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CVS executive hired to run Hudson's Bay
[NEW YORK] Hudson's Bay, the owner of Saks Fifth Avenue and Lord & Taylor, has hired a top executive from CVS Health in an effort to transform its struggling department store business.
Helena Foulkes, president of CVS' pharmacy division, was named chief executive of Hudson's Bay on Monday.
Her appointment came as Hudson's Bay, which is based in Toronto, also seeks ways to improve its digital strategy, as customers shift away from brick and mortar stores and shop more online.
"We have a great opportunity to run our businesses more profitably and Helena is the perfect person to help us accomplish that," Richard Baker, the executive chairman of Hudson's Bay, said in an interview.
At CVS, MS Foulkes ran the company's vast network of 9,700 retail stores and was credited with building its online prescription refill business.
Hudson's Bay operates a much smaller brick and mortar network with about 480 stores, including some buildings - like the flagship Saks Fifth Avenue headquarters in New York City - that are highly valuable.
In October, Hudson's Bay sold its iconic Lord & Taylor store on Fifth Avenue to a joint venture involving WeWork, a startup that leases shared office space.
That deal reflected the changing nature of the retail industry, where once-grand shopping spaces now have more value as offices or condominiums.
The WeWork sale also showed how Hudson's Bay, under the direction of Mr Baker, could capitalize on its real estate holdings, providing itself with cash that gives the company time to formulate a new retail strategy.
But that underlying retail business has been challenged. Sales dropped more than 4 per cent in the third quarter and company executives acknowledged that the results were disappointing. The company blamed recent layoffs for "operational challenges" in its digital business.
Ms Foulkes, who previously worked as an analyst at Goldman Sachs and at Tiffany & Co., said she will have to be innovative.
"The future is really going to be defined by companies that think creatively," Ms Foulkes said.
Mr Baker had been filling the role of chief executive since Gerald L. Storch stepped down from that role in October, shortly before the WeWork deal was announced. Storch said he left to return to his advisory firm, Storch Advisors.
Ms Foulkes is leaving CVS Health just as that company seeks to close its US$69 billion acquisition of health insurer Aetna. The deal would shake up the health care industry, but it's not clear whether federal regulators will approve the merger of the two giant companies.
In another sign of the stress on the retail industry, Bon-Ton Stores filed for bankruptcy on Monday, becoming the latest chain store to seek Chapter 11 protection. Bon-Ton, which operates 256 stores in 23 states in the Northeast, Midwest and Upper Plains, said it would continue operating while it worked to reorganize.
While many retailers reported a strong holiday season, Bon-Ton said its sales fell in November and December from a year earlier.