Hudson’s Bay files for creditor protection

A Hudson Bay Company store in Toronto is shown on Monday, January 27, 2014. THE CANADIAN PRESS/Nathan Denette

Hudson’s Bay, Canada’s oldest retail chain, has filed for creditor protection and intends to restructure the business.

“Hudson’s Bay has been a vital retailer to Canadians for generations, and this decision was made with the best interests of our customers, associates and partners in mind,” said Liz Rodbell, president and CEO of Hudson’s Bay.

“While very difficult, this is a necessary step to strengthen our foundation and ensure that we remain a significant part of Canada’s retail landscape, despite the sector-wide challenges that have forced other retailers to exit the market. Now more than ever, it is critical that Canadian businesses are protected and positioned to succeed.”

CTVNews.ca reached out to HBC for comment on the WSJ report but was told by vice-president of corporate communications Tiffany Bourre that, “We do not comment on rumour or speculation.”

Retail Analyst Bruce Winder told BNN Bloomberg Friday that most people in retail are not shocked about the announcement.

“I think most people realize that its days were numbered,” Winder said.

“They’ve really starved the chain from capital over the last several years. I’m only guessing that sales are declining.”

‘Didn’t invest in the brand’

The chain, which operates more than 80 stores across the country, became an independent business after it split from Saks Fifth Avenue in December 2024.

Hudson’s Bay had announced that 41 members of their staff were laid off due to “challenging headwinds” affecting the retail industry in January.

The acquisition of Neiman for US$2.65 billion was a strategic move to form Saks Global, indicating Hudson’s Bay’s potential divestment, according to Winder.

The new entity is not expected to file for bankruptcy, the Wall Street Journal reported.

Winder pointed out that the channel that Hudson’s Bay has been trading in, which is the department store, has mostly been in decline in North America over the last decade.

“They really didn’t invest in the brand,” he said.

The shift in consumer shopping habits away from department stores also contributed to its struggles.

The pandemic was a big influence, but there were issues beyond that.

“A lot of good companies have rebounded since the pandemic, but their business model, unfortunately, was broken before then,” he said.

End of an era

The trend of department stores closing due to lost business has become a trend in North America, Winder said.

Stores like Nordstrom and Macy’s have either gone private or have been struggling “big-time,” Winder stated.

The reason for the end of this era is the consumer’s shopping behaviours.

“Consumers weren’t brought up on department stores,” he said.

“They’re bought up on buying from Amazon or buying from individual specialty stores.”

According to Winder, he has seen a polarization of consumers as either affluent or struggling, while department stores are built for the ones in the middle.

The question is whether they will liquidate or renegotiate with vendors and landlords, and come out of it, he said.