Hudson's Bay had a resurgence around the time of the 2010 Olympics, with lots of Canadian branding and an attempt to move upscale. However, when that faded, what remained? A large department store with high overhead, and products that were not outstanding but certainly cost more than their competitors.
I would go into one ever so often, but ultimately I left empty-handed, wondering: who is this store for? I make a decent salary but can't really justify spending that much money on a shirt that doesn't really fit or look any better than something I would get from another clothing store for half the price of less. At that price point, I'm really hoping for someone to measure me, help me find a shirt, and then send it for tailoring so I actually have something that fits. May as well just go to a smaller store for that sort of experience, no?
HBC probably needs to rebrand as a smaller boutique, let go of things like appliances and other products they can't compete with more specialized retailers / Amazon / etc on, and push further towards emphasizing the parts of brick-n-mortar retail that still make sense: the personalized experience, recommendations, evaluation of how something looks on you, helping you try things on, etc.
The real question is, what the hell do we do with all this gigantic retail space, especially in relatively newer malls?
Prior to COVID I would have said that retail space could be office space, but now? No idea. I feel it would be really hard to convert to residential, so I have no serious ideas. Maybe schools?
For many communities, churches are the community centers/libraries/cultural centers. They preform functions identical to the organizations you mentioned - although they do other things as well.
Regarding demand, your sources indirectly say over 100 million Americans attend church regularly (“43% of Americans”). That’s a big number.
Regardless, the issue isn’t just demand, but supply.
The “market” for churches is extremely local.
If large number of Filipinos arrive in San Francisco, their demand for churches won’t be met by an excess of Southern Baptist churches in Dallas.
I understand that separation of Church and State. But creating schools, immunities centers, etc. is a function NGO civil society groups.
Groups like that have historically helped create Churches, especially for immigrant groups whose demand isn’t met by “native” churches.
Many historically Catholic parishes were created with support from Episcopal parishes.
Not for religious reasons, but because they recognized that the German/Irish immigrants benefited from them.
That dynamic hasn’t gone away, even if only 100 million Americans attend church regularly.
It was one of those stores that had all the premium brands (vs Eaton's back in the day).
Those brands established their own store fronts, while HBC tried to continue to be all.
Massive prime retail spaces, floors of merchandise for nearly everything.
At crazy high prices (they had great promos with their scratch n save they discontinued long ago).
Now it's just a shop old people with money goto.
Or may be the only high-end retail space In small town mall where small-town rich people spend their money.
Break it up into small units and resell the commercial space to businesses and offices that can actually make money? This is the kind of thing real estate managers are great at so no worries. Some will rot but my bet is most will be resold and developed.
I think they were just holding on due to the inertia of older folks that were used to shopping there.
I think I bought luggage there once, but I avoided that place like the plague. Reminded me of all the worst of retail, all in one spot.
I worked there when I was an undergrad (many decades ago). It was right beside the elite Rosedale neighbourhood. I served a lot of well-known faces in my department including the at-the-time billionaire owner of the store, former and future prime ministers, and famous actors. That's not to say it was elitist, but the elite couldn't be bothered to go all the way to Simpson's or Eaton's so it was convenient for them.
Before the pandemic, when the huge mall a couple of blocks from me was frantically busy, I'd sometimes walk thru the HBC store. It was pretty much always an oasis of peace.
They have a 30+ year old system that runs on DOS. It takes forever to buy anything.
If you have a gift card, you should be prepared to wait 1h+ for them to figure it out.
Prices are not at all competitive, their products are awful. They deserve to die.
I bought a $220 sheet set there that the "expert" told me it fit larger beds and that would not shrink. I wash it from the box, and then when I try to put it on, the fitted sheet doesn't is like 2' from fitting.
I’ve had the same experience around gift cards, and was just baffled. Like, this isn’t a strange or uncommon operation, it shouldn’t take three employees to cypher it out!
One other funny thing is if there are two promotions you want to combine, and an employee tells you they can’t be combined - just go to another cash. 50/50 odds the second one will let you do it!
We had our wedding registry at HBC - some items we received three of while the website said nobody had purchased, others showed as purchased - by nobody? A strange experience all around.
We did a part of our wedding registry there 15 years ago and I was astounded to find they still had books and books of hand written stock information. A friend worked there in the early 2000s basically fixing Excel spreadsheets that functioned as their stock tracking. This was at a time when Amazon etc. was already killing it. Writing was on the wall. Too much inertia.
Retailers didn't ignore Amazon, they were just very bad at technology since they were never technology driven companies. They spent decades fighting each other in a very low margin business and were optimized for that. Walmart did the best but that was through buying out other companies and even they didn't do great.
They don't have to compete with Amazon on technology, they can instead offer better service, or a better curated selection of (actually fit-for-purpose) products, or better prices, or better discoverability.
But some retailers seem determined to be worse than Amazon in everything, which is quite the feat. It probably is a result from being locked into a race to the bottom against other brick-and-mortar retailers, as you mentioned.
Without good technology you cannot achieve any of the things you mentioned better than Amazon without spending so much money (on humans, etc.) that you lose anyway. Amazon's technology gives them higher margins and thus they can use that money on things like lower prices, better service, etc. Their other technologies allow them to do recommendations and other automatically curated approaches without spending money on humans to maintain everything.
edit: Seriously, retailers have something like 0.5-1.0% profit margin, it's abysmal, they don't have the leeway to compete with on anything that costs them more.
This is a great point, but I think in 2020 the stakes are a lot higher for offering "better curated selection of products", "better discoverability", and "better service". The first two, for any retailer, really mean either being very very niche, to the point where inventory variety has been reduced to tractability, or it means being data-driven and predictive. And that probably means being tech-savvy.
And that's a pretty good description of Canadian retail. Most Canadian retailers just charge what US mail-order retailers do, plus typical shipping and duties.
There are a lot of soft targets in Canadian retail. The Hudson's Bay Company is one of them.
I need wide shoes. I could not find a place to buy wide running shoes besides Amazon at the usual places. My typical shoe buying places did not have a way to search for wides online.
