In its second-largest acquisition, Amazon buys the company for $970 million.
E-commerce accounts for 21.3% of growth in the first quarter of 2014.
Canadian merchant Hudson’s Bay Co. had a strong first quarter thanks to e-commerce sales growth and last year’s acquisition of Saks Fifth Avenue.
For the first quarter ended May 3, Hudson’s Bay, No. 130 in the 2014 Internet Retailer Top 500 Guide reported:
- E-commerce revenue, which Hudson’s Bay, or HBC, calls digital sales, of C$207 million ($190.4 million), up by 566.6% from C$31.10 million ($28.6 million) in the first quarter of 2013. Online sales include Hudson’s Bay and Lord & Taylor, termed the Department Store Group, as well as Saks Inc., which Hudson’s Bay acquired last summer for $2.9 billion. HBC attributes online growth in the quarter to the addition of Saks and the Department Store Group’s doubling of web sales compared with the prior year quarter. HBC did not break out individual web sales by brand.
- Comparable-store sales, including e-commerce and outlet stores, grew 2.8% overall. Hudson's Bay and Lord & Taylor together grew 2.5%, while Saks Fifth Avenue grew 2.6%, and the Saks Off 5th discount format stores grew 15.1%.
- Total retail sales were $C1.86 billion ($1.71 billion), an increase of 110.4%, from C$884 million ($813 million) in the previous quarter. The increase was primarily attributable to the inclusion of Saks, HBC says.
- Net income of C$176 million ($162 million) compared with a net loss of $82 million ($75 million) in the first quarter of 2013.
The web accounted for 11.1% of sales in the quarter and 21.3% of growth, compared with 3.5% in the prior year period.
Saks did not break out 2013 quarterly web sales prior to the HBC sale, but Saks Direct, its e-commerce unit, generated an estimated $899.0 million in sales online in 2012, up 20.1% from $748.6 million in 2011, according to Top500Guide.com.
“We are encouraged by the business trends witnessed through the quarter, which bode well for the balance of this year,” says HBC CEO Richard Baker. “Our confidence in HBC's future is based upon our core sales growth strategies.” Those strategies include driving online sales across all of its brands; growing sales at Off 5th, which offers discounted merchandise through 75 U.S. stores; new stores in the U.S. and Canada; and introducing Saks Fifth Avenue stores in Canada, Baker says.
HBC said earlier this year that it would spend C$40 million ($37 million) in 2014 to improve its digital systems, based on the premise that e-commerce will drive growth.
In February, HBC completed the sale of its downtown Toronto flagship store and office complex to an affiliate of The Cadillac Fairview Corp. Ltd. for C$650 million ($598 million). HBC says it used the proceeds to pay down debt.