Hudson's Bay Co. (TSE:HBC) is performing well in Canada but sales were hit hard in the United States. The stronger U.S. dollar and a decline in tourist spending are taking its toll on Saks and Saks Off Fifth.
Lack of tourists led to a 3.6 percent decline in same-store sales at Saks, reported Financial Post. And while Saks Off Fifth gained 2.8 percent in the quarter, it was still a modest growth compared to the last few outstanding quarters.
Other luxury retailers that posted a rough quarter heading into the holiday shopping season include Nordstrom and Tiffany, reported The Wall Street Journal. Again, the biggest attribution to this decline is the reduced number of tourists visiting and shopping, especially in gateway cities such as San Francisco and New York.
However, the brand's department store division Lord & Taylor increased 5.1 percent, which includes results from both Canadian and U.S. stores. It outperformed department stores such as Macy's and Kohl's, due in large part to strong Canadian sales. And earlier this month, Saks Fifth Avenue announced it would open four new Off 5th locations in Canada.
Weaker sales from the U.S. and Europe--due in large part to the Paris terror attacks--have significantly impacted Off 5th. "The stores along the Canadian border, the stores in Florida that a lot of Canadians visit — there is a significant impact on same-store sales arising from that," CFO Paul Beesley told Financial Post.
Over the summer, Hudson's Bay was ranked the fastest growing retailer in the United States in 2014, recording a year-over-year sales increase of 254 percent, with much of the growth stemming from its acquisition of Saks.
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