Escalating tensions between China and Canada triggered by the arrest of Huawei Technologies Co.’s finance chief is having a dramatic impact on two of the world’s hottest apparel stocks.
Canada Goose Holdings Inc., the trendy maker of premium parkas, has tumbled almost 20 per cent over the past four days. At the same time, Bosideng International Holdings Ltd., a Hong Kong-based downy apparel maker, has jumped nearly 13 per cent to a five-year high.
The detention of Huawei’s Meng Wanzhou last week has affected Canadian companies, causing Canada Goose’s share price to slump, the official Weibo account of a website backed by state-run Global Times said Tuesday. Calls have gone out on the Weibo social-media platform to boycott Canadian brands, including Canada Goose.
“Canada detained Huawei’s CFO, while Canada Goose is from there,” said Linus Yip, Hong Kong-based strategist at First Shanghai Securities Ltd. “It is possible that some consumers would change their feelings over the brand and choose to buy other brands. Some may opt to buy domestic brands like Bosideng.”
Canada Goose is a high-profile target in part because its name so clearly announces its roots. Other Canadian brands with a strong presence in China, such as IMAX Corp. and Tim Hortons Inc., haven’t seen significant share moves or been singled out for boycotts.
As the world’s largest luxury market, China is playing an important role for brands including Canada Goose. The company, which is the second-best performer in Canada’s benchmark stock index this year, has set big goals for expansion in China. The brand took off there partly after celebrities including billionaire Jack Ma were photographed wearing the coats.
Bosideng, meanwhile, has seen its own success, rallying 138 per cent this year to become one of the best performing stocks on the Hang Seng Composite Index. The company has successfully reshaped its brand in the past year through collaborating with top-tier designers, launching high-profile fashion shows and targeting younger customers, said Liou Huei-Chen, analyst at KGI Hong Kong Ltd. Solid first-half results announced last month and recent cold weather are helping the shares, she said.
VANCOUVER — The head of Lululemon Athletica Inc. says the company has seen a strong response to an Edmonton pilot of its first loyalty program.
“The response was very strong, and exceeded our expectations,” said company CEO Calvin McDonald on an earnings conference call Thursday.
The annual loyalty program costs US$128 to join with the member receiving either a pair of pants or shorts designed for the program, as well as expedited shipping on e-commerce purchases and access to monthly sweat classes and curated events.
The company will continue piloting the program through the first half of next year with some expansions outside of Edmonton, said McDonald, who stepped into the CEO role in August.
“We have a few additional markets that we’re going to be launching in, and we’re very excited as we look forward to the ability to have a membership-based program where it’s driving loyalty, but guests are seeing value in this curation of services and content beyond just our product.”
The loyalty program experiment comes as the company also continues to expand its store base with the opening of 38 net new locations since the third quarter of last year. Locations include 14 in the U.S., 11 in Asia, seven in Europe, four in Canada, and two in Australia/New Zealand.
The added stores helped boost net revenue by 21 per cent to US$747.7 million in the third quarter. The net revenue was partially offset by a US$9.3 million loss on the foreign exchange rate and the closure of 48 of its Ivivva brand stores.
Net income surged 60 per cent to US$94.4 million, up from the US$58.9 million the year before.
The Vancouver-based apparel company said its earnings per diluted share amounted to 71 cents per share, compared to 43 cents per share in the third quarter of 2017.
According analysts polled by Thomson Reuters Eikon, Lululemon was expected to earn $92.5 million profit or 69 cents per share.
Meanwhile the company’s e-commerce efforts netted US$476.9 million in sales, compared to US$425.1 million the year before.
Loblaw Companies Ltd. is launching its new loyalty program across Canada, offering an assortment of perks for $99 a year in an attempt to convince more customers to shop exclusively with its massive grocery chain — creating what one senior executive called a “loyalty loop.”
The PC Insiders program, styled after the popular Amazon Prime (minus the streaming service), includes free “click and collect” grocery shopping, where customers order online and pickup at one of 600 designated locations, as well as free shipping on purchases from Loblaw’s Joe Fresh apparel brand and Shoppers Drug Mart.
