Hudson’s Bay, North America’s oldest company. What started out as a fur trade business has grown to a large fashion retail conglomerate that includes multiple stores in Canada, America, and Europe. HBC is responsible for the operation of multiple retail companies, including:
Home Outfitters – Sacks Of Fifth
Lord & Taylor Gilt
Galeria Kaufhof (German Retailer)
Timeline: HBC Hudson Bay was acquired by Richard Baker, an American businessman. The acquisition cost $1.1 billion. In 2008, NRDC Equity Partners bought HBC Hudson Bay. Helena Foulkes is the CEO. Foulkes is a Harvard graduate who previously served as the Vice-President of CVS Pharmacy. It currently has 480 locations worldwide, with its headquarters in Toronto. It specializes in selling designer apparel of the highest quality, including Polo Ralph Lauren’s, Tommy Hilfiger’s, Calvin Klein, Guess and Coach. The location determines whether they sell jewelry, homeware, and cosmetics. Although there are many companies trying hard to be big in the retail sector, only a handful of them succeed. HBC’s biggest competitors include Nordstrom, Neiman Marcus and Macy’s. HBC operates primarily in Canada, USA, and Europe. The majority of HBC’s sales are in the US, Canada, and Europe. HBC is constantly looking for new markets in Europe and other geographical areas. There are many high-end fashion brands at Hudson’s Bay, but Polo Ralph Lauren is the most well-known. Polo Ralph Laurens prices usually range between $70 and $300+. Polo is excluded almost entirely from all sales in the store to maintain its brand image. Only a few Polos are marked down. Polo has a section of the store that is dedicated to them. This includes their logo, their furniture and special wooden hangers. These racks help preserve their brand’s exclusivity and brand value. Value Package is made up of three parts: Benefits, Features, and Function. These are used to help company executives determine their strengths and weaknesses.
HBC’s function is to sell clothes, jewelry, housewares, and cosmetics. They do a fantastic job with their retail stores located in major cities and the online shipping site which provides all over Canada.
Features: HBC stores are known for their elegant and pleasant decor, especially during holidays like Christmas. Many stores also have a marketing staff that decorates the stores accordingly. HBC Capital One Mastercard is another feature that customers love. You can earn points for every dollar you spend in-store, and if you accumulate 2000 points, you get a $10 gift voucher. Rewards/Mastercard members also have access to special sales before the public and receive gift cards by mail. These features build loyal customers who keep returning to shop because of the HBC’s many other offerings.
Benefit: HBC’s rich history in Canada makes it a proud choice for customers. They also contribute to the longevity of North America’s oldest company. HBC has a great reputation for being a high-end retail store. HBC offers exclusive brand names to customers and provides excellent customer service. This is why HBC is so popular.
As a large-scale retailer, it must be able to adapt to the changing trends. HBC must offer new and exciting products to retain their customers and keep them in business. HBC is constantly updating their clothing inventory. They add new brands or create new clothing lines. The new “The Fall50 – New brands and Trends, Latest Items” collection includes the 50 most fashionable items The Hudson’s Bay is currently selling. This line keeps up with seasonal trends. Their official Olympic clothing line is another Canadian-made line. This line helps Canada maintain its heritage and keeps it as Canada’s oldest business.
Recent financial statements from HBC show that they have been in financial difficulties, especially over the past 2 years. End 2014’s total sales/revenue were $5.223B. In 2015, it grew 56.40% by $8.169B. 2016 saw a 36.4% increase to $11.162B. 2017 saw a 30% increase to $14.455B. 2018 saw a decrease of 0.73% in sales to $14.349B. HBC sales increased exponentially from 2014 to 2015, 2016 to 2017, and 2017 to $14.349B in 2018, but sales declined by 0.73%.
Although HBC has a track record of growing sales, this does not mean that it is more profitable. HBC suffered a loss of $516million in 2017 and $581million in 2018, but was profitable in the past. HBC saw a surge in sales between 2015 and 2017. This was due to Sears’s closure of their stores. HBC could then capture a fair share of Sears’ sales. HBC was the only high-end retailer in Canada. Because their main competitor had left, HBC saw sales rise. HBC has experienced heavy losses over the past two years, making profit the most crucial aspect of their business. In general, the retail market has suffered from a drop in demand since consumers have access to online shopping for their clothes. HBC’s revenues have declined over the past 12 months due to lower sales. Commerce department USA has estimated that the retail sector overall is at an 11-month low (early 2018).
The retail sector’s overall decline is known as the Retail Apocalypse. The fact that they have high operating costs is a major reason for their losses. Many investors are buying stores in remote areas, where there are few buyers, or in malls that are in poor condition. HBC’s vast real estate portfolio is one of the reasons investors still want to invest. HBC’s real property is valued at $6.4 billion. Instead investors and chain managers focusing on sales and improving financial performance, investors pressurize HBC to monetize its realty assets and make them more valuable. HBC is also losing money because its overseas operations are not profitable. Galeria Kaufhof, their German retailer, was purchased by HBC in 2015. Sales per store have decreased significantly since then. HBC was offered a bid by Sigma holdings (Austrian property company), but HBC board turned down the offer because it undervalued the business. HBC also purchased Guilt an online retailer worth $250 million. Unfortunately, the initial investment wasn’t worthwhile and HBC didn’t feel it fit in its portfolio. HBC decided to sell Gilt to cut costs and to save HBC money from its financial woes. HBC tried to expand into new areas, but it was not as profitable as they expected.
Hudson’s Bay is a well-known company with a rich history. However, the market is changing rapidly and e-commerce has become more popular than ever. HBC has a great track record. However, it’s difficult for a business of this size to turn the tide and become profitable. HBC has laid off over 2000 employees to make it a more profitable company. They have also significantly reduced its administration costs, closed down failing stores, and are planning to sell some real estate assets. A long term partnership/collaboration with HBC would be a risky venture since its uncertain whether or not they can turn things around, but buying or selling something from HBC at this point would be an excellent idea since they are looking to get rid of assets etc. HBC may sell it at a discount to market value as they are trying to get rid of some assets.
HBC is the fastest-growing departmental store group in the world today. It has used its Canadian heritage and history to create a retail brand.
