As Canada’s oldest retailer, Hudson’s Bay Company is facing an uncertain future as it embarks on a significant restructure under creditor protection. On March 21, 2025, the Ontario Superior Court approved the company’s plan to keep only six locations open while initiating the liquidation of the remainder of its stores. This dire decision follows a process initiated on March 7 due to the company’s financial struggles, which have also affected its e-commerce business.
The approved restructuring plan means that Hudson’s Bay will retain just 7.5% of its national network of 80 stores. In a bid to salvage what it can, the company has decided to maintain its flagship store on Yonge Street in Toronto, as well as another store in the prestigious Yorkdale Shopping Centre, and one more at Hillcrest Mall in Richmond Hill, Ontario. Its remaining locations will focus on Quebec, including the downtown flagship store on Saint-Catherine Street in Montreal, CF Carrefour Laval, and CF Fairview Pointe-Claire.
In a court session that drew significant attention, Judge Peter Osborne noted, “This is the art of the possible and we are where we are today. In my view, there is no other alternative but to approve the liquidation effective immediately to maximize the chances of success.” The liquidation sales are set to begin on March 24, running through June 15, with all remaining stores required to vacate by June 30, 2025. This move has the potential to save around 9,364 jobs, crucial for individuals and families who rely on Hudson's Bay for their livelihoods.
However, this grim reality has led the company to also suspend its loyalty program, which boasts 8.2 million members holding approximately $59 million in unused points. Furthermore, gift cards will only be valid until April 6, 2025, adding to customers' frustration as they watch their shopping options dwindle.
The path leading to this decision involves a series of financial struggles, including deferred payments to landlords and suppliers and pressures from reduced consumer spending and increased competition. Between March 8 and March 14, the news of the impending liquidation sparked a significant flurry of sales, allowing the company to rake in $21 million—$7.4 million over their expectations. This revenue is critical as it enables Hudson's Bay to make substantial monthly payments to their joint venture partners and manage the complex financial responsibilities that come with maintaining their operations.
As of now, Hudson’s Bay owes approximately $5.4 million for property insurance policies due on March 24, intending to make an initial $1.6 million payment followed by monthly installments of around $431,000.
In response to the unfolding situation, Hudson’s Bay’s legal counsel, Ashley Taylor, conveyed the company’s intention to explore other avenues to occupy its leases and evaluated the prospects of potential sell-offs of its valuable assets. As reported, Hudson's Bay had initially sought to engage commercial real estate firm JLL, but due to conflicts with landlords, they have opted for another route to explore these opportunities, putting forth the suggestion to work with Oberfeld Snowcap.
Tensions in court were palpable, as various stakeholders including landlords, employees, and legal representatives evaluated the potential impact of the looming closures. Andrew Hatnay, an attorney representing employees within the labor union, voiced deep concerns regarding the sudden shift from creditor protection to liquidation, asserting that the process was moving too quickly for employees to genuinely understand the broader implications. “We will see how this works out,” he said, “but even if they pull something out of their hat, stores are still going down. That is not a good news story.”
Hatnay pointed out the stakes involved, not solely pertaining to jobs but also referring to benefits, pensions, and severance for approximately 21,000 past and present employees spanning Hudson's Bay, Saks Fifth Avenue, and other acquisitions. He lamented over the reality that employees are not likely to see severance, estimating that the total could add up to around $100 million.
The company’s struggles are emblematic of broader trends affecting traditional retailers, particularly those with deep historical ties to Canadian culture. Founded in 1670, Hudson’s Bay has not only served countless customers through its iconic merchandise but has played a role in historic developments throughout Canadian history, yet it now finds itself wrestling with a new retail landscape that demands agility and creative solutions for survival.
As Hudson’s Bay navigates these challenging waters, the continued hope remains that a viable long-term solution can be found to keep the stores open and offer their valued employees and loyal customers some elusive stability. However, with the clock ticking and uncertainties looming, the road ahead is fraught with obstacles as they try to reinvent themselves in a rapidly changing retail environment.
This report captures the unfolding aspects of Hudson’s Bay Company’s plans as it strives to preserve its legacy while also addressing the existential challenges that have arrived at its doorstep.
