Hudson’s Bay Poaches Helena Foulkes From CVS
CVS Health’s (CVS) head of retail Helena Foulkes is heading from the drugstore aisles to upscale department stores and finally landing a CEO position.
The well-regarded executive, on whose watch CVS’ retail business bloomed into an $80 billion a year business, will take the reins of department store conglomerate Hudson’s Bay Company (HBC), whose chains include Saks Fifth Avenue and Lord & Taylor, on February 19. Foulkes, who has been at CVS since 1992, will replace Jerry Storch, who left HBC suddently in October.
Among her achievements at CVS, Foulkes led the initiative to eliminate tobacco products from the drugstore’s thousands of locations in 2014, oversaw its efforts to improve its beauty products and its digital business, recently announced a directive whereby CVS beauty product packaging would no longer include extreme retouches, and helped the company pivot to being seen as a health care company. (CVS recently clinched a deal to buy insurer Aetna (AET).)
At the same time, Foulkes struggled to improve the so-called front of store business at CVS’ now 10,000 locations, which go head-to-head with Walgreens (WBA) and Rite Aid (RAD) but also with behemoths like Target and Walmart.
Same-store sales of general merchandise at CVS have slipped for six quarters running amid intense competition and the struggle to get customers to come into stores to pick up prescriptions rather than use the drive through or have them delivered. Still, on her watch, CVS padded its lead as the biggest filler of drug prescriptions in the U.S. Foulkes is ranked by Fortune as the 12th among the most powerful women in business.
“She 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,” HBC Executive Chairman and interim CEO Richard Baker said in a statement.
Foulkes, long seen as a potential CEO at CVS, will have her hands full at HBC. In its most recent quarter, HBC, which runs Hudson’s Bay stores in Canada and the Netherlands and Kaufhof stores in Germany among its international businesses, reported comparable sales fall 3.2% stripping out exchange rate fluctuations. Saks Fifth Avenue eked out a tiny gain, but otherwise there were sharp drop-offs.
HBC is also in an uneasy truce with an activist investor who has pressured it to sell of its German business and even consider turning the Saks flagship in Manhattan into a hotel. (HBC’s MO has been to borrow money and buy a retail chain, then sell off parts of the real estate to pay down that debt.)
Still, the company has shown a willingness to challenge the regular way department stores do business. In October, the company announced a deal with WeWork in which it would sell the flagship Fifth Avenue department store of its Lord & Taylor chain in Manhattan for $850 million to the shared workspace company, and keep a much smaller space for the store. It also struck a deal with Walmart (WMT) to have that chain’s website host an online store for Lord & Taylor and prop up its modest online sales.
Though she is going to a much smaller chain, Foulkes said she is attracted to that sort of different approach to retail. “The future of retail will be defined by companies that think creatively about where the consumer and the world are headed,” Foulkes said in a statement.