In a critical development for the Canadian retail landscape, an Ontario court has granted Hudson's Bay Company the green light to proceed with the liquidation of all but six of its stores. This significant ruling came from Ontario Superior Court Judge Peter Osborne on March 21, 2025, allowing the storied retailer, which has roots dating back to 1670, to begin unloading inventory at most of its 80 Hudson’s Bay stores, alongside three Saks Fifth Avenue locations and 13 Saks Off 5th shops in Canada.
"This is the art of the possible and we are where we are today. In my view, there is no other alternative," Judge Osborne stated, emphasizing the dire circumstances that have led the iconic brand to this point.
Among the six locations that are being spared from the liquidation are Hudson's Bay's flagship store on Yonge Street in Toronto, a prominent site in the Yorkdale Shopping Centre, and another in Hillcrest Mall, located in Richmond Hill, Ontario. Additionally, stores in downtown Montreal, Carrefour Laval, and Pointe-Claire, Quebec, have also been saved for the time being.
The liquidation process is set to commence on Monday, March 24, 2025, with expectations for it to run until June 15, 2025. All stores involved in the liquidation are required to vacate their premises by the end of June, escalating concerns about the potential loss of jobs and economic impact across the communities where they operate. The move could ultimately threaten the livelihoods of up to 9,364 employees who would have faced layoffs had the company proceeded with full liquidation.
Hudson's Bay sought creditor protection on March 7, 2025, due to mounting financial pressures from reduced consumer spending, the impact of Canada-U.S. trade tensions, and a notable decline in foot traffic following the pandemic. The situation compelled the company to defer payments to landlords and suppliers, forcing them into a position where seeking financing became unavoidable.
The report from court indicated that the recent uptick in sales, influenced by the rumor of liquidation, provided a temporary reprieve for the company. "If a solution can be found, there is an opportunity to pull additional stores out of the liquidation, but if a restructuring solution is not found very quickly, (the six) will be added to the liquidation sale," remarked Ashley Taylor, the lawyer representing Hudson's Bay.
While the actual depth of discounts during the liquidation remains unspecified, past experiences from other retailers indicate that it may start modestly before escalating as the sales progress. For instance, when Nordstrom exited the Canadian market in 2023, initial discounts surprised many, only to deepen as time progressed, leaving sparse selections as shoppers rushed for deals.
In addition to the physical implications for employment, the liquidation will also disrupt Hudson's Bay's loyalty program, which has approximately 8.2 million Canadian members holding roughly $58.5 million in unused points. The retailer has paused the program and will halt the acceptance of outstanding gift cards, totaling around $24.2 million, effective April 6, 2025, marking a significant blow to customer relations.
As the company weathers this storm, there are broader implications for its workforce. Andrew Hatnay, the employee lawyer, has raised concerns that the fast-paced nature of these proceedings could jeopardize jobs and severance benefits, with estimates of total severance costs approaching $100 million. He sardonically noted, "This is melancholy. This is the demise of HBC slowly but surely," painting a stark picture of the situation.
Hudson's Bay's pension plan, which encompasses both current and former employees from its various subsidiaries, remains well-funded at present, easing some fears regarding the long-term financial security of past workers. However, potential deficits loom over supplemental retirement plans and benefits for certain employees, indicating a precarious future.
Legal representation for various stakeholders has included landlords concerned about the loss of tenants affecting foot traffic and revenue in shopping centers. The court has had to balance the interests of Hudson’s Bay, its employees, and property owners to ensure the best outcome possible without jeopardizing too many assets.
In conclusion, Hudson’s Bay stands at a crossroads with its storied history hanging in the balance. This liquidation process serves as a stark reminder of the challenges faced by traditional retailers amidst evolving consumer preferences and increasing competition. Without a viable restructuring plan, the future of the once-resilient company remains uncertain as employees, customers, and communities await the next developments in this unfolding narrative.
