HBC: we don't take any pride in the bottom line

On March 3, 2005 it was announced that Hudson’s Bay Company had been selected by the Canadian Olympic Committee to be the Official Outfitter & Clothier of Choice for Canadian Olympic athletes. Apparently, it was able to disrobe and oust internationally renown Roots Canada, whose funky and functionally clothes made our athletic team uniforms the envy of the world, by underbidding the competition and by promising to donate a significant amount to the training of Canadian Olympic athletes. I knew it was a big mistake then, and at the time, could only envision HBC delivering with an inferior product in athletic wear. I hadn’t really conceived of a scenario where our Olympians turn up at the 2008 games wearing their birthday suits unless it was by choice to combat the itch of the HBC signature cloth. According to this report from today’s Globe and Mail, I may have to rethink what is in the realm of the possible.

Hudson's Bay Co.'s financial performance continues to deteriorate, with a $41-million quarterly loss reported yesterday that prompted some analysts to wonder whether the Canadian retailing institution will ever get its house in order.

The country's oldest merchant, which has been considered to be a potential takeover target, attributed its poor first-quarter results to a number of unusual factors, including a restructuring charge, the closing of some of its Zellers stores and a computer systems snag. The company also pointed to higher costs and tighter profit margins, although it said the costs should be offset in the rest of the year. The systems problems, tied to selling furniture and appliances, will mostly be ironed out in the second quarter and ultimately help boost the bottom line by the end of the year, it said.

"All in all, the quarter was kind of mixed," George Heller, president and chief executive officer at HBC, told analysts during a conference call. "We don't take any pride in the bottom line..”.

Or put it in plain speak - HBC practically doubled its first quarter loss.