I admit that I didn't really check all that exhaustively, but past experience has taught me that other retailers besides Amazon are not worth the clicks.
Yeah - it's frustrating how bad Canadian retail is still. I had an experience a few years ago with Canadian Tire where I chose in-store pick-up for an online purchase. The people at the store looked at me like I was from Mars. They didn't have the item in stock, and the manager actually told me that
1. he couldn't refund me because it was two separate computer systems (a lawyer would have told him tough sh*t - you're still the same company), and
2. I should do a credit-card charge-back to get my money back!
It's been years since, and I'm trying them again now. I ordered a set of dumbbells yesterday and ... still no email to come pick up my in-stock dumbbells.
BTW - I have wide feet too. If you're looking for running shoes, ASICS is good (this is the brand I always wear), and I've heard New Balance is pretty wide too. I can't wear Nike or Reebok for this reason.
Ten years ago I tried to buy a blazer in Downtown Vancouver.
I could not find one larger than a size 38 without going to Mr. Big and Tall, where the blazers would fit my size 48 chest but had enough extra room around the waist to store a couple of toddlers.
I had the same experience with width of glasses frames, with shirts, and with any good that fell outside of a single standard deviation from the average.
There's a paper where researchers compare the "average" sizes for human factors to individual people and discover that people who fit all the averages are vanishingly rare. Almost everybody is outside a deviation for at least one characteristic. I wish I'd bookmarked it.
Canadian retailers just stock within the one deviation and shrug. I specifically went to the Bay for that blazer.
From talking with Canadians, are folks happy with that?
Target didn't stay very long in Canada.
It seems every store has a "Canadian alternative" that's just pricier and has less product. I always hear about cross border shopping being done in the US to bring back goods in Canada but never the other way around. Even for cars it seems the same car will sell for way much north of the border.
Target made two mistakes. The first was making a deal to lease all the former Zellers locations, which was too many to handle at the start. The second, was to rely on their US-based logistics software that wasn't capable of handling multi-country inventory and tracking (like different currencies).
I loved Target. As a single dad, I loved the variety of kids clothes they had. They still carried the brands that Zellers did but they had their own from the US too. I was so disappointed when I heard they were leaving. I didn’t believe it at first but sadly it turned out to be true.
You're a retailer with 0.5% profit margin, how do you rebuild your whole business model and technology philosophy without going bankrupt first due to the costs? Remember that your competitors are using their money to kill you short term throughout the whole time. Of course they refused to invest, they didn't have the money to invest with and the risk was too high to any individual retailer.
edit: Also, e-commerce was only 16% of retail sales pre-covid. And that took 30 years to achieve. So traditional retailers saw it more of a long term problem than something to worry about right now.
Why would brick and mortar retailers need to find through profit margins, but amazon didn't? If amazon could convince people to give them money and forego immediate profitability, I don't see why the same wouldn't be possible for e.g. hudson.com, (which is not as mighty as the amazon, but has more commerce flowing through it than the Amazon)
Why would an investor pay money for hudson's e-commerce bet (keeping in mind that their investment will grow proportionally to hudson's overall growth not the growth of their e-commerce division) versus just investing in a pure e-commerce company?
Just to add as well the point of a company isn't to survive forever but rather make a return on the investment. For a lot of these retailers it's somewhat inevitable e-commerce will take a large portion of their marketshare. The best move might just be to extract profit while they remain above water.
In 20+ years. An investor in a retail company would prefer stable guaranteed returns for the next 10 years rather than lower returns for the next 10 years with a chance of higher return afterwards.
Companies are not people, they do not act like people and their rational goals are not the same as those of people.
edit: And, btw, Walmart HAS invested untold billions into e-commerce. They spent $3.3 BILLION on Jet.com alone.
Same as any other business: you raise capital for technology improvements through secondary stock offerings or bond sales. There's a surplus of investment capital out there available to any company that can sell a good story to investors.
Swedish companies did this just fine for a much smaller market than the American and the margins here are no higher and the competition was also fierce. No, I think it has to do with the American retailers bring too big to be able to quickly adapt.
Typical retailers have around 20% to 40% gross margins and about 6% net margins (on average). Even grocery stores (the sector with the thinnest margins) do better than 0.5% at around 2% net margins on average.
Large retailers can easily afford to to build good technology. The problem for them is not one of financing, it's culture. Most retailers, even "luxury retailers", have a deeply engrained culture of being extremely frugal. I once worked servicing that sector and recall visiting a higher end jewelry retailer. The store area that customers can see was very posh and slick. But step into the back office and everything was dingy and run down. This sort of thing is a conscious decision on their part.
Most of these firms will NOT pay top dollar to hire the best talent even if they could afford it. Most do not understand software development even a little bit. Most do not understand the role of technology for anything other than record keeping (at best). But (usually) they're not run by idiots either. So when they recognize these issues and try to isolate the "online" retail from the rest of the firm (e.g. Walmart), it creates a substantial amount of friction and rivalry. I've seen it first hand and, sadly, there is no simple solution.
>It is unbelievable to me how little challenge Amazon has faced as all their competitors just quietly lie down and die.
The company best positioned to handle Amazon, Sears, was parted out and gutted by its chairman and CEO Eddie Lampert. Toys "R" Us had a working business model and were gutted by VC's. So I wouldn't say they were quietly laying down, they were actively raided for their accumulated wealth and this left them unable to compete.
Best Buy is probably best example of a company that figured out how to pivot and survive. They basically turned into consumer electronics consultants that tell people what to buy to solve their problem (at a gigantic markup). Amazon.com can't compete with that model as it's not built for the consumer that doesn't know what they want/need to solve a problem (or are afraid of knockoffs).
There was recently an article on HN [0] that really opened my eyes to just how well Best Buy has done with that model.
This section in particular:
> Based on their feedback, Joly (the new CEO):
> - fixed broken systems, like an internal search engine that gave bad data about which products were in stock;
> - restored a beloved employee discount program; and
> - invested heavily into regular employee training.
I would bet money that fixing the search engine cost in the order of <$100Ks of engineer time and led to $1M+ in revenue. That's why the whole argument of "well, the profit margins are tiny so that's why retailers are dying" doesn't hold water with me. Just like every company there are critical systems that are obviously broken and are relatively easy to fix but are not correctly prioritized.
