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Hudson's Bay: More store closings are possible

Canadian department store retailer Hudson's Bay Co., which just announced plans to shutter up to 10 Lord & Taylor stores, warned that store closures at its other brands are possible.

The retailer is looking at closing stores at its other brands, including Saks Fifth Avenue, Hudson's Bay and Galeria Kaufhof, Hudson's Bay CFO Edward Record told analysts on a June 5 call after the company reported a first-quarter net loss.

The department store operator is reviewing its assets and shedding where it thinks resources could be better allocated to serve its core department store operations, said Helena Foulkes, who started as CEO of the company Feb. 19.

"Everything's on the table," she said.

Foulkes did not provide a timeline for store closings or specifics on the number of stores across the various brands that it would aim to close.

"We're certainly working very hard to make decisions that drive profitability for the business, and we expect that as we make those changes, we'll share them with you," she said.

At the same time, Hudson's Bay announced June 5 that it would shutter up to 10 Lord & Taylor stores, including its flagship Fifth Avenue location — the property that the company is in the process of selling to real estate startup WeWork Cos. The other potential nine locations were not specified.

The decision winds back part of Hudson's Bay's announcement when it first disclosed the C$1.08 billion deal for the Lord & Taylor flagship property in October 2017. The department store operator said it reached an agreement to lease retail space within the Fifth Avenue location from WeWork. The sale of the Lord & Taylor flagship property was part of a slate of transactions with WeWork and private equity firm Rhône Capital, part of which closed in December 2017.

The company plans to close most of the stores in the first quarter of fiscal 2019, Record said during the analyst call, adding that the "timing is fluid."

"The decision to close up to 10 Lord & Taylor stores takes expense out of the business and allows us to focus our capital on the areas of the business with the most upside potential," Record said.

Hudson's Bay also announced plans to sell its flash-sale site Gilt to fashion e-commerce site Rue La La.