Hudson's Bay likely to find lots of buyers for assets like leases, stripes: experts

Bay branded products are seen on display in the Hudson's Bay store in Toronto on Monday March 10, 2025. THE CANADIAN PRESS/Chris Young

TORONTO — Retail experts expect Hudson’s Bay to see little love for Zeddy but a whole lot for its store leases and trademark stripes as it starts soliciting buyers for its assets.

Canada’s oldest company, which is on the brink of failure as it liquidates all but six stores and hunts for a way to stay alive, was scheduled to start seeking buyers for its most prized possessions this week.

The search will unfold in two parts: one for leases and another for the retailer’s remaining assets.

It’s not clear from court documents what the non-lease assets are and Hudson’s Bay did not immediately respond to a request for comment about the sales process, but experts believe the processes allow for a wide range of offers.

They expect the retailer’s brands — Stripes, Hudson North, Gluckstein and Zellers — to be for sale.

Many agree that the company’s most lucrative assets are its leases, which cover gigantic spaces in high-traffic neighbourhoods and anchor tenant spots in shopping centres.

While it’s unlikely another retailer will want to take over all that space, experts say there are bound to be takers if the property is broken up into smaller units or offered for residential use.

“Nobody’s going to step in and take all those locations in one fell swoop,” said Carl Boutet, chief strategist at Montreal-based retail advisory company Studio RX.

“Slow and intentional. That’s the name of the game right now, especially in this environment.”

He expects residential developers, entertainment businesses and other retailers to be among the parties that express interest in the leases by the April 7 deadline. Binding bids will be due May 1 with a final decision to be made sometime after.

Another hot item will be the company’s stripes. Hudson’s Bay’s green, red, yellow and indigo branding dates back to 1779, when the company with fur trading origins adapted the motif from point blankets bearing only gold stripes that were traded by settlers in the 1600s.

The company has since splashed the stripes across everything from coats and Barbie dolls to bath towels and candles.

Grant Packard, an associate professor of marketing at York University who previously held a vice-president role at Indigo Books & Music Inc., said neither the stripes nor the blankets will die because they’re both so iconic.

“The blanket is going to be around in some shape or form in the future,” he said.

“We’re not going to lose it.”

He imagines another Canadian brand like Roots or Red Canoe will try to make an offer that keeps the stripes alive but in a smaller form, like a specialty shop within larger stores.

Elisha Ballantyne, a Toronto-based retail consultant who has worked for Target, Walmart and Zellers, agrees the stripes have potential to fit into “a shop-in-shop” concept at a retailer like Canadian Tire or Hudson’s Bay’s rival department store La Maison Simons.

She thinks a buyer could expand the stripes branding across a whole host of other products and take advantage of the growing buy Canadian sentiment.

“Right now, with the pro-Canadiana, people want to support that,” she said. “I think that’s probably going to be one of the best assets that (the Bay) has.”

Its housewares brand Gluckstein, a partnership with interior designer Brian Gluckstein, as well as apparel line Hudson North and its Distinctly Home bed and bath products may also be of interest to buyers.

“Everything has a price,” said Boutet.

“There’ll be liquidators that’ll be coming in and probably picking up some inventory in volume to get a special deal, but will they continue that brand afterwards? It’s going to be a real challenge.”

Anyone wanting such assets from the Bay has until April 7 to express an interest through a process separate from the lease monetization efforts. If several competing bids come in, court documents show the company will hold auctions around May 16 and the winner will be expected to seek court approval by May 30.

Hudson’s Bay hasn’t said what it is looking for in potential buyers, nor how much it wants to fetch.

If the Zellers brand sells, Boutet imagines it won’t be for much because the subsidiary lacks the success it had decades ago. Zellers dates back to the 1920s but Hudson’s Bay purchased a majority stake in it in 1978.

It shut down most Zellers stores by 2013 but Hudson’s Bay revived the chain in 2022 through shops within Bay stores that mostly sold goods from Australian brand Anko. Plush versions of its teddy bear mascot Zeddy were also on offer.

The Bay operated some promotional food trucks to drum up attention for Zellers when it relaunched, but they paled in comparison to the diners the company once owned in stores.

“Maybe somebody says, ‘If I can get it for $1, maybe I’ll try something with it and open a diner called Zellers or something,’” Boutet mused.

Anyone who tries to revive the traditional retail side of the business selling home goods will have a tougher time, Ballantyne said, because Walmart dominates the discount market Zellers plays in.

“(A bidder) would have to be someone who really understands retail and that you can’t compete on the lowest price anymore because that’s Walmart’s angle,” she said.

“There’s nostalgia for it, but the challenge was Zellers wasn’t really competing well against Walmart at the time, so why would they now?”

This report by The Canadian Press was first published March 25, 2025.

Tara Deschamps, The Canadian Press