If they are prioritized, they tend to have ripple effects through the rest of the company.
best buy has also greatly improved their selection in inventory. about 10 years ago when i was building a pc the best buy store by me in NJ would only have a couple options for RAM, hard drive, gpu, and they would generally be no-name or low end brands marked up.
fast forward to this year and when one of my ram modules died, i was able to get the specific model i needed next day pickup in store, and their return policy is excellent. they also have basically been the exclusive seller of nvidia 3070/3080/3090's in the US. really impressed by their turnaround
fixed broken systems, like an internal search engine that gave bad data about which products were in stock;
I doubt (with complete speculation) that this was just an engineering problem (ie, the tech was why the product inventory data was wrong).
Inventory management is the biggest competitive advantage retailers can have, and often when it's wrong and messy, a full rework is needed to implement best practices and change the operational processes of the business. The unsexy logistics part of the business is the real cash cow, once the demand question has been solved.
I'd be interested to learn more about what Best Buy did to rework their processes, but I doubt it will become public because operational improvements like this can be a real advantage over competitors.
I work with fast moving inventory. One big trick is easy, optimized handhelds. Any employee can quickly do shelf-count or tag strays which keeps the house-count tight. And simple means BPA workflow is very refined (eg: big iterate the UX six times in three mo on just one or two flows).
Optimizing where items are stored to facilitate ease of access while also not overwhelming an aisle is also key. fast moving merchandise can change across a year. besides the handhelds using light to indicate where an item is has benefits over some systems which rely on audio clues
>I'd be interested to learn more about what Best Buy did to rework their processes, but I doubt it will become public because operational improvements like this can be a real advantage over competitors.
It might be simpler than you think. I've noticed that Best Buy's product listings consistently offer more product information (weight, dimensions, model numbers, and especially UPC) than the counterparts at Amazon, Target, and Walmart. All searchable, too; Amazon has the data but a) as mentioned, doesn't always make it visible, and b) doesn't always make it searchable.
I would love someone knowledgeable to take examples like this (and counterexamples) and create some discourse on how to defend a company against private equity takeovers.
The business model of PE is to buy distressed assets cheap. You can look at a company’s financials and determine if they are cheap. The magic pixie dust of PE is to look at those financials, the state of the company and the sector, and determine if it’s something that will possibly offer a return.
What most people fail to recognize is that when PE is in the picture, the company is already circling the drain. If it was a sure thing to fix, then the company wouldn’t be cheap. Generally speaking, PE doesn’t kill a company: Management did, but PE is the triage doc with bloody hands. They make for a nice comic book villain, but it comes down to “don’t fuck up”
There’s another class of PE activity, which is “my company is only mildly fucked but I can’t fix it while answering to shareholders.” So PE helps the owner go private to fix it. Examples are Dell and TIBCO. I don’t care enough about the latter to even look, but I think we can agree that Dell isn’t being stripped by PE bandits.
I read the article and it seems to be a PR piece. It’s sort of like when a company asks a reporter to come in and take a look. It then tells them all the things they did and that made a difference.
It’s an article glorifying the CEO. Fake. The real reasons for their success or failure is much deeper.
Back 20 years ago I was working on a product that went into consumer electronics. The big deal back then was product development, including the first big prototype runs, had to be done before September and really beginning of August. The reason is that's when the buyers evaluated products and distributors then placed orders.
Amazon doesn't have buyers. Which worked out okay because they were under cutting the products the brick mortar stores buyers vetted. Except now 30-90% of the stuff on Amazon is crap. That's an opportunity for Best Buy.
Toys "R" Us also made the mistake of crawling into bed with Amazon rather than build out their own website for a couple years and let Amazon harvest all the toy sales data and then decided not to renew the contract between the two.
To be even fairer, it's not helping them in the COVID-19 era.
In my region, Target is dead last in maintaining inventory and their supply chain. I have given up on them completely for paper products, as they never had any for months and months and...I'm not even sure if they've ever gotten any by this point.
It's been a real eye-opener about the Goliaths among us, that however Target is organized, operationally, there's something about them that has absolutely failed over the past 9 months. The bigger they are, the harder they fall, but Walmart is their main competition and they've become, regrettably, my go-to for household supplies. Because they have some.
Apologies if this is irrelevant, I've been champing to spell out this rant for a long time.
Huh, is that why target.com is so bad? I can’t think of any other e-commerce site that will tell you that, sorry, you can’t order those two items in the same transaction because they use incompatible fulfillment systems.
The target.com partnership ended more than 9 years ago. That being said, the replacement for Amazon fulfillment seems to be a laundry list of older companies;
> Prior to the announcement, Target and Amazon had extended their partnership until 2011.[41] In January 2010, Target announced their vendor partners for the re-platforming project. These partners include Sapient, IBM, Oracle, Endeca, Autonomy, Sterling Commerce and Huge, among others.
Best Buy has become my go-to retailer for electronics and even some appliances. Just tonight I picked up an open-box samsung galaxy tablet from the store down the street from me. Discounted by nearly half, in like-new condition, and if there's anything wrong with it I can return it back to the store, instead of having to ship it back to an online retailer.
I have likewise been impressed with the blue-shirts in the stores. They seem generally on par with Microcenter employees nowadays, with more than enough technical knowledge to help me make buying decisions.
I would have thought Walmart was the company best positioned to handle Amazon. They already had stores and warehouses throughout the country. I would think they could have leveraged and expanded what they already had. Instead they have been very late to the game and don't seem to be trying very hard to compete.
It’s nitpicking but retailers like Toys ‘r US got killed by PE, not VC.
The VC model is invest in a ton of growth companies in the hope of getting a 100X winner.
The PE model is to buy stable cash flows using mostly debt. That works until the cash flows aren’t stable any more. That’s why so many PE funded retailers are going under.
Service Merchandise was also a (regional) giant that would have been very well positioned to compete with Amazon (their model was already warehouse-focused with "showrooms" ala the Ikea model, just somewhat more electronics/toys/consumer goods than furniture focused), but it too was raided and gutted (just before Sears and in some ways the test bed for what eventually happened to Sears).