The program — available at $9.99 a month or $99 a year — is now available to the 16 million members who currently use PC Optimum, its free rewards program.
“It’s not 16 million customers all at once,” said PC Financial President Barry Columb, who started PC Insiders and continues to oversee the program. “But if we go out in the next six months and we put 100,000 customers into the program, we would be very, very satisfied.”
The announcement Thursday comes after a year-long pilot ballooned to the point that Loblaw had to turn members away. When the pilot started last year, the plan was to open the program up to 5,000 hyper-loyal customers who already used Loblaws PC Optimum and the President’s Choice Financial Mastercard.
Instead, Loblaw added 25,000 members after media attention and word-of-mouth saw prospective members signing onto a waitlist by the thousands. Even after expanding to 25,000 members, 3,000 people were still on the waitlist.
“There’s always a moment when you think it’s not going to work,” Columb said. “That moment is always before launch.”
“But when you actually roll it out, and your expectation is to get 5,000 users on a pilot and you get 25,000 … you realize you’ve got something good here.”
The pilot saw members take to Loblaw’s new grocery pickup service, Columb said, with an average member using it 10-15 times during the year.
Along with free shipping and grocery pickup, PC Insiders members get 20 per cent back in reward points when they buy baby products and Loblaw store brands like PC Organics and Black Label, as well as online purchases on Joe Fresh clothes and Shoppers luxury beauty products.
The incentive on baby products seems strategic, said Stewart Samuel, program director at IGD Canada, since having children is often a “key tipping point” toward online grocery shopping.
Samuel called the grocer’s paid program a “first-to-market initiative in Canada.”
“It’s a great way to limit the amount of cross-shopping that customers may do in other retailers,” he said.
The program also comes with $99 travel credit at the Loblaw travel service and “a surprise home-delivered box” of PC products.
“I mean, that alone pays for your annual fee,” Columb said.
PC Insiders is the latest in a series of shakeups to Loblaws’ loyalty programs. Its current free rewards program, PC Optimum, was itself born earlier this year when Loblaw merged its PC Plus card with Shoppers Optimum.
But Columb denied that all the changes could confuse customers, pointing to the thousands who were quick to join the Insiders pilot program. The one issue during the year of testing, he said, was better ways to show plan members how much they were apparently saving. Members now have access to an improved online dashboard that gives daily updates, as well as updates on their receipts in-store.
“It’s all about creating that loyalty loop,” Columb said, “and driving customers back into the store, where they find value and convenience.”
Eddie Lampert offered to buy Sears Holdings Corp. out of bankruptcy in a bid to salvage the failing retail empire he has controlled for more than a decade.
The chairman of Sears, whose ESL Investments ranks as the biggest shareholder and creditor, outlined a $4.6 billion preliminary bid in documents released Thursday that could include a mix of cash, equity new loans and debt swaps. Lampert would take over the whole company, rather than just buying selected stores as originally planned, and preserve about 50,000 jobs, according to the documents.
It’s the latest in a long series of bailouts Lampert has provided for Sears that preceded its slide into bankruptcy this year. The new bid is designed to head off outright liquidation of Sears, which has struggled to get support from lenders and suppliers who aren’t sure that the iconic retailer can survive, and Lampert’s new bid may not quell those doubts.
“It’s a last-ditch effort,” said Farla Efros, president of HRC Retail Advisory. “They want to be able to hold onto any equity that they can actually hold onto, and it’s really about ego and saving face.”
The deal will hand Lampert more money and professional fees while the equity holders and lenders will see their investment evaporate, said Burt Flickinger, managing director of Strategic Resource Group, a retail-advisory firm.
“The longer Lampert stays, the more Sears and Kmart’s combined viability is impaired,” Flickinger said. “He’s trying to perpetuate himself almost as an undertaker to drain more blood out of the body and make more money as he’s doing it.”
