This Is Your Captain Speaking, The Retail Sales Recovery Will Be Delayed

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This Is Your Captain Speaking, The Retail Sales Recovery Will Be Delayed

By Mike Troy - 08/03/2020
Hudson airports locations have been deprived of customers traffic due to an overall decline in air travel.

With 1,010 stores at 87 North American travel-related locations, Hudson felt a double impact from COVID-19 and is now going to extreme lengths to salvage its business.

The company saw sales decline 88.4% to 57.7 million and it reported an operating loss of $88 million for the second quarter ended June 30. It was forced to close roughly 700 stores during the quarter and furlough the majority of its workforce. Now, the company is permanently reducing its workforce by 40% as it continues to see a huge reduction in air travel and taking a number of innovative actions to drive sales where possible.

“The COVID-19 pandemic has had an unprecedented impact on world travel, and a corresponding impact on our travel retail business. While we took proactive and targeted actions beginning in March to significantly reduce expenses across the company, we determined that more structural and wide-ranging actions were necessary. Our reduction in force is a difficult but essential step in ensuring the long-term success of our business,” stated Roger Fordyce, CEO of Hudson.

As of July 31, Hudson had reopened 200 additional stores, bringing its total open store count to 450 locations, however the company’s store traffic is almost entirely dependent on airport passenger volumes and the movement of people through transit hubs and tourist destinations. The company said U.S. passenger levels increased sequentially in the months of May and June, volumes were still down approximately 75% from prior year levels in the last few weeks of July. The jobs cuts were also necessitated by the company’s bleak view that improvement is nowhere in sight.

“The current state of the overall North American and global travel industry and uncertainty around future developments relating to COVID-19, including a possible ‘second wave’ of infections, has led to the company’s decision to implement a reduction in workforce,” according to a statement released by Hudson.

Despite the challenging circumstances, Hudson is adapting to new traveler expectations in the COVID-19 environment. For example, it has begun rolling out vending machines in airports that sell a proprietary line of personal protective equipment branded as Traveler’s Best.

The company also said it was expanding its Grab & Go offerings to meet the needs of travelers because there are currently fewer food and beverage options in airports and on planes. It is also continuing to expand self-checkout capabilities in a number of its stores to minimize contact and speed checkout. There is also a partnership with Luxottica Group to open Sunglass Hut pop up shops at 10 locations in August with 250 locations by 2022.

“Over the past few months, we’ve taken strategic, ongoing actions to prioritize the health and safety of our team members and customers, maximize operational efficiency, and conserve cash, all of which we believe will allow Hudson to successfully navigate the short-term and long-term effects of this pandemic and execute a successful business recovery,” CEO Fordyce said. In spite of the challenges faced, our Hudson team has continued to be the traveler’s best friend for the travelers and essential personnel still present in our locations, and we are extremely grateful for their service and dedication. While acknowledging the uncertain environment, we believe the strength and experience of our team combined with the resiliency of our business model, position us well for the eventual rebound of travel.”