Since taking the helm at Hudson’s Bay Co (HBC) just over a year ago, Helena Foulkes has been busy streamlining the department store operator’s business. On her watch, HBC has made big moves like shedding online flash site Gilt Groupe, selling a large stake in the company’s struggling European business to a rival, shelving plans for further Saks expansion in Canada, closing the Lord & Taylor flagship in Manhattan and selling it to WeWork and most recently, announcing it would close up to 20 Saks Off Fifth stores.
Instead, HBC is putting its energies into its best performing businesses—and those with most potential. “I’ve trying to get the organization to focus more,” Foulkes tells in a recent interview at HBC headquarters in New York City.
Before Foulkes became CEO in February 2018, the retailer had grown bloated with high debt and was chasing too many markets, all the while much of the business was stagnant or declining, notably Lord & Taylor and Saks Off Fifth. The bright spot has been Saks Fifth Avenue (for more on that turnaround, read Saks Takes Back Fifth Avenue) and to a lesser extent, the Hudson’s Bay chain in Canada. So Foulkes wants to apply the lessons learned at Saks, where comparable sales have been on a tear for two years now, to the other parts of the HBC business.
Below are excerpts from the interview with Foulkes, No. 46 on Fortune‘s Most Powerful Women in business list.
On what is behind the return to form of Saks Fifth Avenue, HBC’s biggest business:
“It’s a real focus on what the customer wants and where we can win in the marketplace. The danger for retailers is trying to be all things to all people. That moment of clarity where the customer was saying, ‘You don’t really stand for anything’ was very enlightening. I give the team credit for acting on this and really leaning into being more fashion forward.”
On the efforts to clean up HBC’s balance sheet and pay down debt, and selling off unproductive assets:
“The financial position that HBC is in today versus a year ago allows us a lot more ability to lean into Saks and invest for growth. That allows, as vendors are making choices, to be in a position where they know we’re in a position of strength.” (Moody’s and S&P recently upgraded HBC.)
“We all have limited time and resources, so let’s make sure we’re putting our energy where there’s real upside. The next dollar I invest has to be in the place with the most upside.”
On how the other HBC businesses can benefit from Saks’ lessons:
The lessons for other brands is clarity. At Lord & Taylor, we as a company had taken our eye off the ball of who our customer. We heard the world was going younger, so we tried to go younger… It’s basic: It’s knowing who you want to win with and being relevant and important to those customers.”
On Saks Off Fifth’s potential:
“Saks Off Fifth is operating in a great space in retail, a successful part of retail. Our issue is not so much, ‘Do we like the space we do?’ We do. We haven’t been executing well. We had been running it more like a small department store rather than an off-price business.”
On HBC’s potential:
“When you look at the retail landscape, not everyone is in the position that we are in in terms of having these brands that are special and important. So that gives me a feeling of great responsibility to the brands, to the people who work here, to our customers.”