La Baie d'Hudson, Canada’s oldest retail chain, is set to begin liquidating most of its stores effective March 24, 2025, while managing to keep six locations operational thanks to recent sales boosts.
After a week of intense negotiations and deliberations, the Ontario Superior Court, led by Judge Peter Osborne, granted the retailer permission to proceed with the liquidation. Judge Osborne acknowledged, "It is the art of the possible, and we are here today. To my mind, there is no other option." This approval gives La Baie d'Hudson the green light to liquidate its operations except for a handful of stores that are deemed financially viable.
The six stores that have escaped liquidation include the iconic flagship store on Yonge Street in Toronto, as well as locations in Yorkdale and Hillcrest malls in Ontario. Additionally, two more stores situated in Quebec—specifically in Montreal's Carrefour Laval and Pointe-Claire—have been spared from the closures.
Ashley Taylor, a lawyer representing La Baie d'Hudson, pointed out the reason for this limited preservation of stores stems from recent sales exceeding the company’s expectations. He remarked, "If a solution is found, it is possible to remove additional stores from the liquidation, but if a restructuring solution is not found very quickly, [the six stores] will be added to the liquidation sale." The company has until early April 2025 to locate restructuring partners to avert further closures.
The retailer is facing a precarious financial landscape, having filed for creditor protection earlier on March 7, 2025, due to escalating debts and dwindling consumer demand compounded by severe business disruptions from recent economic conditions. Taylor indicated that the liquidity raised through the sales would help pay approximately $7 million in monthly rent obligations and handle a $16 million debt owed to Restore Capital.
In recent weeks, customers have flocked to La Baie d'Hudson stores to snatch up its famed striped products, driven by fears of impending closures. Taylor noted, "Customers have been eager to buy our famous striped goods, fearing that the retailer will close for good," emphasizing the psychological impact of the liquidation notice on shopping behaviors.
The liquidation period is expected to last until June 15, 2025, with all stores to vacate their premises by June 30, 2025. Although specific details regarding significant discounts during the sale were not disclosed, the urgency to offload inventory marks a critical moment for the company.
However, the wave of purchases has not only brought hope for retention of some stores but has also highlighted the risks involved for employees. An estimated 9,364 workers currently face job losses if liquidation proceeds unchecked, a bleak outcome for many who rely on job security in such uncertain times.
La Baie d'Hudson's challenges are manifold. The company has long struggled with decreased consumer spending and the impact of trade tensions between Canada and the U.S., alongside difficulties in attracting foot traffic post-pandemic. As Taylor explained in court, the company was compelled to suspend rent payments to landlords and defer payments to suppliers.
Moreover, changes in loyalty programs have left many customers in limbo, with the retailer having suspended its loyalty program—which contains some 8.2 million Canadian members and an estimated $58.5 million in unused points. The company will also stop accepting approximately $24.2 million in outstanding gift cards from consumers after April 6, 2025, complicating matters further for its regular patrons.
Corporate attorneys mentioned that finding a sustainable solution quickly is critical, with Taylor expressing that the company "will work hard" to pinpoint a long-term solution. Nonetheless, he cautioned that time is of the essence, hinting at a race against the clock for those still committed to the retailer’s future.
As this situation unfolds, employees are becoming increasingly restless, fearing not only for their current positions but also their severance packages, projected by some legal experts to potentially exceed $100 million overall. Employees have previously expressed skepticism, reflecting a broader concern regarding job security amid corporate restructuring efforts.
Andrew Hatnay, an attorney representing the employees, voiced his apprehensions, suggesting that even if the company retrieves something from its ongoing negotiations, store closures would continue to be an unfortunate reality. He elaborated, "This is not good news" and highlighted that thousands of livelihoods hang in the balance as the ripple effects of these corporate decisions start to take hold.
The fate of La Baie d'Hudson is intricately tied to the decisions made over the coming weeks, as the chain grapples not only with sustaining its stores but also with the significant socio-economic implications of their future.
