The latest results of the department store operator Hudson’s Bay Company showed the impact of discounts at its Saks Fifth Avenue operations, along with lower same-store sales.
The Canadian firm, which owns Saks Fifth Avenue, said sales at stores that have been open for at least 13 months were down 1.7 percent. That slip came in the fiscal third quarter that ended in November.
As noted by The Wall Street Journal, the company has faced headwinds in luxury sales, and also has been in the midst of a market share battle in Canada.
In terms of headline numbers, the fiscal third quarter saw revenues of 1.8 billion Canadian dollars, down from just under 1.9 billion a year ago. Losses were up to C$226 in the latest period, up from C$161 last year. Bottom lines were weighed down by sales of stakes in ventures that included European real estate and retail operations.
Digital sales were up 15 percent year on year.
“We must quicken the pace of improvement while bearing the ongoing costs of our strategic portfolio reset and the headwinds impacting our industry,” Chief Executive Helena Foulkes said on Tuesday (Dec. 10), as reported by the Journal.
Hudson’s Bay has been the focus of competing takeover offers. In one example, in October, an investor group helmed by Executive Chairman Richard Baker offered to buy the 43 percent stake that the group did not already own, for a purchase price of C$10.30 for shares outstanding. In a separate bid seen in November, C$11 was offered by Catalyst Capital Group, a private equity firm.
In the meantime, Hudson’s Bay has seen a drag on its Saks Fifth Avenue operations, which in the latest quarter saw same-store sales were off 2.3 percent, and sales at the company’s namesake stores were off nearly 4 percent, as noted by CBC.com. Management has cited a “pullback in luxury consumers,” as noted by Foulkes, “allowing shoppers to more frequently take advantage of markdowns, which ultimately reduced full-price sales.”