- Saks owner to open 20 stores in two years in European country
- Canada’s oldest company now sees a third of business in Europe
The Netherlands offers affluent customers in a small area, ideal conditions for Canadian department store chain Hudson’s Bay Co. to expand abroad, according to Chief Executive Officer Jerry Storch.
“The Netherlands is an incredibly attractive country, very affluent, very dense and it’s part of our long-term strategy to be a global department store company and to expand throughout the world and especially throughout Europe," Storch said Tuesday in an interview with Pamela Ritchie on Bloomberg TV Canada.
Canada’s oldest company announced earlier it plans to open as many as 20 stores in The Netherlands in the next two years, with the first stores opening in summer of 2017. The expansion is expected to create 2,500 store jobs and 2,500 construction jobs in key Dutch cities. About 300 million euros ($340 million) of capital will be put into the stores, with most of that amount coming from landlords, the Toronto-based retailer said in the statement.
“Most of the stores will be Hudson’s Bay department stores so we’re going to be, in essence, exporting the Hudson’s Bay department store concept from Canada to The Netherlands, and we’ll open a few Saks OFF 5TH off price stores as well," Storch said.
Hudson’s Bay, which owns U.S. luxury chain Saks Fifth Avenue and clothing store Lord & Taylor, entered Europe last year with its acquisition of Galeria Kaufhof to expand in Germany and Belgium. The Netherlands opportunity arose after a department store chain in that country went bankrupt, and Hudson’s Bay bought its properties, Storch said in the interview.
“Our main objective was to get fantastic high street locations in the best parts of The Netherlands where we can grow the Hudson’s Bay business," Storch said, calling some of the real estate "awesome."
Hudson’s Bay has a third of its business in Europe, about 20 percent in Canada and the rest in the U.S., Storch said, adding that such geographic diversity gives the company an advantage over other retailers who operate in just one country.
The company’s shares are trading at the lowest level since its initial public offering in November 2012. They fell 0.7 percent to C$14.60 at 3:41 p.m. in Toronto, down about 50 percent from a peak of C$29.42 in June 2015.
“We are doing fantastic in Canada," Storch said. "It’s clear that the U.S. is a little softer overall for retail right now, there’s something of a sluggishness in the apparel market in the United States."