HBC shutters Home Outfitters
TORONTO – HBC will shutter its entire Home Outfitters chain before the end of the year, the publicly-held department store chain announced last week. It is also performing a “fleet review” of its 133-unit Saks OFF 5 TH retail network with an eye to closing as many as 20 locations.
In a statement, the company said these actions are part of a strategic plan to reduce costs, simplify its business and improve overall profitability.
The 37-unit Home Outfitters sells a broad assortment of home goods, ranging from small kitchen appliances and cutlery, bed and bath linens to decorative accessories as well as furniture and mattresses – primarily from Serta and Simmons. Each location averages about 34,000 square feet and are mostly located in suburban centres.
“Further streamlining our retail portfolio enables even greater focus on our businesses with the strongest growth opportunities. The divestiture of (online retailer) Gilt, rightsizing of Lord & Taylor, the recent merger of our European retail operations in Germany, and today’s announcement exemplify the bold strategic actions we are taking to set HBC up for long-term success,” HBC chief executive officer Helena Foulkes said in a statement.
“We know this news is difficult for our associates. We are grateful for their ongoing efforts to serve our customers and we will work to find opportunities within HBC for impacted team members where possible,” she added. Home Outfitters is believed to employ some 700 people.
Founded by HBC in 1999, Home Outfitters has been slowly shrinking over the past few years, having had 69 locations in 2014.
The company also noted most of the markets in which Home Outfitters operates are also served by Hudson’s Bay – its traditional department store arm – which offers a similar home goods product assortment, in addition to apparel and other personal goods. It also accepts Home Outfitters gift cards.
In its report, BNN Bloomberg cited retail expert Brynn Winegard who opined the shuttering of Home Outfitters is endemic of a retail industry struggling to maintain margins and foot traffic in an age where consumers are becoming more comfortable searching, comparing, and transacting online.
Winegard, a marketing consultant and professor at the University of Guelph, told the Canadian Press HBC needs to focus on having well-trained staff “who provide advice, guidance shoppers need and can’t Google themselves” and on creating a consumer experience goes beyond shopping to include things like eating.
“That usually requires real estate and a price point that warrants this extra experiential space,” she said, adding, “Home Outfitters does not service a target consumer willing to pay these higher prices, however.”
In its latest fiscal quarter, which ended this past December, HBC said despite an uptick in sales, its net loss reached $164 million or 69 cents per share, including discontinued operations.