Hudson’s Bay Co. (HBC) said Tuesday it will close up to 10 of its Lord & Taylor stores through next year, as the company reported higher sales with a wider loss in its fiscal first quarter.
The announcement comes a day after HBC revealed it was selling its online banner Gilt Groupe to Rue La La.
The retailer said its quarterly revenue improved to $3.09 billion from $3.06 billion in the same quarter of last year.
However, the company’s same-store sales, a key performance measure that tracks sales at outlets open at least a year, declined 0.7 per cent. HBC said its comparable digital sales increased by 7.7 per cent.
The company said its overall loss for the quarter came in at $400 million, compared to a loss of $221 million a year ago. HBC’s loss from its continuing operations came in at $314 million, up from $214 million in the same period last year.
On a normalized basis, HBC says its loss per share for the quarter amounted to $1.22 compared with a normalized loss of $1.15 per share a year ago. Analysts on average had expected a loss of 87 cents per share, according to a Thomson Reuters poll.
Investors sent the company’s stock down 1.5 per cent to $10.46 on the Toronto Stock Exchange on Tuesday.
As part of a turnaround plan, HBC said it will close up to 10 of the 51 Lord & Taylor stores it had at the end of its first quarter.
“We are also taking action to reposition Lord & Taylor for improved results and increased profitability,” HBC CEO Helena Foulkes said in a release.
“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,” she said.
The company also said it will close the Lord & Taylor store in its former flagship New York City Fifth Avenue location, which the company said back in October 2017 it was selling to office-sharing company WeWork. HBC had originally planned to maintain a smaller Lord & Taylor outlet in the building.
Retail analyst Jim Danahy of CustomerLAB said the move to close the Lord & Taylor stores reflects the “new normal” in a U.S. market that has more stores than customer business to support them.
“Everybody’s got to rightsize,” he said, adding that the U.S. is at least 50 per cent “over-stored.”
Danahy said that means some stores will shut, while others will change in size to not only support traditional shopping, but also become distribution and return centres for online shopping.