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Slow Sales at Saks Weigh on HBC’s Q4 Performance

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A less-than-stellar holiday performance at Saks Fifth Avenue dulled the sheen of an 11 percent growth in same-store sales for Hudson’s Bay Company (HBC) in the fourth quarter.

The Toronto-based department store operator—which also owns Lord & Taylor, Saks Off 5th and Gilt, in addition to its namesake—on Tuesday said that same-store sales at Saks slipped 1.2% in the three months ended Jan. 31 and declined by 1 percent in fiscal 2015.

That doesn’t bode well for HBC’s recently announced plans to open seven more Saks stores, including the retailer’s first location in Canada.

The results were in stark contrast to the luxury retailer’s off-price arm, Saks Off 5th, which posted a 2 percent increase in quarterly comps and a 6.3% rise for the full year. HBC’s older banners, which include Hudson’s Bay and Lord & Taylor, had a decent end to the year, too: same-store sales were up 4 percent in the fourth quarter and 4.7% for fiscal 2015.

The company’s digital division, however, was the real winner, posting a 22.8% increase in sales on a constant currency basis in the most recent quarter and 23.2% for the overall year.

But HBC Europe, including the recently purchased German department store group Galeria Kaufhof and Belgium’s Galeria Inno, had a so-so season. Same-store sales inched up 0.4% in the crucial holiday quarter and just 1.7% in the Sept. 30-Jan. 31 period.

“Online sales were especially strong, reflecting our focus on building superior digital capabilities and further integrating our brick-and-mortar and e-commerce businesses,” HBC CEO Jerry Storch said in a statement. “As we continue to execute our all-channel strategy we are committed to providing our customers with an exceptional experience as they shop our banners whenever, wherever and however they choose.”

HBC will report full financial results for the quarter and year ended Jan. 31 after the market close on Apr. 4. The company’s stock opened Wednesday at $16.32, down from a 52-week high of $29.52.

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