HBC CEO Foulkes sold Lord & Taylor, exited Europe and paid down $1.5B (interview)

In a Fortune exit interview published March 23, 2020, Helena Foulkes recounts her two years as CEO of Hudson's Bay Co. She arrived in February 2018 after 25 years at CVS Health, most recently running its $80-billion-a-year pharmacy chain, intending "to have a real impact on a global business and lead a transformation." What she inherited was "a sprawling hodgepodge": Saks Fifth Avenue, Saks Off 5th and Lord & Taylor in the US, the namesake Canadian chain, struggling German retailer Kaufhof and a few European Hudson's Bay stores.

The company was hemorrhaging — comparable sales down 1.7% and a $646 million operating loss on $14.4 billion of revenue the fiscal year before she arrived — and debt-laden, what she calls "a retail Frankenstein's monster" of ill-advised acquisitions. "We made a lot of bold moves really fast," she says: HBC unloaded flash-sale operator Gilt Groupe only two years after buying it, sold the Lord & Taylor chain to Le Tote, exited Europe, shelved plans to expand Saks in Canada beyond its first three stores, and closed dozens of Saks Off 5th stores.

Those deals helped HBC pay down about $1.5 billion of debt, freeing room to invest in fundamentals — including continuing a $250 million renovation of Saks's Fifth Avenue flagship that reignited that store's sales. The aim, she says, was to "shore up the business so we could focus on the crown jewels": Hudson's Bay and Saks, the two chains she saw as best placed to survive the department-store storm.

A first-weeks listening tour — what to keep, what to change, what success looked like in three years — "unlocked a lot of information" and exposed an insular culture: chains shared little, digital didn't coordinate with stores. She instilled a "fail fast, fail cheap" ethos and Net Promoter Score discipline. Per Fortune, Saks regained its luster, Hudson's Bay turned around, Saks Off 5th returned to growth, and online sales growth hit 20.6% in her last full quarter from 6.8% in her first — progress that paved the way for the take-private, though her turnaround goal was unmet when she left.

About $1.5B of debt paid down; online sales growth went from 6.8% in her first full quarter to 20.6% in her last; Saks Off 5th returned to growth.

HBC was a debt-laden conglomerate losing $646 million a year, the product of acquisitions that never formed a coherent company.

Foulkes judged Hudson's Bay and Saks the only brands positioned to survive retail's department-store decline, so everything else was sold, closed or exited.

An insular culture — no accountability, no urgency, digital disconnected from stores — was as much a problem as the portfolio, and the listening tour surfaced it.

Paying down about $1.5 billion of debt bought the breathing room to keep investing in fundamentals like the Saks Fifth Avenue flagship renovation.

When everything is broken, spend time only on what is "big enough": prune misfit acquisitions for cash, concentrate on the crown-jewel brands, and learn fast with a first-weeks listening tour.

Foulkes left on March 13, 2020 as HBC went private, which she says let the company fix its remaining issues "outside the glare of the stock market's klieg lights." The interview notes how tenuous retail can be: Saks and Hudson's Bay tumbled in HBC's last quarter as a public company, and Saks — after holding its own against Nordstrom and Neiman Marcus for a while — has stumbled again more recently. Foulkes, who kept a professional executive coach for a decade, said she hoped her next role would be in the field or at least consumer-focused: "I loved being a CEO, and I'd do it again."