Parent of The Bay, Zellers helped by accounting change
By Furniture Today Staff -- Furniture Today, December 10, 2001
TORONTO — Hudson's Bay Co., parent of department stores The Bay and Zellers, said a change in accounting rules helped it eke out a small profit in the third quarter.
Total revenue in the quarter amounted to C$1.8 billion, a decrease of 0.5% over last year's comparable quarter. Net earnings were C$4.5 million, or 3 Canadian cents per share, compared with C$19.7 million, or 23 Canadian cents a share, in the same period of 2000. Both The Bay and Zellers reported a decline in operating profit.
George Heller, HBC president and chief executive officer, citing eroding consumer confidence and a challenging retail environment, including new competition from such U.S. retailers as Old Navy, Williams-Sonoma, Pottery Barn and Wal-Mart.
"The near-term realities are being ably managed through cost control, inventory and capital management, as well as efficiency gains," Heller said. "As the economy recovers, we fully expect to benefit from the fundamental improvements we've made."
For the first nine months, HBC reported net earnings of C$6.4 million, including a C$10.3 million net gain from an accounting change, compared to C$29.2 million last year.
The Bay is the eighth-ranked Canadian furniture retailer and has been expanding its furniture assortment and the number of stores that carry the category. The Bay also operates two free-standing furniture stores, in Hamilton, Ontario, and in Ottawa.
Zellers recently got back into furniture, albeit in a modest fashion, stressing promotionally priced ready-to-assemble product.
