A veteran U.S. pharmacy executive who has a track record of bolstering companies' performance will take the top job at struggling Hudson's Bay Co., which has been rocked by a fast-changing retail sector in the shift to online shopping.
Helena Foulkes, president of CVS Pharmacy, the drugstore division of CVS Health Corp., will start Feb. 19 in the role of chief executive officer of HBC, the first female CEO of Canada's oldest retailer.
HBC's chains include its namesake in Canada, Saks Fifth Avenue and Lord & Taylor in the United States and Galeria Kaufhof in Germany – the operations outside Canada racing to find ways to turn around their operations.
"HBC, like other department stores, needs to reinvent their business," said Neil Stern, senior partner at retail consultancy McMillanDoolittle LLP in Chicago. "I think she can be a change agent on the brand and proposition. Interesting that they went outside of the industry, which should bring fresh thinking. … Helena has presided over a pretty significant change within CVS."
Toronto-based HBC has been grappling with losses in an increasingly difficult retail landscape, which has been particularly tough for department stores as they compete with more nimble and tech-friendly rivals.
Last year, under previous CEO Gerald Storch, who left unexpectedly in November, HBC launched a transformation plan that included slashing 2,000 jobs across North America in a bid to save $350-million annually by the end of fiscal 2018.
The retailer has also invested in improving its online business – after some glitches – and worked to enhance the value of its potentially lucrative real estate holdings, which include its flagship Saks store in New York.
Ms. Foulkes, 53, said in an interview that the department-store and pharmacy industries "have very similar challenges. We are both going through a lot of changes. … Both of the industries, in order to win, require thinking about marrying physical stores with digital properties."
She said she has operated with the mantra that "we need to go big or go home."
Richard Baker, HBC's executive chairman, said Ms. Foulkes is "a transformational leader who will invigorate the business with a new perspective as we position HBC for the future."
He said that Ms. Foulkes, in her 25 years in retail, has a proven track record of making "bold, strategic choices that, at their core, put the customer first and have proven enormously impactful to business success."
Walter Loeb, a New York retail consultant and a former member of HBC's board of directors, said Ms. Foulkes has an impressive record of bringing change to CVS, including in the all-important digital and e-commerce areas.
"She will bring a different view to HBC," he said. "It could be a good move. You want somebody who is creative, inventive and different."
One of her last high-profile moves at CVS was vowing last month to stop significantly retouching images used in the retailer's beauty product advertising. Ms. Foulkes said there is a connection between unrealistic body images and bad health outcomes, especially in girls and young women – the chain's primary customers.
She said she played a key role in an array of CVS strategies, including repositioning the stores to focus more on health and beauty – adding "health" to the company name – and developing its loyalty program by using that of Canada's Shoppers Drug Mart as a model.
She was instrumental in a 2014 decision to stop selling tobacco products in CVS stores to match its health image.
She led a number of digital initiatives as well, among them introducing next-day delivery last fall of prescription drugs and same-day service in some big cities such as Manhattan.
Her initiative to introduce faster e-commerce deliveries reflects an awareness in the industry that Amazon.com Inc. may be preparing to invade the pharmacy sector, a move that could shake it up – as it has done to other sectors, including department stores.
The urgency for change at HBC was underscored late Sunday when ailing U.S. department-store retailer Bon-Ton Stores Inc. filed for bankruptcy protection. Bon-Ton is the largest retailer to file for bankruptcy so far this year, joining dozens of others that filed last year, including Toys "R" Us, Payless ShoeSource and Gymboree.
In Canada, Sears Canada Inc. filed for creditors' protection in June and has now closed all its stores here.
Ms. Foulkes "is facing an enormous challenge at HBC," Mr. Stern said. "Not only does she have to deal with an overall industry that is facing significant change, she is inheriting a chain that was created through multiple acquisitions. So there are differences in chain and focus and differences in geography that need to be accounted for."
Corinne Sandler, CEO of market researcher Fresh Intelligence, said HBC needs someone like Ms. Foulkes to "disrupt" the retailer. "She can make a big difference if they allow her to," Ms. Sandler said. "She is a force. They needed to go outside the box."