HBC Q2 performance; eight stores planned

Toronto – So far, the November 2013 purchase of Saks Fifth Avenue by Hudson’s Bay Company (HBC) is paying dividends. HBC reported strong results during the second quarter of fiscal 2014, including a shrinking of its net loss from $81 million in the second quarter of the prior fiscal year to $36 million.



Primarily due to the addition of Saks revenue, total sales climbed 87% to $1.77 billion from $948 million. Consolidated same-store sales grew 1.9%. Digital sales were $162 million, including $116 million from Saks.



During the third quarter of fiscal 2014, HBC expects to open a Lord & Taylor store in Albany, New York, Off 5th stores in Eagan, Minnesota, Costa Mesa, California, and Columbus, Ohio, and a Hudson's Bay Outlet in Mirabel, Quebec.



HBC also recently announced the planned opening of a Saks Fifth Avenue store in the fall of 2016 at Brickell City Centre in downtown Miami. Previously, the company has announced plans for Saks Fifth Avenue stores in San Juan, Puerto Rico in the spring of 2015 and in Honolulu, Hawaii in the spring of 2016.



During the second quarter, HBC began the integration of the Home Outfitters business with the Home business of the Hudson’s Bay banner. HBC is currently in the process of assessing its Home Outfitters locations and previously announced the closing of locations in Mississauga, Ontario, and Abbotsford, British Columbia, in December 2014 and January 2015, respectively. Beginning in the third quarter of fiscal 2014, Home Outfitters will be included in HBC’s department store segment results.



For fiscal 2014, Saks reaffirmed guidance of sales of $7.8 billion to $8.1 billion. This implies low-to-mid single-digit same-store sales growth calculated on a local currency basis, driven in part by strong digital sales growth.



"HBC's quarter was characterized by strong performance from the higher end of our businesses, demonstrating the sustained strength of affluent consumers, and softer performance from our more moderate businesses,” said Richard Baker, CEO of HBC. “Off 5th, buoyed by its new digital business, experienced outsized same store sales growth for the quarter. We continued to invest in HBC Digital, where we witnessed tremendous sales growth.”