Assignment Requirements
Follow the handout I uploaded. Read the article I uploaded and answer the questions on page 1. Be sure to indicate questions number on top of each answer
THE BAY – You Are The Buyer…..
Read the article below and answer the three questions. Your answers should be typed and are due Week 10.
1. As stated in the article, Bonnie Brooks has worked to terminate 800 brands and bring in 250 productive
ones. As a buyer for The Bay, how would you ensure that these new brands that you were bringing in
would be productive for your department? (2 marks) What sort of selection factors would you look at
when choosing what brands to bring into the store? (4 marks) How would you decide what brands to get
rid of, and which ones to keep? (2 marks)
2. In thinking of Holt Renfrew compared to The Bay, what would you say are currently the differentiating
factors between the two retailers? (4 marks) Create a comparison chart between the two retailers with a
SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis being done. (8 marks)
3. According to Bonnie Brooks, “Product differentiation is a key competitive strategy for us.” As a buyer for
The Bay, what strategies would you implement in the future to ensure that you are following this mission?
(4 marks) What will you do to ensure that your assortment and overall department are continuously
different from the competition? (4 marks)
FMI 2420 – The Bay, You are the Buyer
History inspired; The Bay looks to its past as the iconic retailer envisions a hipper future
Hollie Shaw. National Post. Don Mills, Ont.: Nov 20, 2010. pg. A.10
Copyright CanWest Digital Media Nov 20, 2010
How do you reinvent Canada’s oldest retailer? If you are Bonnie Brooks, president of The Bay, you look to the past
for inspiration, from the company’s roots as a fur trader in 1670 to trading heavily on the primary colours of the
retailer’s historic point blanket in a new line of Canadiana chic products.
That is the vision Ms. Brooks, pegged for the top job at the Hudson’s Bay Co. unit more than two years ago,
outlined to a business audience at an Empire Club of Canada luncheon in Toronto this week.
Trading heavily on the company’s roots, she reminded the audience that the Olympic outfitter also clothed the
country’s first settlers and gold diggers: The company’s formation by fur traders was front and centre in a 1941
Hollywood movie starring Gene Tierney, Hudson’s Bay.
That history is being repurposed in order to make The Bay, which lost relevance catering to middle-aged and older
consumers in the 1990s, matter to a new audience of younger, hipper consumers. Among the signature pieces of
merchandise in its HBC Collection are coats, a $95 pair of cashmere slippers, a Burton snowboard and a cedar -strip
canoe available by special order, all bearing the point blanket’s signature stripes.
“It is the one company [in Canada] that can legitimately be marketed as the ultimate authority on all things
Canadian,” Ms. Brooks said.
Beyond the history, and of greater interest to the crowd, was how The Bay managed to hold on and even flourish
while North America was gripped by the most significant recession since the Depression.
Part of the answer lies in the sheer magnetism of Ms. Brooks herself, who has a 30-year history in retail and got
her start at Canadian fashion chain Fairweather. After working briefly as editor-in-chief of Flare magazine in the
1990s, she furthered her taste for luxury at Holt Renfrew, where she worked as an executive before moving to
Asia. Before coming back to Canada to run The Bay, after being tagged by HBC’s owner, savvy U.S. real estate
baron and Lord & Taylor owner Richard Baker, Ms. Brooks was president of department store chain Lane Crawford
in Hong Kong, where she lived for 11 years.
A stylish 57, Ms. Brooks is not afraid to make herself the face — or the voice — of the 92-store retail chain. Her
throaty purr has voiced numerous radio spots this year touting such exclusive HBC items as men’s dress shirts, and
she is a visible presence at in-store fashion shows and shopping events. She is particularly hands-on when it comes
to fashion, scouting apparel and trends in such cities as New York, Paris and Milan.
Ms. Brooks also has a formidable reputation in the industry: She scored another coup this week when she wooed
Shelley Rozenwald to become head of beauty at The Bay (her whimsical title, to be exact, is ‘Chief Beauty
Adventurer’). Ms. Rozenwald, a former cosmetics and beauty services executive at Holts, has worked for the past
two years as president of Shoppers Drug Mart’s budding stand-alone cosmetics chain, Murale. Shoppers has taken
a significant bite out the premium beauty business in Canada in the past five years and Ms. Brooks is aiming to get
some of that back.