Hudson's Bay has been on a long slow decline for the past 2 decades. Although their flagship stores have held on reasonably well for a while, their non-flagship stores were damn near empty in the mid-2000's.
It's a bit of a shame since for smaller town in Canada, the Bay is often an anchor store for a mall. There aren't great "department stores" left, so when the Bay goes away, smaller towns are going to be a bit stuck (outside of ordering online).
Most retailers actually try to get rid of their real estate. The ones that hold onto it are constantly harassed by their shareholders to either sell to a REIT or spin one off.
But are the shareholders demanding something reasonable? I've looked into this and can't find anything that isn't just a trick to make the books look better.
A basket of options is worth more than an option on a basket; that's not just accountancy. Shareholders would rather the business and the building were in separate pockets so that if one loses money they can walk away from it and keep everything from the other.
Reasonable is whatever you want it to be. Shareholders want the share price to go up, and they can make life difficult for the board and the management team. It's awful, but as a shareholder, once that real estate has been sold, the share price went up, and you've liquidated your position, do you really care what happens next?
Shovelling the real estate to a REIT does make the books better.
Pension plans will pay more money for real estate in a REIT than a Corp because pension plans don’t pay taxes, and REITs don’t either (when the recipient is a pension).
Sometimes the “sale” is a separate fund and they simply give each shareholder a REIT unit for every share they have.
Big corps with high family ownerships like these anyway because it helps isolate the RE from getting dragged down by the retail division. And it provides this diversification via tax-deferred spin-off.
Shareholders are not interested in 100 square feet of dirt. They're interested in a slice of the revenue generated by seeking rent on the dirt someone else is using.
Ownership provides insulation from cash flow problems. It seems like it's just a book trick and real estate speculation is so lucrative that any investor wants to optimize businesses against their best interest as long as they own real estate.
In the defense of the "spin off a REIT" crowd, a business with cash flow problems is making uneconomic use of commercially zoned land by keeping restauraunts nobody owns on it, and could make more money by either selling or renting the land to a more profitable competitor.
My personal retort to that would be some long-winded complaint about how America's cities deliberately mismanage land to inflate it's value, but radical political explanations don't make businesses profitable. If the land is going to be ridiculously expensive, you might as well try to make something off of it, eh?
That doesn't excuse the fact that most restauraunt REITs are nearly-transparent scams for well-connected shareholders to siphon off land from valuable businesses, though.
It's just that a lot of retail is now done at malls, and so they have to rent from the mall's owner as there are fewer and fewer 'stand-alone' locations that shoppers would be willing to make a separate trip to, especially in more suburban areas.
There are pros and cons to each approach:
> The big valuation gap is due to disagreements over how much of Hudson’s Bay’s prime real estate can be divested while keeping it operational. Selling off property raises cash but also makes it more financially burdensome for the company to rent the space for the stores it operates. As a result, it would likely close stores, and its retail footprint would begin to shrink.
[…]
> Sale lease-back arrangements in which retailers sell their properties and become tenants have become increasingly popular in the past few years as the downturn in brick-and-mortar retail brought about by the rise of internet shopping has put pressure on retailers to raise cash.
> However, some retailers resist them because they view the rent obligation as burdensome, a stance that often attracts investor criticism. Another department store operator, Macy’s Inc., for example, was pressured by hedge fund Starboard Value LP three years ago to do more to cash out on its real estate.
The largest single real estate transaction that I am aware of was the purchase of Prince Rupert's land by Canada from the Hudson's Bay Company in 1870. For comparison, it was roughly twice the size of the Louisiana Purchase.
(It was actually not exactly a sale, but close enough. Canada paid Hudson's Bay to surrender its charter to England, that then assigned the land, free of said charter, to Canada.)
The main store in downtown Vancouver, a full block on Georgia st. across from Microsoft and a couple of blocks away from where Amazon is building a massive office was sold a couple of years ago for close to 700 million. I suspect this is what allowed them to survive this long.
Crazy timing - they just closed the Downtown Bay for good a couple of weeks ago. Here's an interesting quote about what you're talking about:
An appraisal of the building, done last year by Cushman & Wakefield for the Hudson’s Bay Company, valued the nearly 100-year-old building at $0 if it were to be leased back to the company.
Cushman & Wakefield found with a little more than $91 million in upgrades, the building’s value would increase to $8 million if leased to a single tenant.
With a little more than $111 million in improvements that value would jump to just shy of $10.8 million if leased to multiple tenants.
I visited the Winnipeg store 2 years ago. It was a disaster, floors half empty, random half-completed construction in between displays, virtually no employees around. 100% different than the HBC in downtown Montreal.
> HBC said it paid its Bay Centre rent under protest.
Is there more to this? Does HBC have some sort of argument why they shouldn't be paying rent? I remember reading somewhere that anchor stores usually have clauses in their lease agreement that they don't have to pay if the mall didn't meet minimum traffic levels. Is this what's happening here?
edit:
That seems to be the case.
> In arguments that echo a similar case against another Toronto-area mall, HBC claims Coquitlam Centre has failed to maintain a “first class” shopping centre as stated in the lease.
>That includes not upgrading the HVAC system to reduce the transmission of COVID-19, improving pedestrian control, upgrading washrooms and increasing the number of people responsible for health and safety at the mall, claims HBC.
>HBC added that the landlord did not to provide “an environment that attracts substantial numbers of customers and encourages them to stay at the centre for an extended period of time” nor had it taken steps “to adequately market the shopping centre to respond to COVID-19.”
Hudson's Bay is really a strip mall operator, NRDC Equity Partners. They'd been buying up failed retailers for years. They also bought Macy's, Saks, Lord and Taylor, and a home improvement chain that was shut down. Hudson's Bay was the oldest buy and they kept that name. Up until the epidemic, they were doing well for a company in classic brick and mortar retail.
I would be sad to see them go, if only because of the exceptional Hudson Bay point blankets [1]. They are iconic and legitimately good. It is hard to find equal quality thick wool blankets. But if I am honest that is probably the only thing I've bought from them in the last decade.
