Hudson’s Bay's Digital Sales Skyrocket

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Hudson’s Bay's Digital Sales Skyrocket

By Jamie Grill-Goodman - 06/20/2016
Hudson's Bay Co. (HBC), the department store retailer that owns Saks Fifth Avenue and Off 5th Avenue, as well as Lord & Taylor, saw digital sales continue to grow across all banners in its first quarter 2016 (comparable digital sales were up 7.4% on a constant currency basis ) and up 86% with the addition of Gilt. The company acquired Gilt Groupe Holdings, Inc. for $250 million in cash in February with plans to integrate the luxury flash-sale website into Saks OFF 5TH. 

"I would say we have got some questions about the comparable store sales increase in our Internet business and I wanted to assure you, to remove Gilt from the numbers that we would still be growing our base internet business if you will at double digit rates," said CEO Gerald Storch.

During the first quarter HBC opened 8 new OFF 5TH stores in the U.S. and its first Manhattan location at 57th Street in Lexington, which houses the first physical Gilt store within a store concept.
Now HBC said it's working to ensure that all of its North American banners are operating on the same platform.

"We're aiming to have Lord and Taylor, Saks and OFF 5TH on a common system by the end of this year which will improve our ability to implement changes across multiple banners," said Storch.

HBC is also seeking to improve its fulfillment capabilities through the installation of new robotic fulfillment technology, which was first introduced in the company's distribution center in Toronto, and is scheduled to go live later this quarter.

According to Storch, the company needed to accommodate the growth of hudsonbay.com and sees "truly an unlimited flight path for hudsonbay.com."

"Following the Toronto implementation, we expect to roll out similar technology in our U.S. distribution centers," said Storch. "This improved technology for digital fulfillment will help us increase the speed of orders, improve utilization of the space in the distribution centers and reduce expenses associated with our online sales."

The company plans a new all-channel fulfilment distribution center to open in Pottsville, Pennsylvania on July 1, 2016, which will utilize the robotic retail technology that is approximately three-times faster than the typical technology utilized in e-commerce DCs.

"As we move into the second half of 2016, we feel confident that our ongoing efforts to become more efficient in conjunction with our all-channel strategy of combining exciting retail destinations with a best-in-class e-commerce platform will drive both sales and earnings growth," said Storch.