Will a CEO without department store experience transform Hudson’s Bay business?

Discussion
Photo: NRF
Feb 07, 2018
George Anderson

Helena Foulkes was instrumental in CVS’s decision in 2014 to walk away from $2 billion in annual tobacco sales as the drugstore reset itself as a provider of health services. Now, Ms. Foulkes finds herself in a business in which she has no previous experience, and her new employer — Hudson’s Bay Co. (HBC) — is touting her as the CEO the company needs to transform its fortunes.

Ms. Foulkes, who most recently served as executive vice president of CVS Health and president of CVS Pharmacy, will be responsible for overseeing strategy and global operations for all of HBC’s businesses, including its namesake chain, Galeria Kaufhof in Germany, Galeria INNO in Belgium, Lord & Taylor and Saks Fifth Avenue. She will join HBC on Feb. 19.

“Helena is a transformational leader who will invigorate the business with a new perspective as we position HBC for the future,” said Richard Baker, interim CEO and executive chairman of HBC. “Throughout her 25-year tenure in retail, she has a proven track record of making bold, strategic choices that, at their core, put the customer first and have proven enormously impactful to business success.”

Ms. Foulkes joins a business that has struggled to increase sales while dealing with a heavy debt load. In October, HBC sold its Lord & Taylor building in Manhattan as a means to reduce its debt. HBC, whose stock is sold on the Toronto Stock Exchange, has been pressured by an activist investor, Land & Buildings Investment Management, to take itself private. The investor believes that HBC is undervalued as publicly traded stock.

“HBC has an amazing portfolio of retail banners, valuable real estate and an innovative approach to M&A that give it the ability to win,” said Ms. Foulkes. “The future of retail will be defined by companies that think creatively about where the consumer and the world are headed. I look forward to working with this great team and listening deeply to them and to our partners to build upon strategies that capitalize on HBC’s physical and digital assets and deepen our core operating effectiveness.”

DISCUSSION QUESTIONS: Will Helena Foulkes be able to transform Hudson’s Bay Co.’s business? In what areas do you think she is most likely to focus her efforts?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"I think she’ll bring a fresh perspective that is not hindered by 'how we’ve always done things around here.'"
"Helen Foulkes is a great choice for Hudson’s Bay, as she is willing to take risks and is a proven transformational leader."
"“In the beginner’s mind are many possibilities, in the expert there are few.” Experience is overblown. "

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22 Comments on "Will a CEO without department store experience transform Hudson’s Bay business?"


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Neil Saunders
BrainTrust

No disrespect to Ms. Foulkes, but CVS’s retail standards and prowess are poor. The move into health services was smart, but the company’s failure to create a compelling proposition in growth areas like beauty and its lackluster approach to many other categories is lamentable. Even new CVS stores show very little imagination or flair.

Admittedly, CVS gets away with this because much of its business sits outside of traditional retail. It can also rely on essential purchases and prescriptions to drive footfall. Neither of these things is true at HBC. HBC needs core retail skills to thrive, and it needs them urgently.

HY Louis
Guest
10 months 11 days ago

Agreed. Sinking ship. Doesn’t matter who is at the steering wheel.

Paula Rosenblum
BrainTrust

I’m with you. Primarily because department stores are sorely in need of re-invention, and CVS hasn’t exactly re-invented itself. It just has bought its way along. HBC has already tried that … now it actually has to perform. Maybe she’ll surprise us and ask questions a department store veteran would not, but it’s a really complicated business. I have my doubts.

Joan Treistman
BrainTrust

Why not? She understands retail. She recognizes that retail is in transition. I think she’ll bring a fresh perspective that is not hindered by “how we’ve always done things around here.”

Cathy Hotka
BrainTrust

I’m with you. The whole segment needs some fresh thinking and original ideas. Let’s hope that Ms. Foulkes can revitalize not just HBC, but the department store ecosystem.

Dick Seesel
BrainTrust

The lack of department store background may be an asset, not a liability, in terms of looking at HBC with a fresh set of eyes. (The incoming CEO and president of Kohl’s came from Starbucks and Walgreens, respectively, rather than a more “traditional” background.) Ms. Foulkes is correct about the strength of her company’s nameplates (especially Saks) but the traditional department store business has some obvious headwinds. Perhaps her biggest opportunity is to develop a robust omnichannel strategy, given that HBC has been a laggard here.

