Hudson's Bay Receives Court Approval To Liquidate Most Stores

Hudson's Bay Co., Canada’s oldest retailer, is entering a challenging new chapter as an Ontario court has granted the company permission to begin liquidating all but six of its stores across the country, effective Monday, March 24, 2025. This ruling comes after a turbulent week filled with court hearings amidst significant financial struggles facing the company, which has been a fixture in Canadian retail for generations.

According to Justice Peter Osborne of the Ontario Superior Court, the decision was an act of necessity. "This is the art of the possible, and we are where we are today. In my view, there is no other alternative," he stated during the ruling on March 21, 2025. This liquidation will impact most of Hudson's Bay’s 80 locations along with its three Saks Fifth Avenue and 13 Saks Off 5th shops in Canada.

In a small glimmer of hope, six stores have been spared from immediate liquidation, including the flagship Hudson's Bay store located on Yonge Street in Toronto, a location in Yorkdale mall, and another in Hillcrest Mall in Richmond Hill, Ontario. The remaining three are situated in downtown Montreal and within the Carrefour Laval and Pointe-Claire malls in Quebec. However, uncertainty looms as Hudson's Bay lawyer Ashley Taylor added that if a financial restructuring is not secured soon, even these locations could join the liquidation process.

The liquidation sales are scheduled to run until June 15, 2025, with all stores slated to vacate by the end of June. While the company has yet to announce the depth of discounts during this transition, there is growing concern as to how this will affect both shoppers and employees. With 9,364 jobs on the line, many employees face an uncertain future as the company seeks to recover from a series of financial setbacks, including reduced consumer spending and decreased traffic to downtown stores following the pandemic.

Since filing for creditor protection on March 7, 2025, Hudson's Bay has experienced an unexpected spike in sales. "Sales have exceeded expectations," Taylor explained, allowing the company to repay some of its debts and possibly stave off full-scale liquidation. The retailer was also able to defer paying approximately $7 million monthly in rent to a joint venture with RioCan Real Estate Investment Trust, further highlighting the delicate financial balance the company is attempting to maintain in these difficult times.

Moreover, the company has paused its loyalty program that had about 8.2 million Canadian members and roughly $58.5 million in unused points. Consumers holding gift cards worth around $24.2 million will no longer be able to use them after April 6, 2025, further complicating the customer relationship Hudson's Bay has maintained over the years.

Despite the hopeful uptick in sales, Hudson's Bay employees are facing substantial fears about severance and job security. Lawyer Andrew Hatnay, representing employees and retirees, anticipates that severance claims may exceed $100 million in total as many expect to lose their jobs. Expressing the gravity of the situation, Hatnay lamented, "This is melancholy. This is the demise of HBC, slowly but surely." His concerns echo the collective anxiety felt by employees across the company, many of whom have dedicated years of service to the retailer and stand to lose more than just their jobs.

As the court proceedings continue, Hudson's Bay remains under scrutiny from various stakeholders, with measures being taken to find additional financing and restructuring opportunities. Justice Osborne emphasized the urgency of this situation, confirming that the economic viability of Hudson's Bay depends on swift and effective action. "The company does not currently have an agreement on which it could base a restructuring plan," he warned, underscoring the precarious position of the iconic company.

In the coming weeks, Hudson's Bay will be working diligently to approach lenders and potential investors who might aid in salvaging part or all of the business. Taylor assured the court that they would "cast the net as wide as possible" to save jobs and reopen some locations, focusing on the six that have so far been spared. However, without immediate solutions, there remains a genuine concern that the current fate of the retailer may be prolonged and could lead to further closures.

Hudson's Bay, a symbol of Canadian retail history, is at a critical juncture. With its storied past now clashing with a harsh economic reality, both consumers and employees alike are left anxious, wondering what the future may entail for a chain that has seen better days.