Bonnie Brooks is acting like time is going out of style.
In just three days last week, the CEO of the Bay toured eight remodelled department stores in British Columbia and launched The Room at the downtown Vancouver flagship, her chain’s second upscale shop with $7,000 cocktail dresses and other designer chic.
It’s part of her fast-paced refashioning of the fatigued Bay, even as she faces the hurdle of her parent, Hudson’s Bay Co., putting on hold its initial public offering this fall until tentatively next spring amid choppy stock markets. The delay puts added pressure on her to get her work done quickly, even without additional funds.
So far, she’s enjoying early signs of a turnaround, one Burberry handbag at a time. But as competition tightens, she’s racing to complete her three-phase plan, still only in its first stage after her three years at the helm.
“There are some programs that would probably accelerate a little faster” if more money were available, the Bay’s chief executive officer said, pointing to a third The Room in Montreal, which might be put off until 2013 from 2012.
“But my program is on a roll. We’re in good shape ... If we’re just concentrating on the things that [generate]immediate payback, we still have a lot of them to do, there’s no question.”
It’s the multimillion-dollar question in retail circles: Can the talented and energetic Ms. Brooks get enough done before burgeoning competition overtakes her efforts? Savvy U.S. chains, including the upscale Nordstrom, are hunting for store sites in Canada to set up shop. U.S. discounter Target Corp. with its cool quotient of affordable fashions and home-decor products, will open its first 135 or so stores here starting in March of 2013.
Her big challenge is to rev up the Bay stores’ productivity, which stood at roughly $165 sales per square foot of selling space before she arrived. She’s now striving to raise them to $200 and beyond, closer to top U.S. department-store levels.
To do that she has to fill the space in her massive stores with compelling offerings; one of her current ideas is to launch a specialty dry cleaner and spa services to draw more shoppers, along with food offerings. Another recent addition to the Toronto flagship: A members-only men’s grooming shop, including manicures and pedicures, with more than 1,000 customers signed up.
“It’s a daunting task to take over a very large company with a tremendous amount of capital involved every time she wants to make a change – she has to do it right,” said Jeffrey Berkowitz, president of retail specialist Aurora Realty Consultants, which helps bring foreign retailers to Canada. “She’s made great strides at trying to make sure the Bay doesn’t get lost in the shuffle ... Bit by bit they’re trying to woo in a new customer. Time will tell how that works.”
For now, the Bay’s cost-cutting and replacing 900 tired lines with 400 fresh ones (including Burberry and Coach) are doing their part in improving results, she said. With about $7-billion in annual sales, HBC, which also includes the U.S. Lord & Taylor, rang up a profit of about $450-million in 2010, before taxes, up from $330-million the year before, according to published reports.
Phase one of her plan entailed rolling out new brands and upgrading 80 of the 91 Bay stores, primarily in women’s fashion, footwear and men’s clothing. She launched the hot British fashion chain Topshop at the Bay this fall to attract a young, hip customer, with plans for a few large flagships and 40 to 50 in-store boutiques within five years. Last fall, the chain brought back e-commerce, with 20 per cent of inventory online today and all of it within a year.
The next two phases include even more brands and store facelifts, especially in cosmetics, accessories and jewellery.
She’s noticing a shift in attitude as businesses (including a specialty dry-cleaning firm) begin to approach her to launch in the Bay, rather than vice-versa. “I’m not saying that we’ve reached the tipping point but I think we’re getting close to it – the tipping point of brands wanting to be at the Bay,” she said.