Lyle Bunn (Ph.D. Hon)
Guest

The strong identity of the banner brands of Hudson’s Bay Company (North America’s longest standing retailer) offers a basis for growth into supplier relationships, demographic targeting, services and commerce. To focus on revenue growth versus the seductive areas of cost cutting or divesting of assets is the challenge to any new CEO.

Brandon Rael
BrainTrust

A fresh perspective is always needed, and Helena Foulkes’s new strategies may just be the spark to help spark the HBC banner’s businesses. A return to the retail fundamentals, merchandising, assortments and inventory optimization as well as a laser focus on the in-store and online shopping experience will be the key drivers of HBC’s resurgence.

Change is always good, especially in these very dynamic times.

Joy Chen
BrainTrust

Helena’s creative and transformational approach will breathe life back to these banners of retail. Since there is a portfolio of banners, she will likely determine the role of each. She will also access the talent on her team.

Lisa Goller
Guest

Helena Foulkes’ lack of department store experience could be exactly what Canada’s iconic retailer needs. Her history of consumer-centric strategy and digital prowess will make Hudson’s Bay Company more relevant and efficient. Streamlining supply chain processes will help the retailer keep up with consumer demand for speed. Foulkes also keeps an eye on the competition. CVS’ bold refusal to participate in “extreme Photoshopping” of beauty ads is one way Foulkes’ leadership differentiated the retailer and helped strengthen brand trust. She has what it takes to transform HBC.

Sara Mays
Guest

Ms. Foulkes has proven she is an innovative leader with a customer-centric focus. Providing a seamless experience between clicks and bricks will be a challenge but she plays the long game and in the end, she will succeed.

Jason Goldberg
BrainTrust
Lack of department store experience does NOT mean she is destined to be unsuccessful. Hubert Joly had no retail experience (much less consumer electronics retail) and yet he proved to be the exact right leader for Best Buy at a major inflection point in that retailer’s history. Department stores are facing a lot of headwinds. Apparel has eroded as a spending category for consumers, much of the real estate portfolio is seeing significantly curtailed traffic, consumers have less enthusiasm for the department store format overall and then of course HBC has unique debt challenges. Add it all up and it’s highly unlikely that bringing in an experienced department store leader to follow the traditional department store playbook would be successful. I certainly agree that CVS has its own market challenges and Ms. Foulkes didn’t single-handedly solve them there, but in fairness she did run one of the most successful elements of that business. All that being said, HBC has a ton of assets and there is no reason those assets can’t be leveraged to help… Read more »
Ken Cassar
BrainTrust
Ken Cassar
Vice President, Principal Analyst, Rakuten Intelligence
10 months 11 days ago

CVS’s decision to walk away from tobacco sales was one of the boldest, most forward-looking moves I’ve seen in years from a highly profitable, publicly-traded, category-leading retailer. If Ms. Foulkes had even a little bit to do with that decision, I like the hire. The department store needs bold new thinking now. Experience in the department store space is starting to seem like a liability.

Ian Percy
BrainTrust

“In the beginner’s mind are many possibilities, in the expert there are few.” Experience is overblown. Experience, by definition, is part of the past and very often is what prevents an organization from looking into the future. What HBC needs (as do most organizations) is wisdom and the ability to think in terms of possibilities. It seems that is why Ms. Foulkes was brought on board.

Her success is contingent on the WHOLE organization having the will, energy and commitment to think in new ways. Too often only a part of the organization welcomes new possibilities while other parts dig in refusing to break out of what they see as a safe zone. Without alignment focused on the highest possibilities, revitalization simply will not happen … at least not in a sustainable way.

Few retail entities have more of a legacy than Hudson’s Bay. Obsession with preserving legacy pretty well eliminates possibility. Hopefully she’ll be as brave as Radisson and des Groseilliers in taking HBC into new territory!

Jane Sarasohn-Kahn
Guest

It’s fascinating that health care organizations have been “importing” retail and consumer goods talent, and here we see retail going the other way. Ms. Foulkes has been a key force in trying to move CVS/pharmacy to CVS/health with the dropping of tobacco from stores and, most recently, delivering prescriptions to the curbside and peoples’ homes — taking a page out of Amazon Prime’s book in their own way. Ms. Foulkes brings a strong sense of consumer-centricity and corporate social responsibility to the job. From my health-and-wellness perch, I’m keen to see how she can translate this ethos to Hudson’s Bay portfolio of retailers.

