Drive for Results
Situation
The Hudson Bay Company had not been profitable over the course of the past several years. The company was comprised of a mass retailer, two department stores, home stores, and a general store. When you benchmark them against other conglomerates or their competitors by channel in the retail space, their private brand penetration was roughly 5.5% versus the competition at 22 to 30% depending on the channel. It is very difficult to compete on an EBITDA basis when you are comparing apples and oranges. For example in the department store channel, there was an opportunity to create and own a private label for men’s and for women’s apparel inclusive of denim and separates, as well as children’s.
Strategy and Execution
· Set goals to develop home-grown brands in high-performing categories for each store banner; held buyers accountable in monthly meetings for their private label brand penetration
· Drove newness and differentiation for each banner vs. their competition
· Reorganized product development teams by banner and by category based on expertise
· Implemented calendars, processes, and timelines based on product category instead of for an entire collection, saving production lead time
Results
· Private-label business grew collectively from 5.5% penetration to 13% in one year for the Hudson Bay Company
· Improved EBITDA for Hudson Bay by $30 million in the same time period, with EBITDA for Home Outfitters improving by $6 million alone
