Hudson’s Bay e-commerce efforts pay off in second quarter

TORONTO — Hudson's Bay Company's second quarter was characterized by strong same store sales growth at Hudson’s Bay and rising e-commerce sales, which were partially offset by a decline in same store sales at Lord & Taylor.

Despite the 1.2% same store sales decline at Lord & Taylor, the company reported consolidated sales of $947.7 million, a 3.9% increase compared to the second quarter of 2012, and consolidated same store sales grew 3.5%. At Hudson's Bay same store sales grew 6.2%. E-commerce sales soared 56.1% to $37.3 million, reflecting the company’s strategic focus on growing its e-commerce channel.

“Hudson’s Bay continues to demonstrate industry-leading sales growth,” stated Richard Baker, HBC’s governor and CEO. “This performance has been driven by a continued focus on our stated strategic initiatives. We are seeing strong performance from stores and departments that have recently received capital investments. We are also pleased by the continued growth of our e-commerce sales, which accelerated in the second quarter and are up approximately 45% year-to-date following our re-launch of both banner websites. Our online business was a key factor in our results, and reflects our increased investment in this component of our business. We are confident that our inventory is well-positioned for the Fall season and expect stronger financial performance from Lord & Taylor and the overall business in the back half of the year.”

Sales at Hudson's Bay were driven by strong performance of ladies' and men’s apparel, ladies’ shoes, handbags and accessories, the continued growth of e-commerce and the five Topshop/Topman stores. Sales growth was particularly strong at recently renovated locations, including the company's Vancouver Flagship store.

Sales at Lord & Taylor were impacted by lower customer traffic compared to the second quarter of 2012. Relative strength in men’s apparel and shoes, handbags and watches and the continued growth of e-commerce was offset by underperformance in ladies’ apparel and other seasonal merchandise.

The company's acquisition of Saks is expected to close before the end of the calendar year, subject to approval by Saks shareholders and other customary closing conditions. The combined company will operate 321 stores, including 179 full-line department stores, 73 outlet stores and 69 home stores in prime retail locations throughout the U.S. and Canada, along with three e-commerce sites.