In a significant move reflecting its ongoing financial turmoil, Hudson's Bay Company (HBC) has received court approval to liquidate all but six of its 96 stores across Canada. This decision, finalized on March 21, 2025, comes as the retailer grapples with nearly $1 billion in debt and seeks to pay back creditors while navigating a serious financial crisis.
The six stores that will remain open, at least for now, include the flagship Hudson's Bay location on Yonge Street in downtown Toronto, as well as stores in the Yorkdale Shopping Centre and Hillcrest Mall in Richmond Hill, Ontario. The remaining three stores are located in the Greater Montreal area: specifically, at Carrefour Laval, Pointe-Claire, and a downtown outlet. However, if HBC fails to secure a solid restructuring plan, these stores may also face liquidation.
In a court appearance on March 21, Hudson's Bay lawyer Ashley Taylor stated, "In discussions with the liquidator, we were able to negotiate for their removal, at least on a temporary basis." He cautioned, however, that this relief is precarious, noting that time is short for finding a restructuring solution. HBC entered the creditor protection process under the Companies’ Creditors Arrangement Act (CCAA) on March 7 after struggling to manage its obligations to landlords, vendors, and service providers.
The situation has worsened to the point where HBC reported being locked out of one of its locations in Sydney, Nova Scotia, while bailiffs attempted to seize merchandise at another outlet in the Sherway Gardens mall in Toronto. The retailer initially sought to restructure by closing about half its stores and divesting from prime real estate to raise the necessary funds, but a lack of sufficient financing pushed it toward liquidation.
Judge Peter Osborne, overseeing the court hearings, remarked, “There’s no alternative but to approve the liquidation effective immediately to maximize the chances of success.” Encouragingly for the company, early data has shown that sales at its remaining locations exceeded expectations following news of the impending closures, which may ease some financial pressure.
Even with court approval for liquidation, the future remains uncertain for HBC’s employees, with over 9,364 jobs at risk due to the imminent closures. Employee lawyer Andrew Hatnay stated during the proceedings, “This is the demise of HBC slowly, but surely, which is unfortunate. There are going to be, ultimately, very substantial severance claims for the employee population.” HBC's estimated severance liabilities are projected to total more than $100 million, raising further concerns among workers about their financial futures.
In light of the impending layoffs, the union representing many of HBC's employees has stressed the importance of clear communication from the company about the liquidation process. Local union representative Jordan Lawrence called the news "absolutely devastating" for the community, emphasizing the store's significance in Kamloops, where over 30 unionized jobs are at stake. He urged HBC to guarantee the security of pensions for its employees and to provide transparency in communications concerning layoffs.
The company also urgently needs to deal with its joint-venture obligations. HBC agreed to pay its partner, RioCan Real Estate Investment Trust, approximately $7 million each month. Although initially seeking exemption from this obligation during restructuring, RioCan opposed the move, reflecting growing tensions as both parties negotiate the future of their partnership. Joseph Pasquariello, a lawyer representing RioCan, described the court’s decision as a "good news day" while emphasizing the need to steer HBC toward a manageable path forward.
As the liquidation progresses, Hudson's Bay plans to conduct inventory clearance sales across the remaining 74 stores, with the process expected to last until June 15, 2025. The retailer will fully vacate the stores by June 30, 2025. There is also the risk for customers holding gift cards as Hudson's Bay will stop accepting them after April 6, with about $24.2 million outstanding, and the popular rewards program remains paused pending further updates.
While Hudson's Bay has managed to salvage six stores for now, ongoing discussions about restructuring aim to explore whether more locations can be saved. However, without significant financial intervention or an unexpected turnaround in sales, the future of the company remains precarious at best. As pointed out by Lawrence, generations of families have relied on Hudson's Bay as a staple of Canadian retail. The company's potential collapse symbolizes not just corporate failure but also a looming loss for community and culture throughout Canada.
As HBC continues to navigate this tumultuous period, many will be watching closely to see how this historic retailer adapts—or if it can withstand the pressures of a rapidly changing retail landscape. Will it find a way to remain an active player in Canadian commerce, or will it fall victim to the same fate as so many other iconic brands before it?
