Hudson’s Bay, one of Canada’s most historic retailers, announced on Friday night that it may begin liquidating its entire business as soon as next week. This drastic move comes as the company struggles to secure funding, putting more than 9,000 jobs at risk.
The department store, which dates back to 1670 and currently operates 80 stores, has been searching for financial support to sustain at least part of its operations. However, despite exhaustive efforts, Hudson’s Bay has not been able to secure the necessary capital. If no alternative solutions are found, the full liquidation process is expected to proceed following a scheduled court appearance on Monday.
9,364 Jobs at Stake as Closure Looms
The potential shutdown would impact 9,364 employees working across Hudson’s Bay locations in Canada, including three Saks Fifth Avenue stores and 13 Saks Off 5th locations operated under a licensing agreement.
While the company is in dire straits, it remains hopeful that an eleventh-hour solution can be found. Key stakeholders, particularly landlords, are being engaged to explore any remaining avenues to keep the business afloat.
“Our team has worked incredibly hard to identify a viable path forward, and our resolve is strengthened by the overwhelming support from customers and associates who have shared heartfelt stories about Hudson’s Bay and its impact over generations,” said Liz Rodbell, president and CEO of Hudson’s Bay.
“These powerful experiences remind us why we must continue to pursue every possible opportunity to secure the necessary support from key landlords and other stakeholders to save The Bay.”
Financial Struggles and Legal Proceedings
The announcement follows a March 7 court filing in which Hudson’s Bay disclosed its financial hardships in a creditor protection application submitted to the Ontario Superior Court of Justice. The company cited several reasons for its financial struggles, including reduced consumer spending, economic uncertainties, trade tensions between the U.S. and Canada, and a decline in foot traffic in post-pandemic urban centers.
According to legal filings, Hudson’s Bay owes over $950 million to various creditors, including landlords, suppliers, and well-known fashion brands such as Ralph Lauren, Chanel, Columbia Sportswear, Diesel, and Estee Lauder.
Jennifer Bewley, Chief Financial Officer of Hudson’s Bay’s parent company, stated that the retailer had been unable to meet many financial obligations for months. She revealed that some landlords had already taken drastic measures, including one who “unlawfully locked” Hudson’s Bay out of a store in Sydney, Nova Scotia. Additionally, bailiffs attempted to seize merchandise from the company’s location at Sherway Gardens in Toronto.
From Restructuring to Liquidation
Initially, Hudson’s Bay did not intend to shut down its entire business. Instead, it aimed to restructure and keep as many stores open as possible. However, the company has only managed to secure limited debtor-in-possession financing, a special type of funding meant to support restructuring efforts under creditor protection.
The company had previously separated its U.S. Saks stores into a different entity after acquiring luxury retailers Neiman Marcus and Bergdorf Goodman, helping those businesses avoid the financial turmoil now engulfing Hudson’s Bay in Canada.
Impact on Employees and Commercial Real Estate
A complete liquidation would not only leave thousands of workers unemployed but also create major vacancies in shopping malls and prime retail locations across Canada. Hudson’s Bay stores typically occupy large multi-floor spaces that are difficult to repurpose for other businesses.
The retailer operates 32 stores in Ontario, which employs over half of its workforce. British Columbia has 16 locations, Alberta and Quebec each have 13, while Manitoba, Nova Scotia, and Saskatchewan have two per province. Saks Fifth Avenue stores are found in Ontario and Alberta, while Saks Off 5th locations are spread across Ontario, British Columbia, Alberta, Quebec, and Manitoba.
An Iconic Brand Facing Uncertain Times
Hudson’s Bay has been a significant part of Canada’s history, with roots dating back to the fur trade in the 17th century. However, in recent decades, the company has been managed by American owners. Real estate mogul Richard Baker acquired Hudson’s Bay in 2008 for $1.1 billion and took it public in 2012 before making it private again in 2020.
While Baker had high hopes of revitalizing the brand, Hudson’s Bay faced growing competition from other retailers. Canadian department store Simons has been expanding, while online giants like Amazon continue to dominate the retail landscape.
Hudson’s Bay is still seeking last-minute financial backing, but if no viable path forward emerges, liquidation could begin in a matter of days. The outcome of Monday’s court hearing will be critical in determining the company’s fate.
As the retail industry continues to evolve, Hudson’s Bay’s struggles highlight the challenges faced by traditional department stores in an increasingly digital shopping era.
