(Adds background on HBC, retail sector, details on operation
TORONTO, April 4 Canadian department store
retailer Hudson's Bay Co reported a quarterly loss on
Tuesday, due in part to an impairment charge related to weak
sales at Saks OFF 5TH and Gilt.
The 347-year-old company, which also operates Lord & Taylor
in the United States and GALERIA Kaufhof in Europe, reported a
non-cash goodwill impairment charge of C$116 million, saying it
was a necessary step due to recent sales weakness at its Saks
outlet chain, OFF 5TH, and Gilt, an online shopping and
HBC, which said the two operations have the potential for
long term profitable growth, was working to combine inventory at
both by the end of the year, refocus on higher-end products, and
improve website capabilities.
Changing consumer trends and online competition such as
Amazon, have hurt retailers, especially department
stores, with Macy's Inc and debt-laden Neiman Marcus Group
among those struggling to turnaround the business.
"The past year was a disruptive one for the retail
industry," said chief executive Jerry Storch in a statement.
"We are taking decisive action and making the tough
decisions to ensure continued performance should the current
Last month, Reuters reported that Hudson's Bay was in
exploratory talks to acquire debt-laden luxury retailer, Neiman
Marcus Group. This followed a failed effort earlier in the year
to bid for Macy's
The Lord & Taylor operator posted a net loss of C$152
million, or 83 Canadian cents per share, in the fourth quarter
ended Jan. 28. That compared with a net income of C$370 million,
or C$1.88 per diluted share, a year earlier that also included a
C$333 million net tax gain related to the sale of investments in
Quarterly sales rose 2.5 percent to C$4.6 billion, higher
than the 4.48 billion analysts had projected according to
Thomson Reuters I/B/E/S.
Adjusted EBITDA, a key earnings measure, was C$404 million,
above the C$385 million consensus, according to Canaccord
Genuity analyst Derek Dley.
HBC said an ongoing operational review included improving
its operating model and optimizing in-store operations, adding
it would provide further details on initiatives "in due course."
Hudson's Bay plans to spend between C$450 million and C$550
million in net capital investments in fiscal 2017, with priority
on projects including growth in Europe and ongoing international
renovations. Net capital spending is expected to total about
C$150 million less than the prior year.
Shares fell 10.3 percent to C$9.70 this week, ahead of
(Reporting by Solarina Ho; Editing by Sandra Maler and Tom