But Ms. Brooks’s greatest asset thus far, industry experts say, has been her ability to gut The Bay’s once-tired
merchandise assortment and start afresh as the nationwide chain undergoes a modern facelift.
FMI 2420 – The Bay, You are the Buyer
Ms. Brooks has shed 800 lacklustre brands in the past year and added 250 new ones, 90% of which are exclusive to
The Bay in Canada. “Product differentiation is a key competitive strategy for us,” she said.
More critically for price-conscious consumers, Ms. Brooks has added brands that fill a price and quality void
between high-end specialty merchandise and mass merchandise. While there are at least seven U.S. department
stores focused on that pricing strategy, nobody in Canada was following it, she said. “We like to think of ourselves
as the Macys, the Bloomingdales and the Nordstrom of Canada.”
The strategy was aided in part by the waning economy, which went into a tailspin not long after she took the helm
at The Bay in 2008. As the economy made a gradual recovery, many Canadian retailers began outperforming their
U.S. counterparts.
“A lot of the brands that had been doing business in the U.S. wanted additional distribution in Canada,” Ms. Brooks
said.
The Bay’s transformation has surprised some of the most jaded retail observers in Canada. Although department
store performance in this country has been on the wane since big-box giants such as Wal-Mart, Winners and
Costco began siphoning away in the 1990s at general merchandise and apparel sales, The Bay now seems to be
holding its own against them and against strong specialty players such as H&M and The Gap.
While staying mum about the specifics of business performance at the privately held company, Mr. Brooks says
The Bay is doing “very well,” with higher earnings before interest and taxes and sales to date in 2010 compared
with the previous year, even excluding the sales boost the retailer gained as official apparel outfitter of the 2010
Olympic Games in Vancouver.
Market research firm Trendex North America noted in a recent apparel industry report that while most Canadian
clothing chains reported negligible sales at stores open for more than a year in the first six months of 2010, The
Bay bucked the trend with a solid first half.
By Trendex estimates, The Bay increased its share of the country’s retail apparel market steadily through the
recession to 7.7% for the year ending June 2010, up from 7.5% in 2009 and 7.3% in 2008. Trendex estimates rival
Sears Canada’s apparel share slid to 10.2% from 12.4% during the same period. In the meantime, Sears Canada
reported a profit plunge of 60.7% in the third quarter this week. Sales at stores open for more than a year, a key
measure of retail performance, were down 8.2%. Chief executive Dene Rogers cited continued economic pressure
but called the results “very disappointing.”
Despite the middle-tier pricing strategy, Ms. Brooks has also not shied away from linking The Bay to the image enhancing allure of luxury brands, even though the bulk of its consumers might not be able to afford them.
She spent $5-million to restore The Room — a remnant of the flagship Queen Street location’s St. Regis Room in
Toronto that first opened in the 1930s — to its former splendour a year ago. With a the aid of a luxury interior
designer, Ms. Brooks took out the boutique’s baroque fixtures and dark jewel tones and transformed it into a stark
white fashion gallery with 70 fashion brands, including Gianfranco Ferre and Jason Wu, and art installations, a
move that garnered widespread press attention in and out of Canada.
“There is no doubt [Ms. Brooks] has been effective getting all the flagship stores into a top position,” said shopping
centre and retail consultant Anthony Stokan, partner at Anthony Russell and Associates in Toronto. “She has also
been working diligently with the marketing department and various vendors to ensure that the advertising and
print messaging have been of exceptional quality. They rival any of the best American department stores.”
FMI 2420 – The Bay, You are the Buyer
Where The Bay continues to present a “daunting challenge,” he says, is in secondary markets and suburban areas
where the bulk of its business lies.
“There are stores that look old and tired and in need of upgrades,” he said. “It is tough to tak e an old shell of a
department store that has likely been an integral part of these shopping centres since they were built, and give
[the stores] all major face-lifts when [prior management] was negligent about looking after them.
“How do you effectively take all of the brilliant advertising and great brands and translate it into stores in the heart
of the country that are kind of ho-hum? If [Ms. Brooks] can persevere, we are going to see a revival one of the
great retail stores in the world, but I would venture to say that she is not halfway there yet.”
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