Hudson’s Bay future uncertain as judge holds off on liquidation plan decision

CTV News Edmonton's Connor Hogg talks to a retail expert about the problems facing Hudson's Bay as the company faces liquidation.

The liquidation of Hudson’s Bay stores across Canada won’t begin Tuesday after a judge delayed his decision in the case.

At the beginning of March, Hudson’s Bay filed for creditor protection with the intent of restructuring its business. The company admitted it was struggling with financial difficulties amid subdued consumer spending, Canada-U.S. trade tensions and post-pandemic drops in downtown store traffic across the country.

• Hudson’s Bay files for creditor protection

The plan was for the company to liquidate half of its 80 stores across Canada and monetize some of the leases it holds in prime, high-traffic areas.

“The market will always dictate what happens next, and the market didn’t support Hudson’s Bay,” Heather Thompson, the vice president of economy and engagement at the Edmonton Chamber of Commerce said.

“Unfortunately, businesses can’t just stay around because they’re iconic as a Canadian brand.”

Hudson’s Bay began as a fur trading company in 1670, making it nearly 200 years older than the country of Canada. It is Canada’s oldest retail chain.

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“Across the world, (department stores) are having a hard time and I think when we look at Hudson’s Bay in particular, there were a few things that really started to spell trouble for the company,” said Thompson.

“They didn’t really invest in their online platform, even their store experience was really dated, and the experts are really saying that one of the hardest parts for Hudson’s Bay is that they just didn’t have the critical investment at a time when they really needed it to make a difference.”

Across North America, retail businesses are struggling in mature communities, according to Thompson. Due to Hudson’s Bay’s age as a company, most of its stores are in those areas.

“The original inception of a department store is really interesting when it’s done well, when they have all their customer service desks staffed and ready to go,” she said.

“That’s not the case anymore, staff was hard to come by, it was losing money, and in terms of keeping the stores up, when you have that kind of real estate, especially old real estate, it’s really expensive.

On Monday, Ontario Supreme Court judge Peter Osborne delayed his decision on allowing the company to liquidate all 80 of its stores, including three Saks Fifth Avenue stores and 13 Saks Off 5th locations in Canada, saying he wanted more time to digest some of the issues lawyers representing the company, financiers and landlords raised.

“Once liquidation starts, it becomes a self-fulfilling prophecy,” said Andrew Hatnay, a lawyer representing Hudson’s Bay employees who opposed the move.

Osborne will also decide if the company can begin looking for a buyer for some or all of its properties or the business. This would allow potential buyers to bid on leases or intellectual property, like the company’s well-known stripes trademark.

That design is what drew one shopper to the Edmonton Kingsway Mall location Monday.

“I’ve always wanted a Hudson’s Bay blanket, and since they’re always so expensive, I thought today would be my last chance to maybe go in and get one,” said Aja Wilson.

“They were sold out already, but I managed to get a few things with the stripes on it., so that’s something.”

“The Hudson’s Bay Company, it’s a really integral part of the Canadian fabric … what the company is going to decide to do moving forward, to protect that legacy, is going to be really interesting,” added Thompson.

“Maybe we won’t see the Hudson’s Bay department stores in the way we have all grown up with it, there might be something different to protect the legacy and keep that sort of brand alive.”

Hudson’s Bay isn’t the first large company to run into similar issues, Sears Canada closed in 2018, Target Canada closed in 2015 and Nordstrom Canada closed in 2023.

If Hudson’s Bay folds completely, it would result in the largest mass-termination in the country since Sears Canada closed, according to Hatnay.

Despite these types of closures, the retail sector isn’t dying in Canada, it’s just changing, and businesses need to adapt, according to Thompson.

“Physical retail is actually growing. It doesn’t seem like that, because we’re seeing so many large format businesses leave the market, just given what the consumer is looking for, but … employees who work locally here and across the country will find something else, because it is a skillset that is in demand,” Thompson said.

“Consumers vote with their wallet, and that’s exactly what they should do, and it’s our job as Canadian businesses to make sure that we are incentivizing Canadians to shop locally. We make amazing products, we have great services, great business models, but we need to be globally competitive, and that’s the most important thing we can take from this lesson.”

With files from CTV News Edmonton’s Connor Hogg and The Canadian Press