I did some research a year ago and in terms of reliable quality Faribault (faribaultmill.com) is comparable. Not quite as old (only 1865), but by all accounts they still maintain the same quality product as ever. There's also Pendleton (pendleton-usa.com). I forgot why I chose Faribault over Pendleton for my purchase last year, but I did end up choosing Faribault, FWIW.
There are plenty of other quality wool blanket makers, but few if any in North America have maintained or even achieved the same impeccable reputations as these three.
They "owned" the unceded territory for a long time. Sort of the same way gangs "own" territory in the big cities. They also fought with rival gangs like the Nor'westers over expanding that territory.
Most large retailers spin their real estate into a REIT to convert the asset into cash. There is no advantage to the shareholders to lock their capital up in a non-revenue-generating asset.
The HBC has been coasting on it's reputation as "Canada's oldest corporation" for too long.
The selection is poor, everything is overpriced, and store layouts haven't changed since the 50s.
Remember that scene in Queen's Gambit where Harmon buys a dress at the department store? That's basically HBC except they've given HBC a new coat of paint and proclaimed it ready for the 21st century.
HBC was one of the prime places to do a wedding registry. They had nearly all the stereotypical registry items, but you had to go in and scan them. I tried using their online backend to add to a registry, and it is firmly stuck in the 90s, stopped working, and nobody bothered to fix it.
They do this weird thing where there are multiple counters scattered throughout the store, manned with helpful ladies to answer questions and ring out purchases, except they're always unmanned, except one (on the other side of the store you're standing in), and that one counter has 5 people in line, some who wish to do returns, which take extra time.
Their policy seems to be to sell their HBC card at every chance, and if someone decides to sign up, you will be stuck in line while they fill out the entire form. Remember, there's only one till open, and because they ask about the card right before payment, the session cannot be put on hold, in order to ring someone else in.
When I worked at Zellers in 2005, they had an ancient text-based GUI for their POS. It's fast if you know what you're doing, but nobody at HBC seems to know how to use it. Oh, and HBC still uses this system in 2020. Want to see a piece of history? Check it out.
I can't wait for HBC to die. It should've gone instead of Zellers. All this they're doing to try and defer rent payments is just the death throes of a once great corporation that decided they had it all figured out, and that nothing ever needed to change.
There's one nice thing about HBC, which is that they make nice mugs, I guess.
> They do this weird thing where there are multiple counters scattered throughout the store, manned with helpful ladies to answer questions and ring out purchases, except they're always unmanned, except one
That’s a classic department store pattern. Macy’s and Nordstrom also do this. And their counters are often empty as well.
I wonder why the pattern persists nowadays since it obviously only works when the stores have twice the staff that they currently do. I suppose it’s just a lack of funds or will to change the layout of the store.
The quality of many of their own brands is terrible as well. We were moving and needed a couch and bed quickly and the bay could deliver one reasonably fast. The couch cushions lost their loft in a few months and were covered in pills. Customer service offers no solutions. The bed came with bent slats thst couldn't support any weight and the upholstery was poorly affixes to the frame. It took almost 10 hours of phone calls to get them to take it back and another 5 hours for them to tell us the gift cards they sent us couldn't be used until we activated them in store. We ended up replacing the couch with one from Urban Barn that only cost 15% (regular price while the bay was a 40% off sale price) more and is much better quality. Everything with HBC is terribly mismanaged and I agree that it really needs to die.
As a fun side note, the CEO of HBC made more than the CEO of American Airlines! Yay for profit before long term business plans, and looting 350+ year companies
From IT point of view, they along with Canadian Tire still use mainframe - I remember 10 years ago Canadian tire had a billion item inventory, can't imagine how much its now.
I got to see Hudson Bay's org, at least the HBC Digital arm, from the inside when they acquired Gilt Groupe in 2016. It was an unmitigated mess, and the talent attrition was immediate. Management was chaos. They had told us that the acquisition was primarily for Gilt's tech and talent, but post acquisition they had zero clue what to do with us. Political infighting between HBC management and pushback from Gilt management that stayed created an environment where little got done. Existing HBC projects, though incredibly outdated, costly, and hard to maintain, were given priority. Proposals and work to improve existing HBC properties were quickly shot down by HBC staff. The indecision and political infighting doomed Gilt further, and they unloaded the property to Gilt's main competitor Rue La La two years later for a massive loss. Friends that were still around have told me that HBC lost over $100 million on the deal, and reporting backed that up [1].
This development and their continued decline does not surprise me in the least, based upon what I witnessed.
Stuff like this is both logical based on personal experience, and unfathomable.
There is a finite amount of knowledge required to properly run a retail store, and The Bay has been running for waaaay longer than needed to have solid processes.
Yes: new tech comes along, as do new opportunities, but at the end of the day the customers want the same thing: to believe in the brand, to get good quality merchandise, and to have a smooth experience doing it. Throw in the bonus of having Canada’s longest-running business, and the business itself could probably sustain (govt assistance included) simply by running it the same way it was run 100 years ago.
I'm not sure it's that easy. Retail in the UK has been going through turmoil over the last decade with many big companies cutting shops or even completely failing.
Across from my current residence is The Bay tower at Yonge and Bloor here in Toronto. for the past 6months+, the 100 foot illuminated sign at the top of the tower has been broken revealing bright white light at the chipped part, instead of the symbolic yellow of the logo. the brokenness is telling.
It's a click-bait title, though it is true they haven't been paying rent, or partial payments across the country. This is what happens when private equity buys up your business and sells off real estate assets to optimize the balance sheet.
It is one location and the 15 year lease expired over a month ago:
HBC signed a 15-year lease, expiring Oct. 26, 2020, with the predecessor of the current landlord for the store at 6950 North Island Highway, Dover Pointe’s court document said.
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[ 3.3 ms ] story [ 113 ms ] threadI would go into one ever so often, but ultimately I left empty-handed, wondering: who is this store for? I make a decent salary but can't really justify spending that much money on a shirt that doesn't really fit or look any better than something I would get from another clothing store for half the price of less. At that price point, I'm really hoping for someone to measure me, help me find a shirt, and then send it for tailoring so I actually have something that fits. May as well just go to a smaller store for that sort of experience, no?