The bid would be funded with about US$950 million from a new loan in addition to other debt, with some parts still being negotiated. Lampert, who holds about US$2.6 billion of Sears borrowings, would convert much of that stake into equity of the reorganized business. He’s also counting on the rollover of about US$271 million in cash collateral that supports an existing letter of credit facility, and he’s promising to assume US$1.1 billion of liabilities from gift cards and rewards programs.
“We believe that a future for Sears as a going concern is the only way to preserve tens of thousands of jobs and bring continued economic benefits to the many communities across the United States that are touched by Sears and Kmart stores,” ESL said in an emailed statement.
Lampert teamed up with hedge fund Cyrus Capital Partners this month to prepare a joint bid, Bloomberg News reported earlier. As for the new debt, Sears said it has various proposals from multiple potential asset-based lenders and is working with them on the arrangements.
The offer is contingent on ESL being released from liability related to any of its pre-bankruptcy transactions, according to the filing. The committee of unsecured creditors in the bankruptcy case has an ongoing investigation into “the possibility that ESL and other insiders may have exercised undue influence to siphon value away from the company on favourable terms,” a court filing states, adding that the 2015 deal with Seritage Growth Properties is especially concerning.
Dave Hopkinson remembers Nov. 1, 1994, quite well: it was his 24th birthday and his first day hawking season tickets for the Toronto Raptors, then a professional basketball expansion franchise in a diehard hockey town.
Hopkinson and 23 commission-hungry recruits sat in a room on the 14th floor of a building overlooking an arena construction site. Each was armed with a phone, desk and chair, and all competed to make a sale and ring the six-inch brass ship bell that their boss, Raptors founder, John Bitove, had mounted on the wall as a motivational tool.
The top four sellers were promised full-time jobs. The rest would be let go.
“Dave was determined, fearless and fun,” Bitove recently recalled. “And he was just a kid, in his early 20s, but he would never give up, which is one of the things I loved about him. He would cold call anyone. He would work the phone. He would work his personality.”
Hopkinson would keep ringing the bell and look over at Bitove’s desk afterwards with a big, aw-shucks-boss-I-did-it-again grin on his face, which drove everybody else in the room halfway nuts, but earned him a full-time sales position.
The entry level job was a toehold on the sports business ladder that he has kept climbing: from selling the Raptors to selling just about everything for Maple Leaf Sports & Entertainment Ltd. — owners of the Toronto Maple Leafs, Raptors, FC, Argonauts and more — including a 20-year, $800-million deal with the Bank of Nova Scotia to rename the rink formerly known as the Air Canada Centre.
The deal — the largest of its kind in North American major professional sports history — reverberated internationally. Hopkinson, long sought after by NHL and NBA teams but never sold on a move, became a hot international commodity.
An executive recruiter in Los Angeles called and, this past June, Hopkinson left MLSE to become the global head of partnerships at soccer giant Real Madrid, the third most valuable sports franchise on the planet, behind only the Dallas Cowboys and Manchester United (the Maple Leafs are not among the top 50).
Dave Hopkinson, the former COO of MLSE, has been drafted by soccer juggernaut Real Madrid to market the Spanish team abroad becoming global head of partnerships.
The move to Europe means Hopkinson has to apply the skills he honed at MLSE over two decades to a new continent, while also bringing some of the Old World back home. One of his chief mandates: selling an iconic Spanish club, not just to the true believers, but to the soccer holdouts in North America and China.
“With Real Madrid, Hoppy has stepped up to a whole new level that we simply don’t play at in this country,” said Brian Burke, a friend and former colleague at MLSE. “He is in the penthouse suite in terms of working for a professional sports team. Hoppy is a heavyweight.”
Hopkinson, known as Hoppy since Grade 7, was raised in Toronto, had only ever worked in Toronto and certainly wasn’t expecting a call from Real Madrid. He didn’t even speak a lick of Spanish. But Real Madrid was “Real Madrid,” he said, “ a magical opportunity,” a professional roll of the dice too good to pass up.
The new hire was in the bathroom of his new home in Madrid on a recent November evening, filling the tub after picking up his eldest of two daughters from dance class — a mundane, dad-at-home moment in what has been a whirlwind few months.
