Citing ‘outsized growth,’ Hudson’s Bay Co. projects more investment in digital this year

The parent company of Hudson’s Bay, Lord & Taylor and, as of Q4, Saks Inc., says it generated C$369.6 million on the web in 2013. It plans to spend C$40 million ($36.2 million) this year to enhance its digital systems.

Allison Enright

“Sales growth is driven by digital,” said Donald Watros, Hudson’s Bay Co. president and acting chief financial officer, this morning in a call announcing the retailer’s fourth quarter and fiscal 2013 results. That’s why the retailer, which owns the Hudson’s Bay, Lord & Taylor and Saks Inc., will spend C$40 million ($36.2 million) this year to enhance its digital systems. In part, that will include enhancing its ability to fulfill online orders from stores, which will in turn allow it to list more items on its web site, the company says.

Web sales totaled C$369.6 million ($334.8 million) for Hudson’s Bay in fiscal 2013, which ended Feb. 1. This total includes Q4 web sales for Saks.com. Hudson’s Bay Co. closed its US$2.9 billion purchase of Saks Inc. Nov. 4, the first day of Hudson’s Bay’s Q4 reporting period. Hudson Bay Co. chairman Richard Baker cited Saks Inc.’s digital capabilities as a reason why Hudson’s Bay acquired it: “One of the compelling aspects of acquiring Saks was their digital capabilities were more developed than ours.”

“Digital sales were a significant source of our momentum last year and we expect continued outsized growth of this channel,” Baker continued, noting the creation of the HBC Digital division, which is headed up by Michael Burgess, the former president of Saks Direct. Baker said consumers who shop on the web and in Hudson Bay-operated stores spend three to four times as much as consumers who shop only online or only in stores. He said that 70% of Hudson’s Bay retail transactions are influenced by digital, and that its C$40 million investment in digital will also have a positive impact on stores. “[We want to] move quickly and efficiently to capitalize on this tremendous opportunity,” he said.

For the fourth quarter ended Feb. 1, Hudson’s Bay, No. 158 in Internet Retailer’s 2013 Top 500 Guide, reported:

Web sales accounted for 10.5% of total sales in the fourth quarter compared with 4.2% in the same period last year.

For the 2013 fiscal year ended Feb. 1, Hudson’s Bay reported:

Web sales accounted for 7.1% of total sales in 2013 compared with 3.4% in 2012.

As Hudson’s Bay Co., propelled by Sak’s Inc.’s substantial web sales, moves forward with its digital investments, it may soon become one of the top 10 online apparel retailers in the world, according to an analysis of sales numbers from the Top500Guide.com database. 



Donald Watros, e-commerce, fiscal 2013 earnings, Hudson's Bay Co., Michael Burgess, q4 2013 Earnings, Richard Baker, Saks Inc., Top 500, Top500Guide.com