HBC CEO says Topshop, which will be in 11 Hudson’s Bay stores by the fall, generates more than $600 in sales per square foot. <137>TORONTO, ONTARIO: OCTOBER 4, 2011 - Interior photos of TopShop inside The Bay at Yorkdale Mall in Toronto. (Tim Fraser for The Globe and Mail) (For ROB story by Marina Straus)<137><137><252><137>Tim Fraser/The Globe and Mail
With a new branding effort and logo, Hudson's Bay Co. is pushing ahead with its reinvention and ambitious merchandising plans just as competition heats up in Canadian retailing.
Richard Baker, the U.S. real estate mogul and HBC's chief executive officer, is spearheading a raft of initiatives to shore up the retailer's position as the country's top seller of women's shoes while introducing five more British-based cheap-chic Topshop store-within-stores and, by next year, New York-based Kleinfeld Bridal salon of Say Yes to the Dress reality-show fame at HBC's downtown Toronto flagship store.
"We're searching around the world for fantastic concepts that we can bring to Canadians," Mr. Baker said in a recent interview. "We have the locations, we have the real estate, we have the infrastructure."
Mr. Baker swept into the domestic retail scene in 2008 and turned it on its head: He snapped up HBC for about $1.1-billion, sold most of its Zellers leases to U.S. discounter Target Corp. for $1.8-billion three years later and took HBC public last November.
As he prepares to release HBC's fourth-quarter results on Thursday, he is racing to bolster Hudson's Bay even as Target pumps up its business here and U.S. department-store rival Nordstrom Inc. gets set to open its first store in Canada in 2014.
"The long-term transformation of HBC into a more productive and profitable department store remains intact," Wayne Hood, retail analyst at BMO Capital Markets, said last week.
Even so, Mr. Hood expects HBC's fourth-quarter results to fall below expectations largely because of challenges at its U.S. Lord & Taylor tied to poor weather and last fall's Hurricane Sandy, leading to higher-than anticipated price markdowns to clear out excess merchandise.
Mr. Baker is undeterred by short-term setbacks. He's focusing on key areas of apparel, shoes, handbags, jewellery and cosmetics to lift sales at Hudson's Bay to about $175 per square foot in three to five years from $133 in 2011. Topshop, which will be in 11 Hudson's Bay stores by the fall, generates more than $600 in sales per square foot, he said.
In women's shoes, HBC is moving the department to the main floor and doubling the offerings at its Toronto downtown flagship. "We have a lot more to do," he said.
Overall, "the opportunity in Canada at Hudson's Bay is clearly off the charts," he told a conference last month. "We're here to make money. Our group still owns 82 per cent of the company – we're going to own a lot of this company for a long period of time. Every single dollar we spend, I feel like I'm opening up my wallet and pulling out each dollar bill myself."
Hudson's Bay is also ramping up its online sales, which grew 88 per cent to $83-million in 2011 and 70 per cent in the first 39 weeks of 2012. The retailer even tested same-day delivery in Toronto and (from Lord & Taylor) New York City recently, and is looking to expand the pilot later this year, a spokeswoman said.