Department store giant announces big job cuts as part of major restructuring
Hudson's Bay Co., whose banners include Saks Fifth Avenue and Lord & Taylor, has lowered the ax.
The retailer has made good on a plan, announced in February 2017, to reduce expenses by "rationalizing" its corporate functions and overhead across North America." On Thursday, Hudson's Bay announced a "transformation plan" that includes cutting approximately 2,000 positions as it looks to "flatten the organization by removing layers to make HBC more nimble and streamline the decision making process."
The company said it anticipates realizing more than $350 million in annual savings when the plan is fully implemented by the end of fiscal 2018, including the anticipated $75 million in savings previously announced in February
“Through bold, decisive actions we are creating a more agile organization that will align our cost base with the all-channel environment that we are operating in," said Jerry Storch, CEO, Hudson's Bay. "Our Transformation Plan, the result of our six-month operational review in North America, is designed to realign the company and position HBC as the retailer of the future. These changes will enable us to react faster to the ever-changing environment and evolving customer preferences to get ahead of industry developments."
The plan includes creating two distinct leadership teams, one focused on Hudson’s Bay and one dedicated to Lord & Taylor, to drive market-specific strategies. It also involves splitting digital into separate marketing and operations functions.
In addition, marketing support functions at HBC, including digital marketing, have been centralized to allow for cohesive all-channel marketing development across all of HBC’s banners. The new department, or "Marketing Center of Excellence," will operate like an in-house agency, supporting the execution of each banners’ distinct marketing strategy with comprehensive media, creative and marketing support. An interim head has been appointed while HBC searches for a chief marketing officer to lead the new function.
Over the next 12 months, the retailer expects to identify opportunities to leverage the size and scale of its business to generate significant savings. This includes aligning purchasing contracts across banners, decreasing the number of vendors, and consolidating purchases in areas like media, services and supply chain.
Here are some of the key changes:
•Alison Coville has been named president of Hudson’s Bay and will have end-to-end responsibility for the Canadian banners. She was most recently senior VP and general merchandise manager for DSG.
• Liz Rodbell, who has served as president of Hudson’s Bay and Lord & Taylor for the past three years, will continue in her role as president of Lord & Taylor. She will now be fully focused on leading that U.S. banner, together with a dedicated leadership team. The new streamlined organization, coupled with changes at the store operations level, will allow Lord & Taylor to accelerate all-channel strategies designed to drive the banner’s digital opportunities while operating its stores more efficiently, the company said.
• Digital marketing is now part of the company’s marketing center.
• Digital operations is now part of the new "Logistics and Supply Chain Center of Excellence," which is expected to increase efficiencies and leverage HBC’s scale to generate cost savings.
• Store operations across all of HBC’s North American banners will be centralized so that best practices and processes are shared across all stores.
• In-store sales coverage across the company's North American banners is being realigned to better serve its customers, including implementing additional training for its store-based associates in order to enhance customer interactions. Currently, these new programs have been successfully piloted in 10 stores, and HBC expects to roll out these changes to the rest of its store network in North America over the coming year.
The attached infographic outlines the company’s streamlined operations structure.
For expert commentary on Nordstrom’s announcement, click here.
No comments found