Reuters logo
UPDATE 2-Hudson's Bay CEO Storch abruptly steps down
October 20, 2017 / 8:49 PM / a month ago

UPDATE 2-Hudson's Bay CEO Storch abruptly steps down

(Updates with shareholder and retail industry comments, background)

By Solarina Ho and John Tilak

Oct 20 (Reuters) - The chief executive of Canadian retailer Hudson’s Bay Co, Gerald Storch, abruptly resigned on Friday, at a time when the department store company is in the middle of a strategic review and struggling to turn around sales.

Storch will step down effective Nov. 1 to return to his advisory firm Storch Advisors, Hudson’s Bay (HBC) said in a statement. It did not give further details on the reasons for his leaving.

Storch’s departure comes at a time when the company is under pressure from activist shareholder Jonathan Litt to take steps to improve stock performance. He has suggested various options to extract value out of the company’s $10 billion worth of real estate assets.

Reuters reported in August that HBC was planning to review its options, including going private.

“The CEO exit creates uncertainty around the company’s plan at a time when shareholders need more answers than questions,” said Joshua Varghese, a fund manager at CI Investments, HBC’s sixth-largest shareholder.

“It’s extremely abrupt. It’s further evidence that shareholders need to see a strategic plan,” he added.

Hudson’s Bay could not immediately be reached for comment.

Storch’s move follows a number of senior departures this year. Paul Beesley left his role as chief financial officer in May, Brian Pall, the long-time chief of real estate, left in June, while the head of international business, Don Watros, left in September.

The retailer, which owns the Saks Fifth Avenue and Lord & Taylor chains, reported a bigger-than-expected loss in its second quarter.

Storch, who previously headed Toys R Us, joined HBC as CEO in January 2015, just before HBC bought German department store Galeria Kaufhof.

“I have great confidence in the company and the executive leadership team’s ability to take the right actions to position HBC for leadership in the retail industry,” said Storch in the statement.

Former HBC CEO Richard Baker, now the executive chairman, will serve as the interim CEO while the company searches for a replacement for Storch, said the company.

Baker was “a hands-on chair,” said Maureen Atkinson, a senior partner at retail consultant JC Williams Group. He would likely “have his own ideas about how things should be run”, she added.

Reporting by Solarina Ho and John Tilak in Toronto, and John Benny in Bengaluru; editing by Shounak Dasgupta and Rosalba O'Brien

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below