“I’ve already bumped into a couple of pointy objects around the office and stepped on some landmines, but I’ve also had some small wins,” Hopkinson said. “I sort of sympathize with what it is going to take to be successful here, and how to be successful around here.”
Real Madrid is valued at more than US$4 billion by Forbes magazine and generated over $1 billion in revenue in 2017, according to Deloitte UK’s annual Football Money League report. Almost 50 per cent of revenues came from merchandising and sponsorship deals. (By comparison, the Leafs, hockey’s second most valuable team next to the New York Rangers, are worth US$1.45 billion and had US$232 million in revenue during the 2017-18 season, according to Forbes.com.)
Money, though, isn’t necessarily the most appealing business aspect of Real Madrid. Part of what sold Hopkinson on the move was the team’s ownership structure. Instead of being lorded over by an egomaniac billionaire or some soulless profit-driven-corporate entity, the 116-year-old club, much like the NFL’s Green Bay Packers, is owned by its fans, about 93,000 community members known as “socios,” who each pay a $185 annual fee.
Many socios have been members for more than 50 years. Collectively, they wield a corporate hammer, electing the team president and board of directors, approving annual budgets and disciplining wayward bosses who stray from the community’s wishes.
Steven Mandis, who spent parts of two years interviewing Real Madrid executives, players past and present and frontline employees for his 2016 book, the Real Madrid Way, believes “community values” and culture, two airy-fairy and hard to define things, are what underpin the franchise’s enviable success, on and off the field.
“It starts with Real Madrid getting the world’s best players that match the community’s values — to play an attacking beautiful style of soccer with class, to win championships and capture the imagination and inspire the current and potential global audience,” the former Goldman Sachs Group Inc. banker tuned business author/academic wrote in his book. “Since Real Madrid’s values are inclusive and universal, appealing to a global audience of all ages, the community grows globally.”
A fan waits the start of a Real Madrid match. The football club has a unique corporate structure that some argue adds to its global appeal.
Mandis’ belief is both elementary and revolutionary. Sports fans are inherently tribal, soccer fans perhaps the most rabidly so, which occasionally results in hooliganism and pitched street battles between rival supporters. But Real Madrid’s tribe isn’t just shelling out for tickets and merchandise, or throwing the odd knuckle or two, it guides the club’s direction.
The results are telling: Real Madrid wins — a lot. It is the three-time defending UEFA Champions League winners and has captured a record 33 Spanish domestic league titles since 1932. Its excellence and fan involvement boosts annual revenues, enabling it to cherry-pick global stars, such as Cristiano Ronaldo (recently decamped for Juventus in Italy), which begets more winning, further accelerating the growth of the international fan base and the crush of sponsors worldwide clamouring to get a piece of the action.
Which is where the guy from Toronto comes in.
Hopkinson understands how flaky talk of “values” sounds, especially to a North American sports audience, and especially around his hometown, where the greed of former Leafs owner Harold Ballard scarred a generation of hockey fans, and a pint at Scotiabank Arena sells for $12 a pop. But after three months in Madrid in a job he parachuted into in part to walk the tightrope between taking a storied franchise in some new business directions and observing its old traditions, he has bought in.
He is taking Spanish lessons, working with a language app and sees Real Madrid’s values reflected in everything from the tenure of its employees — people get hired and they don’t leave — to the tiniest of personal touches. For example, sending out company wide emails to announce an employee celebrating a birth or mourning a family death, regardless of corporate rank.
Dave Hopkinson with his family at the Real Madrid field.
“I don’t see these values articulated anywhere — there is not some plaque in the lobby saying, “This is our way,” he said. “But it is something that is understood around here; it’s palpable.”
Of course, as a sales guy, Hopkinson wakes up every day thinking about the value of money and how he can squeeze more revenue for Real Madrid out of a globalized sports industry.
“Dave has no problem putting a big number on the table and justifying it,” said Brian Cooper, chief executive of MKTG, a Toronto-based marketing/sponsorship company that represented Scotiabank in the MLSE naming rights deal.