Peter Luff
BrainTrust

I think it’s great that HBC are being brave, they are thinking outside the box by going with someone who is not a traditional department store veteran pedaling the same old ideas. Retail as we all know is changing drastically. Ms. Foulkes has already shown she can make big calls with the removal of tobacco from CVS stores. I look forward with interest to seeing her first big statements for HBC and how they are embraced internally. More power to her I say.

Nikki Barua
Guest
10 months 11 days ago

The challenges faced by HBC cannot be solved just by applying industry expertise. HBC has valuable assets, but requires a bold new vision and rapid innovation to gain relevance. Opportunities emerge from diverse perspectives, willingness to experiment, learning and adapting. Transforming HBC is not just about turning around the business, it’s also about igniting a culture of innovation. Leading a business through such a transformation requires clarity, courage and conviction. Ms. Foulkes has already demonstrated her ability to do so in her past role.

Ed Rosenbaum
BrainTrust

I find this to be a most interesting and diverse discussion. It reminds me of the “conflict” we are experiencing with a non politician running the largest and richest country in the world. I am not getting political and am not voicing my opinion. Just seems to be a similar story with a couple character changes.

Craig Sundstrom
Guest
I’m not sure I agree with the statement “in a business in which she has no previous experience.” She will still be in retail, after all. A bigger issue, perhaps, is that the ownership itself wasn’t “in retail” (except peripherally in retail real estate). At this point, as we’ve watched one department store operator after another slide downhill (BonTon filed Chapter 11 on Sunday) I don’t think any aware person would argue problems are specific to one company, or that someone just needs to come in and “turn things around.” Much like Indiana Jones, whoever, and whatever company we’re talking about, the search is for some miracle which may not even exist. That having been said, HBC has particular issues which should be addressed: The mix of mid-market Canadian and upscale (mostly US) operation is a strange mix which never made much sense to me, and I’ve yet to see how it’s working. Lord & Taylor became redundant after HBC purchased Saks, which is a much stronger banner nationally. So either they should be merged… Read more »
Ken Morris
BrainTrust
Department stores are one of the most challenging segments in retail, as much of their product mix are commodity products sold at many other stores and online marketplaces. It is easy for consumers to price compare these products online, which makes it difficult for department stores to compete. In addition, the customer journey and associated expectations continue to rapidly evolve — driving a major transformation in retail. Disruption and adaptation are changing the customer engagement model and blurring the lines among retailers, brands and wholesalers. Online pure-plays are opening brick-and-mortar stores and traditional retailers are experimenting with new store models: stores as showrooms, theatre, distribution centers or pop-ups. To enable the new customer experience and support its rapid evolution requires a different retail approach. Whatever most departments stores are doing – it isn’t working. They need radically different ideas and approaches. Helen Foulkes is a great choice for Hudson’s Bay, as she is willing to take risks and is a proven transformational leader. The two areas that she will likely impact the most is reshaping… Read more »
Brian Kelly
Guest
10 months 10 days ago

I’ve been involved in several turnarounds. Some worked and some didn’t. Some had plenty of retail experience and some had no retail experience. I too like the example of Herbert Joly, who I think is one of the few retail CEO heroes. Folkes term at CVS was distinguished and admired.

However, Ms. Foulkes is dealt a rotten hand. Department stores are doomed; consumer behavior has shifted across North America. Fashion is much more difficult to sort than electronics and HRC store portfolio is both too broad and deep. I am eager to see how Ms. Gass performs at Kohl’s; its early days.

Of course, both Lord, and Taylor knew: “retail ain’t for sissies!”

Shep Hyken
BrainTrust

A good CEO can understand the basics of almost any business. However understanding at a high level doesn’t mean understanding the nuances. That’s where good people surrounding the CEO comes in. Helena Foulkes has a strong background that needs to be adapted to Hudson Bay.

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Braintrust
"I think she’ll bring a fresh perspective that is not hindered by 'how we’ve always done things around here.'"
"Helen Foulkes is a great choice for Hudson’s Bay, as she is willing to take risks and is a proven transformational leader."
"“In the beginner’s mind are many possibilities, in the expert there are few.” Experience is overblown. "

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