HBC probably needs to rebrand as a smaller boutique, let go of things like appliances and other products they can't compete with more specialized retailers / Amazon / etc on, and push further towards emphasizing the parts of brick-n-mortar retail that still make sense: the personalized experience, recommendations, evaluation of how something looks on you, helping you try things on, etc.
The real question is, what the hell do we do with all this gigantic retail space, especially in relatively newer malls?
Living like Logan's Run could be just what we need to break out of the dull pandemic mood?
Mostly I just meant living in a mall. Maybe you'd just lose your lease when you hit 30?
https://www.bloomberg.com/news/articles/2020-06-30/a-case-fo...
https://livability.com/topics/love-where-you-live/retail-res...
http://readytoharvest.com/2019/05/18/the-decline-of-mainline...
https://www.pewforum.org/2019/10/17/in-u-s-decline-of-christ...
https://www.christianpost.com/news/1-in-5-churches-face-clos...
Regarding demand, your sources indirectly say over 100 million Americans attend church regularly (“43% of Americans”). That’s a big number.
Regardless, the issue isn’t just demand, but supply.
The “market” for churches is extremely local.
If large number of Filipinos arrive in San Francisco, their demand for churches won’t be met by an excess of Southern Baptist churches in Dallas.
I understand that separation of Church and State. But creating schools, immunities centers, etc. is a function NGO civil society groups.
Groups like that have historically helped create Churches, especially for immigrant groups whose demand isn’t met by “native” churches.
Many historically Catholic parishes were created with support from Episcopal parishes.
Not for religious reasons, but because they recognized that the German/Irish immigrants benefited from them.
That dynamic hasn’t gone away, even if only 100 million Americans attend church regularly.
Those brands established their own store fronts, while HBC tried to continue to be all.
Massive prime retail spaces, floors of merchandise for nearly everything. At crazy high prices (they had great promos with their scratch n save they discontinued long ago).
Now it's just a shop old people with money goto. Or may be the only high-end retail space In small town mall where small-town rich people spend their money.
Too bad. They had great blankets.
The big one at Bloor and Yonge has very nice bathrooms. There’s that.
It is unbelievable to me how little challenge Amazon has faced as all their competitors just quietly lie down and die.
If you have a gift card, you should be prepared to wait 1h+ for them to figure it out.
Prices are not at all competitive, their products are awful. They deserve to die.
I bought a $220 sheet set there that the "expert" told me it fit larger beds and that would not shrink. I wash it from the box, and then when I try to put it on, the fitted sheet doesn't is like 2' from fitting.
No refunds since I washed it. Complete BS.
One other funny thing is if there are two promotions you want to combine, and an employee tells you they can’t be combined - just go to another cash. 50/50 odds the second one will let you do it!
We had our wedding registry at HBC - some items we received three of while the website said nobody had purchased, others showed as purchased - by nobody? A strange experience all around.
Looks more like an AS/400 interface to me.
But some retailers seem determined to be worse than Amazon in everything, which is quite the feat. It probably is a result from being locked into a race to the bottom against other brick-and-mortar retailers, as you mentioned.
edit: Seriously, retailers have something like 0.5-1.0% profit margin, it's abysmal, they don't have the leeway to compete with on anything that costs them more.
At this point being bad at technology is just incompetence/laziness/refusal to invest.
There are a lot of soft targets in Canadian retail. The Hudson's Bay Company is one of them.
https://gaiser.io/amazon-is-winning-as-everyone-else-isnt-tr...
I need wide shoes. I could not find a place to buy wide running shoes besides Amazon at the usual places. My typical shoe buying places did not have a way to search for wides online.
I admit that I didn't really check all that exhaustively, but past experience has taught me that other retailers besides Amazon are not worth the clicks.
1. he couldn't refund me because it was two separate computer systems (a lawyer would have told him tough sh*t - you're still the same company), and
2. I should do a credit-card charge-back to get my money back!
It's been years since, and I'm trying them again now. I ordered a set of dumbbells yesterday and ... still no email to come pick up my in-stock dumbbells.
BTW - I have wide feet too. If you're looking for running shoes, ASICS is good (this is the brand I always wear), and I've heard New Balance is pretty wide too. I can't wear Nike or Reebok for this reason.
Canadian retail is still such a cluster-f*ck.
I could not find one larger than a size 38 without going to Mr. Big and Tall, where the blazers would fit my size 48 chest but had enough extra room around the waist to store a couple of toddlers.
I had the same experience with width of glasses frames, with shirts, and with any good that fell outside of a single standard deviation from the average.
There's a paper where researchers compare the "average" sizes for human factors to individual people and discover that people who fit all the averages are vanishingly rare. Almost everybody is outside a deviation for at least one characteristic. I wish I'd bookmarked it.
Canadian retailers just stock within the one deviation and shrug. I specifically went to the Bay for that blazer.
https://www.google.ca/amp/s/www.thestar.com/amp/news/insight...
Target didn't stay very long in Canada.
It seems every store has a "Canadian alternative" that's just pricier and has less product. I always hear about cross border shopping being done in the US to bring back goods in Canada but never the other way around. Even for cars it seems the same car will sell for way much north of the border.
edit: Also, e-commerce was only 16% of retail sales pre-covid. And that took 30 years to achieve. So traditional retailers saw it more of a long term problem than something to worry about right now.
For somebody like Walmart, 0.5% of $500B is $2.5B. That's more than a little outside of SF.
In 20+ years. An investor in a retail company would prefer stable guaranteed returns for the next 10 years rather than lower returns for the next 10 years with a chance of higher return afterwards.
Companies are not people, they do not act like people and their rational goals are not the same as those of people.
edit: And, btw, Walmart HAS invested untold billions into e-commerce. They spent $3.3 BILLION on Jet.com alone.
Large retailers can easily afford to to build good technology. The problem for them is not one of financing, it's culture. Most retailers, even "luxury retailers", have a deeply engrained culture of being extremely frugal. I once worked servicing that sector and recall visiting a higher end jewelry retailer. The store area that customers can see was very posh and slick. But step into the back office and everything was dingy and run down. This sort of thing is a conscious decision on their part.