A lifetime ago, Cooper was a Raptors executive when Hoppy was a “ticket sales grunt.” In many ways, Cooper said, Hopkinson has grown by bounds, but in others he is the same kid with the easy smile that he was from the start: smart, well-prepared, relentless, quick to remember a name or a fact, keen to network and able to make everybody feel as though they are part of the team.
“Dave’s team at MLSE would do a tremendous amount of work up front on who you are and what your needs are — and who your target audience is,” he said. “And he is going to bring that sophistication to the Real Madrid brand.”
Hopkinson, like almost every executive in every industry everywhere, sees Real Madrid’s greatest potential for growth in China and the United States.
“Despite the fact that football is the world’s most popular game, it is underdeveloped in the two biggest markets,” he said.
Real Madrid already has an office in Beijing, and will open one in the U.S. sometime before U.S.-Canada-Mexico host the 2026 World Cup.
Hopkinson gives a purely imagined example of how Real Madrid might crack into China’s corporate coffers. Take a hypothetical Chinese domestic brand — a toque, an electronic gizmo, a you-name-it — that is manufactured in China and, as with many such brands, nobody in the West has ever heard of.
Enter Real Madrid, sports behemoth, with more than 200 million followers on social media (Facebook, Twitter, Instagram), only about three per cent of whom actually reside in Spain, plus a Champions League final television audience of around 165 million viewers annually. (The average Super Bowl draws about 100 million viewers; the Cowboys count around 13 million followers across social media platforms.)
Marry all those eyeballs, tweets and likes to a Chinese toque on an imagined Real Madrid player’s noggin and that brand suddenly goes from having zero international profile to the big leagues. The big leagues, in theory, give a company licence to charge a premium for its goods associated with Real Madrid’s superstars and, naturally, give Real Madrid licence to charge the company a fortune to be associated with its trusted, winning narrative.
“If you look at the statistics of the value of Real Madrid, plus their numbers in terms of fandom and fan behaviours, then you start to realize the magnitude of what they are talking about,” said Cheri Bradish, a sports marketing professor at Ryerson University in Toronto.
Although consumers have never been more adept at ignoring advertising messages — the average human’s capacity to delete or ignore pop-up ads, videos, television commercials and email-marketing blasts is by now well honed — getting attention from existing fans isn’t a problem for Real Madrid.
The team’s fans aren’t looking for less, they always want more, which has led to some inventive new twists in corporate partnering. For example, every Real Madrid player gets presented with a new Audi (other major sponsors include Adidas, Emirates, Hugo Boss and Nivea Men) at the start of the season, an event sparking much fan speculation: What car is player X going to pick? How about player Y? What does the car say about the player who drives it?
The Audi draw becomes a media/social media story, well covered by the club’s website, with the vehicles as props and the players as characters. Players who subsequently elect to drive a vehicle other than an Audi to the team’s training facility must park in a remote lot surrounded by a high hedge. The Audi drivers’ park in high visibility spots close to the front door.
“Does everybody care about what kind of car the players drive? No,” Hopkinson said. “But lots of people care about Luka Modric, Gareth Bale and Real Madrid.”
What he means is: soccer-loving automotive geeks get what they want, while the greater mass of Real Madrid fans get something, too — a glimpse of their heroes doing something other than playing soccer. Audi, of course, gets a bunch of famous athletes driving their cars to work every day.
But getting attention in the U.S. is different. Football — soccer on this continent — has been trying to conquer the U.S. ever since Pelé and the New York Cosmos burst onto the scene in the 1970s. Major League Soccer has 23 teams, including three in Canada, and its fans are enthusiastic, but the sports pecking order list still reads: NFL, MLB, NBA, NHL … MLS.
Dan Mason, a sports professor at the University of Alberta, argues pecking order isn’t what it is important. Real Madrid doesn’t need to convert Joe NFL Fan. It simply has to convince U.S. multinationals interested in boosting their profile overseas to harness the Real Madrid brand power to do it for them.
