Hudson's Bay Company (HBC), Canada's oldest retailer, is on the brink of closure as it prepares to begin liquidations as early as next week. The announcement came late on Friday, March 14, 2025, putting over 9,000 jobs at risk across its operations. Origins of this predicament trace back to the company's longstanding financial struggles, which have worsened significantly amid subdued consumer spending and shifting market dynamics.
Founded in 1670, HBC operates 80 department stores across Canada, and its proposed liquidation threatens 9,364 employees associated with Hudson’s Bay stores as well as its three Saks Fifth Avenue and 13 Saks Off 5th locations. The company recently filed for creditor protection to stave off immediate bankruptcy, but it announced last week the serious difficulties it faces.
“The closure of the company could become inevitable,” stated Jennifer Bewley, chief financial officer for Hudson’s Bay’s parent company, during her court filings. The company, which owes over $950 million to creditors ranging from Ralph Lauren and Chanel to Estée Lauder, admitted needing to defer payments to vendors and landlords for several months due to its dire financial standing.
The initial creditor protection application was made on March 7, 2025, as HBC grappled with debts and operational costs, and highlighted the significant impact of trade tensions, reduced consumer spending, and declining downtown traffic post-COVID-19. Central to the company’s restructuring strategy is the urgent need for more liquidity to avoid total liquidation.
Hudson’s Bay continues to seek support from key stakeholders, particularly landlords, as it attempts to raise necessary capital. CEO Liz Rodbell expressed determination, stating, “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.”
Despite these optimistic words, the outlook looks bleak. Due to limited debtor-in-possession financing available for restructuring, HBC acknowledged the imperative of moving to store-by-store liquidations.
Richard Baker, who purchased HBC for $1.1 billion back in 2008, took the company public and then private again, is no stranger to challenging circumstances. Since the COVID-19 pandemic struck, Baker's leadership has been closely tied to efforts meant to revive the company against competition from industry rivals as well as online giants like Amazon, which have gained significant market share.
Should Hudson’s Bay proceed with liquidation, it would not only lead to massive job losses but also leave substantial retail spaces vacant, impacting high-traffic shopping centers. Currently, the province of Ontario hosts the majority of HBC’s operations, with 32 stores, followed by British Columbia with 16, and both Alberta and Quebec with 13 stores each.
Adding to the complexity of the situation, HBC's financial documents detail roughly $920,000 owed to Vancouver Island creditors, with significant sums due to Central Walk—amounting to about $860,000—associated with mall properties where Hudson’s Bay stores operate. The Kingdom of British Columbia itself is owed approximately $2.88 million and is likely to prioritize loan recoveries over small unsecured creditors.
Creditors on Vancouver Island include AllFire Access Pro, owed around $30,940, and Haven Security, which is awaiting $19,400. The sentiment among these local businesses echoes the growing concern about HBC's solvency and operating future. Both creditors have noted delays and non-payments from HBC for over 18 months, severely impacting their operations.
Charles Schell, finance professor at Vancouver Island University, remarked on the situation: “Small unsecured creditors will likely not see any money from Hudson’s Bay as insolvency managers wind down operations.” His analysis indicates secured creditors, such as investment firms and banks, will take precedence during the debt resolution process.
The court proceedings set for March 17, 2025, will be pivotal, with expectations for Hudson’s Bay to apply for extensions and possibly clarify store closure strategies. While the fate of its numerous locations remains uncertain, the hope is for some path to maintain operations as the retail giant grapples with its historical significance and modern challenges.
HBC's long history, entwined with Canada’s early colonial days, has solidified it as more than just a retailer but also as part of the nation's fabric. The impending liquidation delivers stark reminders of how much the retail industry is changing and how traditional business models are under pressure, forcing companies like Hudson’s Bay to rethink their strategies dramatically.
This report by The Canadian Press was first published on March 14, 2025, shedding light on the heritage of Hudson’s Bay and its contributions to the Canadian economy, alongside the challenging circumstances it now faces.