Hudson Bay Company news 2017: Introduction
On May 24, 2017, we wrote our blog RETAIL BANKRUPTCY WATCH LIST: WHAT THIS 102 YEAR OLD TEACHES US ABOUT RETAILING. This was the tale of Ingledew’s, a 102-year-old Vancouver shoe shop chain that declared bankruptcy. There is one most compelling of all the retail bankruptcy problems today. That is the consistent consumer practice of identifying the item in bricks-and-mortar stores and after that getting it online from other shops. There are others on the retail bankruptcy watch listing for the same factors. The Hudsons Bay Company news 2017 is cutting 2,000 positions.
Hudson Bay Company news 2017: Current status
The Bay is losing cash. After a difficult 3rd quarter 2016, HBC was seeking to cut expenses as the seller’s shares were at their lowest point yet since going public for a second time in 2012. CEO Jerry Storch claimed at that time that HBC is eager to focus on searching for “non-customer facing” effectiveness after the company reported a wider loss than expected.
At that time, the reported reasons for the losses were expenses being too high and a 4% dip in sales at stores open for greater than a year. Jerry Storch pointed out weak point in women’s clothing as well as high-end retail. Certainly, those initiatives alone were inadequate. The losses at HBC proceeded and now they are cutting jobs that are “customer facing”.
HBC revealed last Thursday it is getting rid of 2,000 employees throughout North America to help balance out different difficulties it’s dealing with within the retail sector. One of the central issues facing large retailers is that they must close stores with the arrival of on the internet shopping.
Established in 1670, HBC, is the oldest business in North America and one of the eight oldest companies in the world. It uses greater than 66,000 people. It runs greater than 480 stores under banners such as The Bay, Saks Fifth Avenue, Lord & Taylor, Gilt, and Saks Off 5th.
Hudson Bay Company news 2017: Hudson Bay earnings 1st quarter 2017
On June 8, 2017, HBC reported that the 1st quarter 2017 was a rough one. The retail clothing market remains challenging.HBC must adapt, beginning with a reorganization plan. Richard Baker, HBC’s Governor and Executive Chairman, said that the reorg plan will reshape HBC improving its costs.
His explanation of HBC’s restructuring will look not only at job cuts, but also its real estate assets and its diverse retail businesses.
Hudson Bay Company news 2017: Cost savings expected
The retail giant said the layoffs should save $350 million annually when the plan is fully implemented by end of financial 2018. A few of the layoffs were before introduced in February, the firm claimed.
Hudson Bay Company news 2017: It isn’t only HBC
This is the same tale that’s impacting a lot of big-box retailers today. Cash that used to be spent during a visit to The Bay, Sears and other big names like that; it’s going mainly to the web. Amazon is the main beneficiary, so you’re seeing these big-box retailers rushing to attempt and keep up. They’re reducing expenses to attempt to stem the losses. HBC’s stock is down 27% this year.
“As we have developed our plan, we have been determined to become not just a leaner company but also a better one” says Jerry Storch. Some industry experts have examined whether there is more value to leverage from HBC’s important realty profile. HBC has understood this to a degree with sale leaseback and joint venture arrangements.
In the case of Ingledew’s, the factors mentioned for the bankruptcy was that prices and financial obligation climbed due to:
- the lease prices paid to shopping mall property owners for rental fee;
- the amount of loan it took to open these gorgeous new stores; and
- the wages paid to get as well as maintain excellent people to be educated, deal with the consumer well and properly stand for the firm.
In the United States, there are annoying earnings records also from JC Penney, Macy’s, along with Nordstrom. This is against a backdrop of general distress in the retail market. Retailers are shutting shops and businesses applying for Chapter 11 in 2017. In the very first 4 months of 2017 filings have gone to a rate not seen since that the last recession.
Hudson Bay Company news 2017: What Moody’s has to say about Hudson Bay Company financial trouble
Twenty-two retailers in Moody’s portfolio are in severe financial trouble that might bring about bankruptcy. That’s 16% of the 148 firms in the financial company’s retail portfolio. This overshadows the level of seriously troubled retail firms that Moody’s reported during the Great Recession.
Hudson Bay Company news 2017: What about you?
Are you unhappy about the direction your debts are taking you? Do you or your company not have enough cash flow to make it through another season? Is the stress of too much debt affecting your health and life? Do you need a restructuring plan?
Call us now for a free consultation. The Ira Smith Team can help you sort through all the issues. We will create a plan to get you back on the road to financial health. Many times, we can avoid bankruptcy, using one of the various bankruptcy alternatives. Call us today so we can help you get your life back, Starting Over, Starting Now.
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