Real Madrid isn’t exactly a non-entity in the U.S. market. Fox’s English and Spanish broadcasts of Real Madrid’s 4-1 victory over Juventus in the 2017 UEFA title game drew a combined three million viewers, or about a million more than the average MLS championship game.
“Just because Major League Soccer isn’t as successful as the other major sports leagues in North America, it doesn’t mean that Real Madrid isn’t a valuable brand in North America,” Mason said.
Hopkinson declined to disclose any Real Madrid state secrets, but one imagines the likes of General Electric Co., Verizon Wireless, Coca-Cola Co. and more should expect a call from Spain soon.
Hopkinson, meanwhile, turned 48 on Nov. 1, the last in a cascade of family birthdays since the move to Madrid in September. To celebrate, he and his wife, Lawrie, took their girls, Miranda, 15, and Claire, 10, to Paris for the weekend. They got an Airbnb, went up the Eiffel Tower, strolled along the Champs-Elysées, ate great food, drank it all in.
What had started as a job offer had become a family adventure, and a fresh challenge for a veteran sales guy with a knack for ringing the bell the Hopkinson way.
“You know how they say there is some magic about the 90-day mark at a new job?” Hopkinson mused, from his bathroom hideaway. “Well, I feel the magic is happening. I am getting dangerously close to figuring this all out.”
Pursued by an activist investor and tallying a $164 million net loss in its third quarter, Hudson’s Bay Co. still managed to stir up some enthusiasm among industry analysts and investors after its earnings release Wednesday. The reason for hope, says one industry observer, is the company’s new chief executive, Helena Foulkes.
“They have a pulse now,” said Bruce Winder, partner at Retail Advisors Network. “You see significant movement and action on her part and that gives investors some confidence.”
“It’s going in the right direction but boy oh boy is there still a lot of work to be done here. By no means are they out of the woods yet.”
HBC reported a net loss of $124 million in its continuing operations in the third quarter, worse than the $116 million loss a year ago, driven primarily by increased depreciation and amortization expenses and foreign exchange losses. Sales rose five and a half per cent to $2 billion. Including its European operations, Hudson’s net loss stood at $164 million, compared with $243 million a year ago.
Saks Fifth Avenue, the luxury department store chain HBC bought in 2013, saw a 7.3 per cent boost in same-store sales, well above HBC’s overall rate of 1.2 per cent. The increase comes despite a major renovation at the Saks flagship store in New York City.
“We’ve been focused on fixing the fundamentals of our business,” Foulkes said in a call with industry analysts, adding that the quarterly results were proof of progress.
Hudson’s Bay Co CEO Helena Foulkes has made some ‘drastic moves’ during her 10 months on the job, industry observers say.
CIBC Capital Market analysts called the results “encouraging” in a research note, adding that the same-store sales growth at Saks was the brand’s “best result in years and third consecutive quarter above six per cent.” But the analysts found HBC’s Lord and Taylor stores were continuing to struggle.
After taking over as CEO, Foulkes said she saw no “sacred cows” in the company.
“Everything is on the table,” she said in March.
Earlier this year, Foulkes announced the closure of 10 Lord and Taylor stores. Closures at the department store will continue next year, HBC’s chief financial officer Edward Record told analysts Wednesday. HBC is also closing roughly four Saks Off Fifth locations, he said.
While its luxury Saks Fifth Avenue brand appears to thrive, HBC’s contingent of mid-level chains — Hudson’s Bay, Home Outfitters, Lord and Taylor and Saks Off Fifth — are the “albatross” around the company’s neck, said Winder.
“The department store business is in decline,” he said, pointing to shifting consumer preferences to e-commerce and specialty stores. Only a few luxury department stores, and discount chains, have managed to make it work, leaving stores like Hudson’s Bay “caught in the middle.”
The solution, Winder said, is to gradually cull underperforming stores, freeing up HBC’s valuable real estate holdings.
HBC has been hounded by an activist investor, Land and Buildings Investment Management, to do just that. In a letter to HBC shareholders last week, Land and Buildings founder Jonathan Litt gave HBC a laundry list of ways to unlock real estate value, including selling the Saks flagship store on Fifth Avenue in Manhattan, as well as selling off the Lord and Taylor brand and liquidating its inventory and real estate.
