HBC reduces earnings forecast, echoing U.S. retailing woes

Hudson’s Bay Company joined a rapidly growing list of North American department stores reporting poor holiday sales when it announced after markets closed on Monday that it was reducing its own sales targets for 2016.The announcement followed on the heels of news last week that same-store sales at U.S. department store Macy’s Inc. dropped 2.7 per cent in November and December over the same period in 2015.Macy’s, which also owns Bloomingdale’s, is in the process of closing 100 Macy’s stores in an effort to streamline its portfolio and find cost efficiencies. The store closures were announced in August.Meanwhile Neiman Marcus has pulled plans to list shares on a stock exchange, after stores reported an eight per cent decline in comparable sales on top of five straight quarters of declining comparable sales.“Do department stores have a future? Probably not in their current form,” said Maureen Atkinson, senior partner, J.C. Williams Group global retail advisors.Article Continued BelowCompared to competitors like Amazon, which is constantly innovating, department stores have been sluggish to adapt to digital commerce, she said.“Department stores can’t just go back to their old bag of tricks because they’re just not working. Obviously the logical step is to close stores, but you can only downsize so much,” said Atkinson.Hudson’s Bay Company stock tumbled as much as 13 per cent to $10.16 in Toronto on Tuesday, marking its biggest intraday decline since December 2015. The shares were trading at their lowest level since the company’s initial public offering in 2012 at $17 a share.