Most of these firms will NOT pay top dollar to hire the best talent even if they could afford it. Most do not understand software development even a little bit. Most do not understand the role of technology for anything other than record keeping (at best). But (usually) they're not run by idiots either. So when they recognize these issues and try to isolate the "online" retail from the rest of the firm (e.g. Walmart), it creates a substantial amount of friction and rivalry. I've seen it first hand and, sadly, there is no simple solution.
The company best positioned to handle Amazon, Sears, was parted out and gutted by its chairman and CEO Eddie Lampert. Toys "R" Us had a working business model and were gutted by VC's. So I wouldn't say they were quietly laying down, they were actively raided for their accumulated wealth and this left them unable to compete.
Best Buy is probably best example of a company that figured out how to pivot and survive. They basically turned into consumer electronics consultants that tell people what to buy to solve their problem (at a gigantic markup). Amazon.com can't compete with that model as it's not built for the consumer that doesn't know what they want/need to solve a problem (or are afraid of knockoffs).
This section in particular:
> Based on their feedback, Joly (the new CEO):
> - fixed broken systems, like an internal search engine that gave bad data about which products were in stock;
> - restored a beloved employee discount program; and
> - invested heavily into regular employee training.
I would bet money that fixing the search engine cost in the order of <$100Ks of engineer time and led to $1M+ in revenue. That's why the whole argument of "well, the profit margins are tiny so that's why retailers are dying" doesn't hold water with me. Just like every company there are critical systems that are obviously broken and are relatively easy to fix but are not correctly prioritized.
If they are prioritized, they tend to have ripple effects through the rest of the company.
0 - https://www.inc.com/justin-bariso/amazon-almost-killed-best-...
fast forward to this year and when one of my ram modules died, i was able to get the specific model i needed next day pickup in store, and their return policy is excellent. they also have basically been the exclusive seller of nvidia 3070/3080/3090's in the US. really impressed by their turnaround
I doubt (with complete speculation) that this was just an engineering problem (ie, the tech was why the product inventory data was wrong).
Inventory management is the biggest competitive advantage retailers can have, and often when it's wrong and messy, a full rework is needed to implement best practices and change the operational processes of the business. The unsexy logistics part of the business is the real cash cow, once the demand question has been solved.
I'd be interested to learn more about what Best Buy did to rework their processes, but I doubt it will become public because operational improvements like this can be a real advantage over competitors.
It might be simpler than you think. I've noticed that Best Buy's product listings consistently offer more product information (weight, dimensions, model numbers, and especially UPC) than the counterparts at Amazon, Target, and Walmart. All searchable, too; Amazon has the data but a) as mentioned, doesn't always make it visible, and b) doesn't always make it searchable.
What most people fail to recognize is that when PE is in the picture, the company is already circling the drain. If it was a sure thing to fix, then the company wouldn’t be cheap. Generally speaking, PE doesn’t kill a company: Management did, but PE is the triage doc with bloody hands. They make for a nice comic book villain, but it comes down to “don’t fuck up”
There’s another class of PE activity, which is “my company is only mildly fucked but I can’t fix it while answering to shareholders.” So PE helps the owner go private to fix it. Examples are Dell and TIBCO. I don’t care enough about the latter to even look, but I think we can agree that Dell isn’t being stripped by PE bandits.
It’s an article glorifying the CEO. Fake. The real reasons for their success or failure is much deeper.
Amazon doesn't have buyers. Which worked out okay because they were under cutting the products the brick mortar stores buyers vetted. Except now 30-90% of the stuff on Amazon is crap. That's an opportunity for Best Buy.
In my region, Target is dead last in maintaining inventory and their supply chain. I have given up on them completely for paper products, as they never had any for months and months and...I'm not even sure if they've ever gotten any by this point.
It's been a real eye-opener about the Goliaths among us, that however Target is organized, operationally, there's something about them that has absolutely failed over the past 9 months. The bigger they are, the harder they fall, but Walmart is their main competition and they've become, regrettably, my go-to for household supplies. Because they have some.
Apologies if this is irrelevant, I've been champing to spell out this rant for a long time.
> Prior to the announcement, Target and Amazon had extended their partnership until 2011.[41] In January 2010, Target announced their vendor partners for the re-platforming project. These partners include Sapient, IBM, Oracle, Endeca, Autonomy, Sterling Commerce and Huge, among others.
I have likewise been impressed with the blue-shirts in the stores. They seem generally on par with Microcenter employees nowadays, with more than enough technical knowledge to help me make buying decisions.
Both are currently being sued due to their role in the downfall of the company.
The VC model is invest in a ton of growth companies in the hope of getting a 100X winner.
The PE model is to buy stable cash flows using mostly debt. That works until the cash flows aren’t stable any more. That’s why so many PE funded retailers are going under.
It's a bit of a shame since for smaller town in Canada, the Bay is often an anchor store for a mall. There aren't great "department stores" left, so when the Bay goes away, smaller towns are going to be a bit stuck (outside of ordering online).
Vroom & Dreesman, a Dutch HB equivalent, went bankrupt in the same shrinking market and after been robbed empty by a PE ( Bain IIRC ).
It was a strange move, a bit of we are losing money on every unit, let's make it up by volume. They were gone by 2019.
https://www.tricitynews.com/local-news/hudsons-bay-coquitlam...
Pension plans will pay more money for real estate in a REIT than a Corp because pension plans don’t pay taxes, and REITs don’t either (when the recipient is a pension).
Sometimes the “sale” is a separate fund and they simply give each shareholder a REIT unit for every share they have.
Big corps with high family ownerships like these anyway because it helps isolate the RE from getting dragged down by the retail division. And it provides this diversification via tax-deferred spin-off.
Shareholders are not interested in 100 square feet of dirt. They're interested in a slice of the revenue generated by seeking rent on the dirt someone else is using.
My personal retort to that would be some long-winded complaint about how America's cities deliberately mismanage land to inflate it's value, but radical political explanations don't make businesses profitable. If the land is going to be ridiculously expensive, you might as well try to make something off of it, eh?
