Hudson’s Bay Company, owner of Lord & Taylor, Saks Fifth Avenue, Saks Fifth Avenue “OFF 5th” and Hudson’s Bay, reported first quarter net earnings of $176 million, as its retail sales climbed to $1.85 billion from $971 million year-over-year. The dramatic increase was a clear indicator that the company benefited from its acquisition of luxury retailer Saks for $2.9 billion in late 2013.
However, in another instance of off-price retailers outpacing their full-price counterparts, Hudson’s Bay Company revealed that OFF 5th same store sales jumped 15.1%, whereas Saks Fifth Avenue only grew 2.6%. Lord & Taylor grew 2.5%.
OFF 5th’s notable increase was powered in part by strong growth in its new online commerce business and success in moving residual Lord & Taylor products to OFF 5TH, according to Reuters.
“We found that the Saks OFF 5th customer loved it and we sold through the products very quickly,” group chief executive Richard Baker told Reuters. “Which of course is good as part of our synergies and exiting product in an efficient manner from Lord & Taylor, but it also led us on a road map to change our assortment at Saks OFF 5th.”
The revamped outlet chain, with new footwear and handbag formats and improved ticketing and signage, opened two new locations in Florida and Wisconsin. Three Saks Fifth Avenue locations were shuttered, but the company said it intends to introduce the store to the Canadian market soon.
“Overall first quarter performance was in the range of our expectations,” Baker said. “We are encouraged by the business trends witnessed through the quarter, which bode well for the balance of this year. Furthermore, we are pleased by the progress of our integration of Saks, which is on-track to achieve approximately $50 million in HBC synergies targeted for this year. As a result, we are reaffirming our outlook for Fiscal 2014 as provided in April.”