“HBC’s Board has an appalling track record,” Litt wrote. “We believe change on the Board is needed to ensure that the Board listens to its shareholders and takes the steps needed to truly maximize value for all shareholders.”
CIBC analysts wrote Wednesday that HBC’s share price rose by 15 per cent following the release of Litt’s letter. And after HBC’s quarterly update on Tuesday evening, its share price jumped five per cent to $9.47 in less than an hour after market open Wednesday.
TORONTO — Roots Corp. is looking to a Canadian heartthrob to stitch up the brand’s slowing sales and dropping shares.
The Toronto-based apparel company has launched a capsule collection with singer Shawn Mendes just as it announced sales fell “well below” its own expectations in the third quarter, causing it to lower sales and earnings estimates from targets set when it went public in October 2017.
Chief financial officer Jim Rudyk attributed the performance, which caused shares to trade near all-time lows after falling more than 20 per cent to $3.59 in midday trading on the Toronto Stock Exchange, to a handful of factors.
“We entered the third quarter facing the same headwinds as Q2 — a weaker brand voice in the absence of a larger-scale marketing campaign and having to lap one-time sales related to Canada 150 although on a comparatively small scale,” said Rudyk.
“In addition we saw unseasonably warm fall weather that persisted through approximately two thirds of the quarter. As a result, we faced negative consumer traffic trends, which translated into negative sales growth.”
He revealed the company’s total sales for the three months ended Nov. 3 were $87 million, down three per cent from $89.7 million last year.
Roots X Shawn Mendes Award Jacket sells for $598.
To counter the slowdown and other factors that put a damper on the earnings, Rudyk said Roots was looking towards star power. Late in the third quarter, it unveiled a collaboration with OVO, a Drake-back brand that saw the rapper and other celebrities don Roots apparel.
Roots is hoping to replicate its success with the Mendes line it launched online Wednesday and in stores the day before. The collection includes a hoodie, sweatpants, T-shirts, a toque and a custom-designed jacket retailing for nearly $600.
“The initiative has been successful so far and is the first step in an ongoing collaborative relationship with Shawn,” said Rudyk. “As a fan of Roots from an early age, Shawn’s partnership with Roots is further proof of the diversity and power of our brand. We are excited to see where this relationship can go.”
The Mendes partnership has its work cut out for it because Roots said in its latest quarter that net income was $2.8 million or seven cents per share, down from $5 million or 12 cent per share last year.
Adjusted net income was $4.7 million or 11 cents per share, down from $9.6 million or 23 cents per share in last year’s third quarter.
Analysts had estimated $90.6 million of revenue and 16 cents per share of adjusted earnings, according to Thomson Reuters Eikon.
The company is now estimating between $358 million and $375 million of sales in fiscal 2018, compared with the estimated range of $410 million to $450 million when Roots did its initial public offering.
Roots is also revising its fiscal 2019 target range for adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) to between $46 million and $50 million, from its prior guidance of between $61 million and $68 million, along with adjusted net income of between $20 million and $24 million from its previously stated target range of between $35 million and $40 million.
TORONTO — Canadian department store chain Hudson’s Bay Co reported a wider third-quarter loss on Wednesday on higher depreciation and amortization expenses and foreign exchange losses.
The owner of the Saks Fifth Avenue luxury retailer reported a net loss from continuing operations of $124 million, or 52 cents a share, for the three months ended Nov. 3, compared with a loss of $116 million, or 64 cents, a year earlier.
Including Hudson’s Bay’s European operations, which are in a joint venture with Austrian Signa Holding, the company posted a net loss of $164 million, or 69 cents a share, narrowing from $243 million, or $1.33 a share, a year earlier.
Gross margin improved 10 basis points from the same quarter a year earlier.
Hudson’s Bay has embarked on a mission to boost flagging sales under Chief Executive Officer Helena Foulkes, who took on the role early this year, as it combats market share erosion by e-commerce behemoths including Amazon.com Inc.