What HBC’s CEO Said She Learned From Barneys’ Bankruptcy
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As the company moves closer to becoming private and wades through a turnaround strategy that’s yielding mixed results, Hudson’s Bay Co. CEO Helena Foulkes is taking note of what not to do from some of retail’s latest casualties.
“Barneys [New York] is an example of how tough it is out there,” HBC’s chief said of the recently bankrupt luxury department store during a conversation with WWD editorial director James Fallon at the publication’s Apparel & Retail CEO Summit in New York today. “People have loved Barneys. We hope very much to learn from what people loved about Barneys and [use that to] help us build on our experiences at Saks.”
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Foulkes comments are particularly noteworthy as they come on the heels of reports that a potential deal to save Barneys from liquidation could actually involve HBC’s Saks Fifth Ave. banner.
This month, Barneys, which filed for Chapter 11 protection in August after shouldering skyrocketing rents and shifting consumer demands, entered into an agreement to sell its assets to Authentic Brands Group and B. Riley Financial Inc. in a cash deal estimated at roughly $271.4 million.
Although the transaction isn’t likely to be finalized for a few weeks — and Barneys could still pursue other options — reports have suggested that part of the ABG-Barneys deal would see the brand management firm license the Barneys name to HBC and its Saks Fifth Avenue banner, which are expected to create private-label merchandise and build shop-in-shops within some Saks locations.
While Foulkes said today that she had no new details on such a deal, she noted that she sees potential in a Barneys-Saks partnership.
“If something were to happen with Barneys, I also see a huge opportunity for us to learn what customers … loved about Barneys and how do we tap into that,” she said. “We are also very excited about the opportunity to work with ABG. I think they do a phenomenal job with very new approaches to marketing. So if that does come to fruition that gives us a lot of places to go to figure out how to incorporate that within Saks.”
When HBC reported second-quarter results last month, it said its losses widened to 462 million Canadian dollars ($350 million), or $CA2.51 per share, compared to 2018’s $CA104 million. Revenues totaled $CA1.9 billion, with comps down 0.4%, including a 19% year-over-year increase in digital sales.
Since Foulkes took the helm in 2018, she moved the company toward simplifying its business — offloading Gilt that same year and firming up plans last month to sell the storied Lord & Taylor business to fashion rental service Le Tote.
WWD’s CEO Summit it taking place in New York on Oct. 29 and 30. Other speakers at the event include PVH Corp. CEO Manny Chirico, Ralph Lauren CEO Patrice Louvet, Pyer Moss creative director and founder Kerby Jean-Raymond and Lululemon Athletica CEO Calvin McDonald.
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