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The flagship Hudson Bay Company store is pictured in Toronto on Jan. 27, 2014.

Nathan Denette/The Canadian Press

Hudson’s Bay Co. has announced a new president to lead its namesake department store business in Canada.

Iain Nairn, most recently chief executive of Swedish stationery and gift retailer Kikki.K, will oversee the 89 Hudson’s Bay stores at a time when the department store business faces serious challenges that CEO Helena Foulkes has said are “largely self-inflicted.” Last month, the company reported a $226-million loss in its third quarter. The Bay stores are in the midst of a revamp, stripping 600 under-performing brands out of its merchandise, while adding 75 new ones. It has also been working to balance cost-cutting with improving customer service, making it easier for customers to navigate the stores and find staff to help them. While digital sales have been growing, overall sales have been in decline.

Iain Nairn is the new president of HBC's Canadian department store business.

Courtesy of manufacturer

“We’ve changed the merchandise edit,” Ms. Foulkes said in an interview on Monday. “We’re still in the early stages of that ... we have more work to do there in modernizing the mix.” While the retailer’s home and beauty businesses are doing well, more must be done in apparel, she said. “Iain is going to turbocharge all that work and brings his own new insights.”

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Before Kikki.K, Mr. Nairn spent a year and a half as CEO of Australian department store chain David Jones. Before that, he was CEO of Country Road Group for two years and Witchery for six years. The British-born executive also worked with retailer Laura Ashley in Britain, and has experience in Asia, Europe and South Africa.

In an interview, Mr. Nairn said he believes the work done to provide a “more focused” product assortment was the right move. He said he wants to use customer data – including from the company’s loyalty program and e-mail lists – to guide developments.

“The other key thing – as well as being a purveyor of global brands – is really focusing on Canadian brands,” he said. “Hudson’s Bay provides a great launchpad for local designers. That is something we should focus on, probably slightly more than we have in the past.”

Mr. Nairn joins the company at a pivotal time. Last week, a group led by HBC executive chairman Richard Baker raised its bid to take the company private, offering $11 a share and winning the approval of dissident shareholder Catalyst Capital Group Inc.

“If anything, being private gives Iain more freedom to move quickly and not worry about all the pressures of quarterly earnings, and do the things that really help us grow the business in the long run,” Ms. Foulkes said.

The appointment follows a search that took nearly a year: The previous Hudson’s Bay president, Alison Coville, left the company last February.

“We did not limit ourselves to department store people,” Ms. Foulkes said, although she added that Mr. Nairn’s experience at David Jones, where he turned around sales declines, would be helpful. “He’s dealt in a very challenging time and brought an iconic brand to the next level of performance. That’s exactly what we’re looking for at Hudson’s Bay.”

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The retailer, which was incorporated in 1670, will celebrate its 350th anniversary this year. The company will use the opportunity for brand marketing.

“We will get out there and remind the Canadian consumer what a great retailer Hudson’s Bay is,” he said. “We’ll be using every opportunity throughout the year to reinforce that point.”

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