That doesn't excuse the fact that most restauraunt REITs are nearly-transparent scams for well-connected shareholders to siphon off land from valuable businesses, though.
https://en.wikipedia.org/wiki/Rupert%27s_Land
They own plenty of real estate:
* https://www.retail-insider.com/retail-insider/2020/10/hudson...
It's just that a lot of retail is now done at malls, and so they have to rent from the mall's owner as there are fewer and fewer 'stand-alone' locations that shoppers would be willing to make a separate trip to, especially in more suburban areas.
There are pros and cons to each approach:
> The big valuation gap is due to disagreements over how much of Hudson’s Bay’s prime real estate can be divested while keeping it operational. Selling off property raises cash but also makes it more financially burdensome for the company to rent the space for the stores it operates. As a result, it would likely close stores, and its retail footprint would begin to shrink.
[…]
> Sale lease-back arrangements in which retailers sell their properties and become tenants have become increasingly popular in the past few years as the downturn in brick-and-mortar retail brought about by the rise of internet shopping has put pressure on retailers to raise cash.
> However, some retailers resist them because they view the rent obligation as burdensome, a stance that often attracts investor criticism. Another department store operator, Macy’s Inc., for example, was pressured by hedge fund Starboard Value LP three years ago to do more to cash out on its real estate.
* https://financialpost.com/news/retail-marketing/hudsons-bay-...
The largest single real estate transaction that I am aware of was the purchase of Prince Rupert's land by Canada from the Hudson's Bay Company in 1870. For comparison, it was roughly twice the size of the Louisiana Purchase.
(It was actually not exactly a sale, but close enough. Canada paid Hudson's Bay to surrender its charter to England, that then assigned the land, free of said charter, to Canada.)
An appraisal of the building, done last year by Cushman & Wakefield for the Hudson’s Bay Company, valued the nearly 100-year-old building at $0 if it were to be leased back to the company.
Cushman & Wakefield found with a little more than $91 million in upgrades, the building’s value would increase to $8 million if leased to a single tenant.
With a little more than $111 million in improvements that value would jump to just shy of $10.8 million if leased to multiple tenants.
https://globalnews.ca/news/7493539/downtown-winnipeg-hudsons...
Is there more to this? Does HBC have some sort of argument why they shouldn't be paying rent? I remember reading somewhere that anchor stores usually have clauses in their lease agreement that they don't have to pay if the mall didn't meet minimum traffic levels. Is this what's happening here?
edit:
That seems to be the case.
> In arguments that echo a similar case against another Toronto-area mall, HBC claims Coquitlam Centre has failed to maintain a “first class” shopping centre as stated in the lease.
>That includes not upgrading the HVAC system to reduce the transmission of COVID-19, improving pedestrian control, upgrading washrooms and increasing the number of people responsible for health and safety at the mall, claims HBC.
>HBC added that the landlord did not to provide “an environment that attracts substantial numbers of customers and encourages them to stay at the centre for an extended period of time” nor had it taken steps “to adequately market the shopping centre to respond to COVID-19.”
https://www.tricitynews.com/local-news/hudsons-bay-coquitlam...
> locked out by landlords
so
> should have lots of real estate
or not, it doesn't, at least not there.
1. https://en.wikipedia.org/wiki/Hudson%27s_Bay_point_blanket
There are plenty of other quality wool blanket makers, but few if any in North America have maintained or even achieved the same impeccable reputations as these three.
https://en.m.wikipedia.org/wiki/Rupert%27s_Land
The selection is poor, everything is overpriced, and store layouts haven't changed since the 50s.
Remember that scene in Queen's Gambit where Harmon buys a dress at the department store? That's basically HBC except they've given HBC a new coat of paint and proclaimed it ready for the 21st century.
HBC was one of the prime places to do a wedding registry. They had nearly all the stereotypical registry items, but you had to go in and scan them. I tried using their online backend to add to a registry, and it is firmly stuck in the 90s, stopped working, and nobody bothered to fix it.
They do this weird thing where there are multiple counters scattered throughout the store, manned with helpful ladies to answer questions and ring out purchases, except they're always unmanned, except one (on the other side of the store you're standing in), and that one counter has 5 people in line, some who wish to do returns, which take extra time.
Their policy seems to be to sell their HBC card at every chance, and if someone decides to sign up, you will be stuck in line while they fill out the entire form. Remember, there's only one till open, and because they ask about the card right before payment, the session cannot be put on hold, in order to ring someone else in.
When I worked at Zellers in 2005, they had an ancient text-based GUI for their POS. It's fast if you know what you're doing, but nobody at HBC seems to know how to use it. Oh, and HBC still uses this system in 2020. Want to see a piece of history? Check it out.
I can't wait for HBC to die. It should've gone instead of Zellers. All this they're doing to try and defer rent payments is just the death throes of a once great corporation that decided they had it all figured out, and that nothing ever needed to change.
There's one nice thing about HBC, which is that they make nice mugs, I guess.
That’s a classic department store pattern. Macy’s and Nordstrom also do this. And their counters are often empty as well.
I wonder why the pattern persists nowadays since it obviously only works when the stores have twice the staff that they currently do. I suppose it’s just a lack of funds or will to change the layout of the store.
This development and their continued decline does not surprise me in the least, based upon what I witnessed.
[1] https://www.marketwatch.com/story/rue-la-la-buys-online-flas...
There is a finite amount of knowledge required to properly run a retail store, and The Bay has been running for waaaay longer than needed to have solid processes. Yes: new tech comes along, as do new opportunities, but at the end of the day the customers want the same thing: to believe in the brand, to get good quality merchandise, and to have a smooth experience doing it. Throw in the bonus of having Canada’s longest-running business, and the business itself could probably sustain (govt assistance included) simply by running it the same way it was run 100 years ago.
That management is chaos is just ridiculous.
It is one location and the 15 year lease expired over a month ago:
HBC signed a 15-year lease, expiring Oct. 26, 2020, with the predecessor of the current landlord for the store at 6950 North Island Highway, Dover Pointe’s court document said.