Hudson's Bay Launches Initiatives Across North American, European Operations

As it continues expanding and consolidating its international operations, Hudson's Bay Co. has formed initiatives to enhance multi-channel retail operations, accelerate financial performance and drive future growth. The company also has successfully completed the previously announced acquisition of Galeria Holding, parent company of Germany’s leading department store Galeria Kaufhof and Belgium’s only department store, Galeria Inno for an enterprise value of €2.5 billion, or about $2.8 billion.

In conjunction with the acquisition closing, HBS Global Properties, HBC’s real estate joint venture with Simon Property Group, acquired 41 Galeria properties in a transaction valued at €2.6 billion, or about $2.91 billion

With the Galeria acquisition, HBC has established an international retail platform with over 460 locations across eight leading banners in four countries, the company noted, adding that it now operates the leading department store banners in Canada, Germany, and Belgium, in addition to its iconic banners Saks Fifth Avenue, Lord & Taylor, and Saks OFF 5TH in the United States.

In North America, Hudson's Bay initiatives include:

• Establishing new Centers of Excellence for the customer relationship management, creative and human resources functions, which will complement existing centers of excellence in digital, information technology, legal, logistics, and real estate operations.
• Consolidating key business functions to enable more productive and efficient operations as well as to refocus resources on customer-facing business elements.
• Implementing technology enhancements and accelerating tech consolidation to one common platform across store banners under the leadership of newly hired executives Janet Schalk, chief information officer, and Dion Rooney, evp/HBC digital.
• Aligning resources to match business strategy while investing in areas that will drive growth.

Taken together, HBC asserted, the outlined initiatives should result in annualized cost savings and synergies totaling $75 million during fiscal year 2016 in addition to the previously announced synergies associated with the integration of Saks Inc., which the company acquired in 2013. HBC anticipates expanding the Saks operation, including introducing it to Canada. HBC stated that it anticipates taking a $20 million third quarter charge in connection with the realignment.

In announcing the initiatives, Richard Baker, HBC’s governor and executive chairman, said, “Through organic growth and acquisitions, HBC has established itself as one of the fastest-growing department store retailers in North America and a truly unique global company. This significant growth has created meaningful opportunities for us to further build our business while operating even more effectively. To that end, we are focused on taking the appropriate next steps to position HBC to deliver continued industry-leading performance and long-term growth, while best delivering for our customers in a constantly evolving industry environment.”

As part of its Galeria initiative, HBC also plans to eventually introduce Saks in Germany, the company said in a joint statement with Galeria Holding. Other initiatives that will follow HBC's acquisition of Galeria include expansion of brand availability in the European retail operation, enhancing digital capabilities and optimizing the use of store space.