363
Fashion Jobs
UNDER ARMOUR
Associate, HR Administration
Permanent · SEOUL
ARKET
Visual Merchandising Manager
Permanent · BUSAN
PUIG
Marketing Manager
Permanent · SEOUL
JAEGER
[Jaeger Lecoultre] Marketing & Communication Director
Permanent · SEOUL
ESTÉE LAUDER COMPANIES
Corporate Account Executive For Travel Retail Korea, Estee Lauder Companies
Permanent ·
ESTÉE LAUDER - BRAND
Assistant Education Manager, Estee Lauder
Permanent · SEOUL
L'OREAL GROUP
[l'Oreal Korea] Luxe Div. - Lancome E-Commerce Specialist
Permanent · SEOUL
COS
Instore Visual Merchandiser Manager_seoul/Gyeonggi
Permanent · SEOUL METROPOLITAN AREA
AESOP
Shinsegae Gwangju - Retail Consultant
Permanent · GWANGJU
COACH
Manager, Ecommerce
Permanent · SEOUL
ADIDAS
Manager, Business Planning & Analysis, Wholesales
Permanent · SEOUL
HENKEL
Adhesive Key Account Manager For Sports And Fashion Market
Permanent · BUSAN
HENKEL
Consumer Brands General Manager Assistant
Permanent ·
HYPEBEAST
Brand Partnership Manager
Permanent · SEOUL
ADIDAS
Manager, Retail Marketing - Originals, Brand Adidas
Permanent · SEOUL
ADIDAS
Manager, bu - Football Apparel, Brand Adidas
Permanent · SEOUL
SWAROVSKI
District Manager (Travel Retail)
Permanent · SEOUL
SHISEIDO
E-Key Account Manager, Cosmetics&Fragrance (Korean Only)
Permanent · SEOUL
ADIDAS
sr. Manager, Process Excellence & Analytics, Scm
Permanent · SEOUL
ADIDAS
Director, Performance Management/s&op
Permanent · SEOUL
LEVI'S
DTC Assistant Marketing Manager
Permanent ·
AMORE PACIFIC
[경력] '24년 Amorepacific_기술기획 직무 채용
Permanent ·
By
Reuters API
Published
May 9, 2018
Reading time
4 minutes
Download
Download the article
Print
Text size

Hudson's Bay seeks to revive Lord & Taylor's fortunes

By
Reuters API
Published
May 9, 2018

Hudson's Bay Co is working with investment bankers and consultants to identify deals and new measures to turn around its Lord & Taylor department store chain, once the cornerstone of its retail empire, people familiar with the matter said.


Reuters

The move shows how the chain's fortunes have diverged from Hudson's Bay's luxury Saks Fifth Avenue banner, which has managed to better weather the rise of online shopping sites including Amazon.com Inc and the resulting decline of brick-and-mortar stores. It comes as the company decided to sell its eponymous Hudson's Bay department store in downtown Vancouver, Reuters reported exclusively on Monday.

The Canadian retailer has been working with investment bank PJ Solomon Co for advice on potential deals regarding its department store portfolio, and is also working with consulting firm AlixPartners LLP on cutting costs and reforming its business, the sources said.

Much of their focus has been on Lord & Taylor, which accounts for about one tenth of Hudson's Bay's stores, the sources added.

Hudson's Bay is also open to divesting Lord & Taylor, but considers this outcome unlikely given the scarcity of potential buyers that would pay top dollar for it amid the retail sector's malaise, according to the sources, who asked not to be identified discussing confidential deliberations. AlixPartners and PJ Solomon declined to comment.

"Lord & Taylor is a storied brand and we will continue to evolve it for the future," a Hudson's Bay spokeswoman said in an emailed statement, declining to comment on moves the company was considering with investment bankers and consultants.

"As we shared on our last earnings call, recent performance at Lord & Taylor has not met expectations. However, we see a lot of opportunity to grow the business."

Hudson's Bay Executive Chairman Richard Baker has publicly expressed disappointment with the chain's performance. His investment firm NRDC Equity Partners acquired Lord & Taylor for $1.2 billion (889 million pounds) in 2006, when department stores were still thriving, and used it as a launch pad to build a holding company with several retail chains.

Long focused on upper middle class markets in the U.S. Northeast and Midwest, Lord & Taylor's 50 department stores are now increasingly struggling to distinguish themselves from competitors such as Macy's Inc and off-price retailers including TJX Companies Inc .
Unless Hudson's Bay, which has lost two-thirds of its market value in the last three years, can reposition Lord & Taylor, the chain risks weighing further on the company's stock performance, industry insiders said.

"'What do we offer consumers that's differentiated?' If they can't answer that question, they need to come up with a reason for consumers to care," said Greg Portell, lead partner in the retail practice of A.T. Kearney, a management consulting firm.

Lord & Taylor's president Liz Rodbell left Hudson's Bay at the end of April, leaving the retailer with another challenge to face. The company expects to name a replacement in the coming weeks, a Hudson's Bay spokeswoman said.

ABORTED DEALS

Hudson's Bay has mulled a range of options for Lord & Taylor. In March, it considered acquiring Bon-Ton Stores Inc, a bankrupt retailer operating 250 department stores in 23 U.S. states, to merge it with Lord & Taylor, the sources said.

Such a deal would have complemented the two chains' customer base and improved their buying power, the sources added. However, Hudson's Bay subsequently abandoned its pursuit of Bon-Ton to focus on other opportunities and continue its revamp, according to the sources. A U.S. bankruptcy judge approved Bon-Ton's wind-down last month.

Hudson's Bay held talks earlier this year about merging with private equity-owned department store operator Neiman Marcus Group Ltd, a deal it also pursued unsuccessfully last year, the sources said.

The talks once again ended without an agreement, in part because Neiman Marcus' $5 billion debt load was too big for Hudson's Bay, the sources added.

SALES DROPPING

Lord & Taylor's 10 percent contribution to total retail sales at Hudson's Bay has declined significantly over previous years as the company has grown through acquisitions, analysts estimate. The Lord & Taylor division, which includes the Hudson's Bay department stores and Home Outfitters in Canada, reported comparable sales falling 2.6 percent year-on-year in the three months that ended in February.

Comparable sales at Saks Fifth Avenue, whose 41 stores analysts estimate make up a third of sales at the company, rose 2.1 percent over the same period.

Lord & Taylor has announced it plans to launch a dedicated internet store on budget retailer Walmart Inc's website this month, a move that may help its presence online but could take further sheen off its name, according to the sources.

Hudson's Bay has also shown willingness to trim some Lord & Taylor locations. The chain's flagship property in New York City was sold to WeWork Cos last year for $850 million. As a result, that store will shrink to a quarter of its current size.

The company also said in October it was exploring a sale of its Hudson's Bay store in downtown Vancouver, together with its joint venture partner RioCan Real Estate Investment Trust . Reuters reported on Monday it had found a buyer for that store for C$675 million ($524.4 million).

Some Hudson's Bay shareholders want more. The company should sell one of its weak banners, rather than add another to its stable, which include Galeria Kaufhof in Germany and Galeria Inno in Belgium, said Joshua Varghese, portfolio manager at CI Investments Inc, which is Hudson's Bay's sixth-largest shareholder.

"Hudson's Bay should focus on having fewer stores," Varghese said. "If that means selling certain brands, then so be it. Lord & Taylor does make sense."

© Thomson Reuters 2024 All rights reserved.