Hudson’s Bay Company announced Tuesday plans to close 10 Lord & Taylor locations, including the brand’s flagship store in New York.
The news broke along with the retail group’s announcement that it has sold fast fashion site Gilt. The balance of the Lord & Taylor closures are expected to take place in the first quarter of 2019.
“We’re taking advantage of having a smaller footprint to rethink the model and focus on our digital opportunities. Sales at Lord & Taylor’s digital business have consistently grown double digits and we believe this brand has the potential to reach a nation customer base. Our partnership with Walmart.com, which went live last week, is a great example of this and represents how we think about the entire business,” said CEO Helena Foulkes, speaking on the company’s first quarter investor’s call.
The company, which reported a 1 percent sales increase and a 0.7% comparable sales decline for the first quarter, has been struggling and looking for a lifeline. At one point, HBC had put itself up for sale and is currently attempting a turnaround. HBC reported a net loss for continuing operations of $314 million Canadian ($242 million) compared to a net loss of $214 million Canadian ($164.9 million) during the prior-year period.
The bright spot in the portfolio during the period was Saks Fifth Avenue, which turned in a 6 percent comp store increase. With Gilt out of the picture, the company is now focused on revitalizing the Saks Off 5th business, which reported a 3.5% decrease on comp sales in the first quarter.
To capitalize on these changes, the company has installed a slate of new leaders to “improve across all areas of the business.”
“These actions will allow us to focus our energy on businesses with the greatest potential to impact our results in a meaningful way,” Foulkes said. “Accretive asset sales are just one part of our real estate strategy. We believe there are opportunities to create partnerships that better utilize physical space while increasing traffic and improving the economics of our stores.”
In October, HBC announced sale of the Lord & Taylor flagship to WeWork, the co-working company. At the time, the plan was to shrink the store to 150,000 square feet and leverage the traffic generated by WeWork tenants to drive traffic.
That same month, word spread that HBC would be teaming up with Walmart, by launching a digital flagship for Lord & Taylor on the big-box retailers revamped site. Walmart, which was in the midst of repositioning itself as a “fashion destination” with beefed up storytelling and more compelling visuals. The addition of Lord & Taylor brings more than 125 brands to the site, including Tommy Bahama, Vince Camuto, Miss Selfridge, La La Anthony, Lucky Brand, H Halston and Effy.