Hudson’s Bay, the owner of Saks Fifth Avenue announced this week it would be cutting as many as 2,000 jobs in North America in its major effort of restructuring as it posted a loss during the first quarter that was much wider than had been expected.
The operator of department stores based in Canada, which posted a drop that was steeper than had been expected in retail sales for the quarter, said its move to cut jobs would help the business save over C$350 million or$250 million per year.
CEO Jerry Storch in his prepared statement said the company knows it can do better and bold action is being taken to do so.
Hudson’s Bay said the job cuts had been decided following a review of six months of different ways to cut costs and to streamline the overall operation.
The company as well as other large retailers in the U.S. find themselves struggling to amidst an upheaval industry wide as shoppers shift from visiting brick and mortar stores to shopping much more online.
Nordstrom, an operators of department stores based in the U.S. said on Thursday that Nordstrom family members were taking into consideration that the company be taken private and selling its debt so the operations could be reshaped.
The plan of Hudson’s Bay should be implemented in full by the end of its fiscal year 2018, and will include savings of C$75 million announced earlier in 2017.
It added that it expected take charges for restructuring of approximately C$95 million over the upcoming year and measures totaling over C$125 million of savings annually had been implemented already.
Separate teams were established by the retailer to focus on the Lord & Taylor and Hudson’s Bay chains of department stores. A veteran of close to two-decades with the company Alison Coville will be in charge of Hudson’s Bay, while Liz Rodbell, who headed both chains previously, will be in charge of Lord & Taylor.
The company posted a C$221 million loss equal to C$1.21 a share for the quarter that ended April 29. This loss was wider than the 76 cents a share expected by analysts.
Retail sales for the quarter were C$3.2 billion, which represented a drop of 3% from the same period one year ago, and less than forecasts by analysts of just over C$3.26 billion.
The difficulties of the company during its most recent quarter surfaced in May when it posted a drop of 2.9% in sales at comparable stores.