Saks OFF 5TH Set To Expand

It’s an odd time to be in the department store business. Not only are many big names still digging themselves out from a winter of no snow and low sales, but they’re also finding it hard to keep up with their online counterparts.

It seems, however, that Hudson’s Bay Company is the exception to that very prevalent rule.

HBC and its subsidiaries, which include Saks Fifth Avenue and Saks OFF 5TH, held its Q4 2015 earnings call on Tuesday (April 5), and there was happy news to go around: Consolidated store sales had increased 70.4 percent to $4.5 billion, and same-store sales were up 1.8 percent. While the first figure may reflect added sales of German retailer Galeria and Gilt Group, which were both purchased by HBC last year, they’re still impressive numbers in a retail segment that’s seeing precious few of them.

What does HBC plan to do with the revenue of its successful quarter? Expand, expand, expand. The company has earmarked between $750 million and $850 million for capital investments that will include, but are not limited to, store renovations, tech innovations and a massive expansion of Saks and Saks OFF 5TH storefronts. HBC plans on opening seven new flagship Saks locations and 32 of the OFF 5TH variety with an estimated 30 percent of its growth budget.

In a sign of uber-confidence, Richard Baker, governor and executive chairman at HBC, also noted that the company has plans to open 40 Saks OFF 5TH stores in Germany by the end of 2017. All of this could, Baker said, lead to a 50 percent spike in revenue if things go according to this ambitious plan.

“For our leading retail banners, 2015 was a story of fostering innovation, while focusing on operational efficiencies,” Jerry Storch, HBC CEO, said in a statement. “In the face of a challenging retail environment, our teams came together, and we continued our relentless focus on our customers.”