Hudson's Bay Co. to cut 1,000 Canadian jobs
The Hudson's Bay Company will shed 5 per cent of its Canadian workforce, equal to about 1,000 layoffs, the retailer announced Wednesday.
The cuts, along with other restructuring plans, are expected to help save one of North America's oldest companies about $150 million in 2009 as retailers around the world deal with a deteriorating economic climate.
The layoffs, which will occur in both retail and administrative divisions in stores across the county, come as the former fur trading conglomerate attempts to rejuvenate a business which has faced growing competition from retailers like Wal-Mart.
The job cuts follow a $70-million initiative announced in January to streamline finances, IT and supply chains throughout the company's different retail brands, which include the Bay, Zellers, Home Outfitters and Fields stores.
The retailer, founded in 1670, employs about 60,000 people at 600 retail outlets across the country.
"We believe this new structure will allow us to better compete during these challenging economic times and ensure our long term success," said Hudson's Bay Trading Company chief executive officer Jeff Sherman.
Sherman, who once had a hand in running Victoria's Secret and Bloomingdales, took over control of the company in summer of 2008.
"These changes allow us to be more responsive to customer needs and expectations while at the same time aggressively implement our business strategy in order to grow sales and earnings."
According to John Williams, an analyst at the retail consulting firm JC Williams Group, the Bay's cuts come after sluggish sales over the holiday shopping season.
"Things were tough in November and December and it's going to remain that way for a period of time," Williams told The Canadian Press, adding that the first quarter is historically the worst time of year for retailers.
Combined with a global recession and increased competition from big box retailers, Williams said that a recovery for the Bay won't be easy.
"I don't think it will be a V-shaped turnaround either," said Williams. "There is too much going wrong in too many places in the economy."
BNN's Amanda Lang told CTV Newsnet Wednesday afternoon that many companies are cutting their workforces by about 5 per cent as the global economy spirals ever downward.
"It's right around the norm," Lang said, referring to the Bay's announced cuts.
"In the case of Hudson's Bay, they're doing it as part of a big restructuring," she added, referring to the IT and supply chain changes.
In 2006, South Carolina-based businessman Jerry Zucker purchased the Hudson's Bay Company and became its first American governor.
He died last summer and the company was sold to NRDC Equity Partners, a New York-based firm which also owns the Lord & Taylor chain of stores in the U.S.
The equity firm was initially planning to bring Lord & Taylor to Canada, but those plans have been scrapped, Lang said.
"They're putting that on hold ... they don't want to cannibalize their Hudson's Bay business."
With files from The Canadian Press