It’s the most visible sign to date of what action CEO Helena Foulkes, who took on the hot seat in February, plans to do to get the Canadian retail group back on track. But there are other signs of change as well as Foulkes strips out layers of management, particularly in Europe, and installs three important new senior execs:
Bari Harlam, our new Chief Marketing Officer, is an experienced leader with expertise in customer loyalty and data driven marketing strategies. Her experience will be incredibly valuable as we work to reinvent the way we market and deliver unparalleled experiences to our customers across all of our channels.
In conjunction with this, we are realigning the digital operations and technology teams under one leader, Steve Gould. Steve is a seasoned technology leader with an ability to blend technical complexities with consumer friendly solution, furthering our commitment to delivering seamless experiences for our customers.
Finally, our new President of Lord & Taylor, Vanessa LeFebvre is a change agent with strong experience leading digitally focus strategy and a deep understanding of the customer.
She adds that the goal is greater customer focus:
Gaining a better understanding of the voice of the customer requires ongoing measurement, including metrics for measuring the perception of our customers across all banners. Access to timely feedback also plays a large role in how we improve accountability at HBC and the recent changes we’ve made to the leadership team and the structures we’ve put in place across the company were done with this in mind.
Marketing and digital operations are a great example of this and I see opportunity for these functions to dramatically improve processes that impact the end-to-end customer experience. Capitalizing on these opportunity starts with putting in the proper foundation in place and I believe that we now have the right leaders to bring our marketing and digital practices to the level required to succeed in today’s competitive landscape.
To do list
There’s plenty to address on the ‘to do’ list for the new management team. The group just reported a net loss of C$400 million for its first quarter ended 5 May , up from C$221 million a year ago.
A big issue remains the growth reported by digital. For the group as a whole, that’s at 7.7%, which is behind the likes of Macy’s or Nordstrom for comparison, although Foulkes pitches a different interpretation:
Digital sales have also remained strong, up double-digits, and Hudson’s Bay’s revamped online platform is expected to launch in the coming months. As the first step toward driving increased profitability at Lord & Taylor, we have announced plans to right-size the store network and will be looking closely at every component of the cost structure. With a new leader dedicated to evolving the experience and merchandised assortment, to best meet customer expectations and shopping preferences, we’re taking advantage of having a smaller footprint to rethink the model and focus on our digital opportunity.
An indicator of the way things may develop can be found at the Saks 5th Avenue brand, which Foulkes highlights as delivering overall growth of 6% year-on-year, in large part due to:
finding ways to enhance our customer experience by combining technology with a hands-on touch of an associate is a big opportunity for us. We are starting to see the benefits from investment in this area at Saks. Their clientele in technology allows in-store associates to access the power of Saks.com in all of their interaction, creating more personalized experience for customers.
The flagship Fifth Avenue store itself is being renovated at present, which Foulkes says has been “a bit of a drag on sales”, but it’s clear she sees the omni-channel work underway at Saks as a positive development:
I think that the performance overall is a function of both that end of the market doing quite well, but also the Saks teams really starting to fire on all cylinders and making investments in the consumer, in technology actually supports our associates and our customers and starting to integrate technology within in-store experience to really do unique things for our customers.
So, we're very happy that some of those investments are starting to pay-off, but I would also say, we see a lot more opportunity to really deliver a uniquely personalized experience for our customers and to capture share of wallet and really be very, very meaningful to that very important customer.
As to her overall vision for the future of Hudson’s Bay Company, Foulkes has a mission statement off-pat:
We're focused on culture and long-term profitability. So in addition to the financial metrics, we’re very focused on the voice of the customer and making sure that the changes we're making really enhance the customer experience, both in-stores and digitally, as well as the engagement of our associates, who are important to the service experience we give. We are focused on really engaging them and giving them the right tools, so that they can help us drive growth both in our stores and digitally.
The benefit of being the head of the new regime is that you can quite cheerfully admit to the failings of the old regime without any loss of face. The sell-off of Gilt ends an embarrassing chapter in the Hudson's Bay digital journey and should certainly be taken as a positive development. That said, there's an awful lot of work to be done to get the retailer onto a solid omni-channel footing. Less than 6 months into the job, it would be unfair to come to any conclusion as yet as to whether Foulkes has the strategy in place to make the course corrections needed. We'll return to this across the coming months.