Same-store, e-commerce sales help HBC swing to profit

Toronto – Hudson’s Bay Company (HBC) reported net earnings of $3.9 million in the second quarter of fiscal 2013, compared to a net loss of $2 million in the second quarter of the previous fiscal year.



In addition, HBC reported consolidated sales of $947.7 million, up 3.9% from $911.9 million. The retailer credited consolidated same-store sales growth of 3.5% and e-commerce sales growth of 56.1% to $37.3 million as helping to drive its healthy overall performance.



HBC also cited strong performance of ladies' and men's apparel, ladies' shoes, handbags and accessories. Same-store sales at HBC’s Lord & Taylor brand dropped 1.2%, but 6.2% same-store sales growth at the Hudson’s Bay brand helped offset this result. Sales growth was particularly strong at recently renovated locations, including the company's Vancouver flagship store.



“Hudson’s Bay continues to demonstrate industry-leading sales growth,” stated Richard Baker, HBC’s CEO. “This performance has been driven by a continued focus on our stated strategic initiatives. We are seeing strong performance from stores and departments that have recently received capital investments. We are also pleased by the continued growth of our e-commerce sales, which accelerated in the second quarter and are up approximately 45% year-to-date following our re-launch of both banner websites. Our online business was a key factor in our results, and reflects our increased investment in this component of our business.”



On July 29, 2013, HBC and Saks announced that they had entered into a merger agreement whereby HBC will acquire Saks in an all-cash transaction valued at approximately $2.9 billion, including debt. The combined company will operate 321 stores, including 179 full-line department stores, 73 outlet stores and 69 home stores throughout the U.S. and Canada, along with three e-commerce sites. HBC expects to achieve $100 million of annual synergies within three years.



The transaction has been approved by each company's board of directors and is expected to close before the end of the calendar year, subject to approval by Saks shareholders and other customary closing conditions.