Mr. Kennedy: The Northwest Company was spun-off from the Hudson Bay Company through a leveraged buy-out in 1987. The Hudson's Bay Company was and still is a national retailer in Canada with two principal formats ' discount merchandising and department stores. North West operated as the smaller Northern Stores Division of the Hudson's Bay Company and was made up of retail stores serving remote areas of Northern Canada. The history of our stores traces to the beginning of the fur trade era and the exploration of northwestern North America. Some of our store locations have been in continuos operation for over 300 years.
TWST: What's the business look like today?
Mr. Kennedy: Today, the business is being repositioned to re-focused
remote and rural retailing. We've carved out stores in markets that
didn't fit that niche. Our markets have a strong logistical component.
The outbound logistics are complex. We serve our stores through every
mode of transportation, sometimes multiple modes at the same store. For
example, we ship to 42 stores in the Eastern Arctic of the Canadian
North by ship through an Eastern Arctic sealift. We inventory that
product at store level until the next sealift because of the cost
differential compared to air fright. Other stores are serviced by ice
roads in the wintertime, which are temporary winter roads, or by air.
Only a quarter of our stores are accessible by all weather road. We
acquired our Alaska Commercial Company in 1992. This store group was
underperforming when we bought it but since then we've built the
business, bringing efficiencies by consolidating infrastructure with
Canada and creating a clearer market focus on food and every needs.
We're now the leading retailer in rural Alaska. That's the focus we're
now pursuing in Canada, where we already have a strong market position.
We're streamlining our in-store assortment to be better at selling a
product and service mix that people buy locally and for which they are
prepared to pay a convenience and service premium. This is a distinct
change from the very broad, general store format that we historically
ran.
Tickers included in this excerpt: NWF.UN
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