What's going on?
According to reports out on Tuesday, North America’s oldest firm, Hudson’s Bay Company (HBC), has hired advisers in an attempt to revive the flagging fortunes of its iconic but long-suffering Lord & Taylor department stores.
What does this mean?
HBC’s stock has shed half its value in the past five years, as competition from the likes of Amazon has weighed on growth both at home and abroad. In 2017, its Lord & Taylor chain announced a partnership with Walmart as well as a deal to fill its Manhattan flagship location with an army of freewheeling WeWorkers – in what some thought could be an innovative way to broaden its mass appeal and see Lord & Taylor rise again.
Now, HBC has reportedly hired bankers and consultants to help identify ways to resurrect the brand, whose traditional flock consists of America’s upper middle class consumers. Three possible outcomes? Shuttering stores, overhauling strategy – or lots of acquisitions.
Why should I care?
For markets: US holiday sales may not have brought the sweet relief investors hoped for. (tweet this)
A robust US economy, well-timed shopping days between Thanksgiving and Christmas, booming ecommerce and better delivery options for customers helped usher in a strong 2017 holiday season – likely causing investors to buy shares of retailers and send up stock prices across the sector. Investors may have been a little hasty, however: ongoing systemic challenges and changes persist, and so does retailers’ quest for shareholder-friendly solutions.
The bigger picture: Retailers are still looking for ways to evolve in the face of heightened competition.
Lord & Taylor isn’t alone on the shelf. Macy’s stock price has fallen by a third in the last five years, with its recent acquisition of innovative retailer Story aimed at rejuvenating its in-store experience. Nordstrom lost a fifth of its value over the same period – it’s responded by acquiring Trunk Club’s personalization capabilities and launching Rack, which markets discounted brandwear to cost-conscious customers who might otherwise stray into the arms of the ecommerce specialists.