Speaking of Private Equity, What's Up with HBC?

The short answer is "nobody knows."

I was having lunch with the area rep for a major manufacturer last week. Amongst all the other industry gossip we covered, the subject of HBC and The Bay came up, since he has to call on their Alberta stores where his brand is displayed. His comments all boiled down to disapointment with their sales volume, and the lack of either motivation or ability amongst their commission sales associates. I knew he was especially cross when he ranked The Bay's commission sales associates beneath the hourly wage kids at Best Buy/Future Shop. Is that comparison embarrasing enough for you?

In the one year plus since Maple Leaf Holdings took HBC private, the changes they have made seem to have amounted to a lot of a little. On the one hand, their tv spots and Run of Print ads for both The Bay and Zellers have become catchier and more coherent in their message. On the other hand, the stores themselves are an embarassment, which I have talked about before.

So, the initial impression is that they are spending more money at Head Office, but not improving the actual customer experience through supply chain management, and Visual Display. All the attempts at Visual Display I've witnessed on the now rare occassions that I havebeen persuaded to try and shop at a Bay or Zellers have come across as half hearted and vaguely pitiful.

If the big strategy to turn HBC around is to spend more on advertising, and less on store operations, I don't think they're on to a winner.

Personally, I think that HBC's owners are killing time as they quietly shop around HBC's real estate assets, which is where the real value lies in the company. Given the mediocrity of the store experience under the new ownership, I don't give much credence to the talk of turning their retail performance around. I, and others like me, know what has to be done to right-size HBC and make it viable, but the last time I checked, no one was asking us, nor offering to pay us to do it.





As an added bonus, this link to the open forum on the Discover Vancouver website is full of internet trolls, both ex-HBC staff and ex-shoppers bitching and moaning about how much they hate HBC. I stumbled across it one day while Googling myself (I know, I know). I'm not suggesting that you should give too much credence to anything printed anonymously on the internet, but as my friend Jason at the Marketing Matters agency tells his clients, as part of understanding your brand, Google "your company" + "sucks" to get a complete picture of where you are in the marketplace, and what you can do to improve.

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