TORONTO—Hudson's Bay Co., parent company of Saks and Lord & Taylor, said Thursday that it's cutting 2,000 jobs in North America. The downsizing, which includes layoffs announced by HBC this past February, follows a disappointing quarter for brick and mortar sales on both sides of the Atlantic.

“We are reallocating resources to accelerate the opportunity we see online, as we run our brick-and-mortar operations more efficiently,” says HBC executive chairman Richard Baker. The layoffs, which reportedly began on Thursday, are intended to “flatten the organization by removing layers to make HBC more nimble and streamline the decision-making process,” according to Thursday's announcement.

HBC said Thursday that it was implementing a “Transformation Plan” to increase operational synergies, sharpen capabilities and reduce expenses. Along with the job cuts, another pillar of the plan will be the creation of two distinct leadership teams, one focused on Hudson's Bay branded stores in Canada and another focused on the Lord & Taylor brand in the US.

Simultaneous with announcing the plan, HBC named a new president for the Hudson's Bay brand, company veteran Alison Coville, and said that Liz Rodbell, who has served as president of both Hudson's Bay and Lord & Taylor for the past three years, now will focus exclusively on Lord & Taylor. Annual savings from the transformation plan are expected to total $350 million by the end of fiscal 2018.

For the 13 weeks that ended April 30, same-store sales were off by 2.9% year over year, with a 6.8% decline in the off-price Saks Fifth Avenue OFF FIFTH and Gilt brands while European sales were flat. However, comparable digital sales on a constant currency basis were up by 5.4% Y-O-Y, and up by 13.2% when Gilt sales are factored out of the equation. In all, the company lost $221 million during the quarter.

“This was a tough quarter for HBC,” says Baker. “While the retail apparel market remains particularly challenging, we are taking steps to adapt,” beginning with the Transformation Plan. “We strongly believe that our model of combining world class real estate assets, which are less impacted by short-term trends, with our diverse retail businesses provides long-term value for the company and our shareholders.”

Instant Insights /

Hudson's Bay Will Cut 2,000 Jobs

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