Saturday, March 22, 2025

"Hudson’s Bay files for creditor protection"/ "Hudson's Bay files for creditor protection, intends to restructure"

Mar. 7, 2025 "Hudson’s Bay files for creditor protection": Today I found this article by Luca Caruso-Moro, Aarjavee Raaj, and Lynn Chaya on BNN Bloomberg:



Hudson’s Bay, Canada’s oldest retail chain, has filed for creditor protection and intends to restructure the business.

“Hudson’s Bay has been a vital retailer to Canadians for generations, and this decision was made with the best interests of our customers, associates and partners in mind,” said Liz Rodbell, president and CEO of Hudson’s Bay.

“While very difficult, this is a necessary step to strengthen our foundation and ensure that we remain a significant part of Canada’s retail landscape, despite the sector-wide challenges that have forced other retailers to exit the market. Now more than ever, it is critical that Canadian businesses are protected and positioned to succeed.”

CTVNews.ca reached out to HBC for comment on the WSJ report but was told by vice-president of corporate communications Tiffany Bourre that, “We do not comment on rumour or speculation.”

Retail Analyst Bruce Winder told BNN Bloomberg Friday that most people in retail are not shocked about the announcement.

“I think most people realize that its days were numbered,” Winder said.

“They’ve really starved the chain from capital over the last several years. I’m only guessing that sales are declining.”


‘Didn’t invest in the brand’

The chain, which operates more than 80 stores across the country, 

became an independent business after it split from Saks Fifth Avenue in December 2024.

Hudson’s Bay had announced that 41 members of their staff were laid off due to “challenging headwinds” affecting the retail industry in January.

The acquisition of Neiman for US$2.65 billion was a strategic move to form Saks Global, indicating Hudson’s Bay’s potential divestment, according to Winder.

The new entity is not expected to file for bankruptcy, the Wall Street Journal reported.

Winder pointed out that the channel that Hudson’s Bay has been trading in, which is the department store, has mostly been in decline in North America over the last decade.

“They really didn’t invest in the brand,” he said.

The shift in consumer shopping habits away from department stores also contributed to its struggles.

The pandemic was a big influence, but there were issues beyond that.

“A lot of good companies have rebounded since the pandemic, but their business model, unfortunately, was broken before then,” he said.


End of an era

The trend of department stores closing due to lost business has become a trend in North America, Winder said.

Stores like Nordstrom and Macy’s have either gone private or have been struggling “big-time,” Winder stated.

The reason for the end of this era is the consumer’s shopping behaviours.

“Consumers weren’t brought up on department stores,” he said.

“They’re bought up brought up on buying from Amazon 

or buying from individual specialty stores.”

According to Winder, he has seen a polarization of consumers as either 

affluent 

or struggling, 

while department stores are built for the ones in the middle.

The question is whether they will 

liquidate 

or renegotiate with vendors and landlords, and come out of it, he said.



Mar. 7, 2025 "Hudson's Bay files for creditor protection, intends to restructure": Today I found this article on CBC:


Canada's oldest retailer, Hudson's Bay Co., has filed for creditor protection and intends to restructure the business.

The department store company that dates back to 1670 says it has been facing "significant" pressures including 

subdued consumer spending, 

trade tensions between the U.S. and Canada 

and post-pandemic declines in downtown store traffic.

"While very difficult, this is a necessary step to strengthen our foundation 

and ensure that we remain a significant part of Canada's retail landscape, 

despite the sector-wide challenges that have forced other retailers to exit the market,"

Liz Rodbell, president and CEO of Hudson's Bay, said in a news release.

"Now more than ever, it is critical that Canadian businesses are protected and positioned to succeed."

As part of the filing it made with the Ontario Superior Court of Justice on Friday, the Bay said it was exploring several strategic options to strengthen its business and said it would not make promises but was committed to preserving jobs where possible.

While the process can lead to the sale or closure of a business, the Bay appears intent on avoiding those possibilities and keeping much of its sprawling retail footprint alive.

The company has 80 retail locations that sell everything from apparel and housewares to cosmetics and furniture.

Through a licensing agreement, it also owns 

three Saks Fifth Avenue stores 

and 13 Saks Off 5th locations in Canada, 

which will continue to operate.


Tariffs, tariff threats a problem

Saks Global, which owns U.S. Saks locations as well as Neiman Marcus and Bergdorf Goodman stores, is not connected to the creditor protection filing that was made as the U.S. continued to threaten Canada with additional tariffs Friday.

Rodbell said the U.S.'s earlier provocations had already harmed Hudson's Bay. While the company was negotiating with potential investors to bring in more liquidity, 

the threats and eventual implementation "created significant market uncertainty" that ultimately stopped any possible deals from closing.

She was hopeful a $16 million advance and Friday commitments from U.S.-based investment management firm Restore Capital and other lenders, 

meant to provide interim debtor-in-possession financing, 

would help the Bay weather the turmoil. The company said it hoped to secure additional financing in the days ahead.

The company spent the last several years in a state of deterioration as it 

closed several stores 

and carried out several rounds of layoffs.

In orchestrating prior cuts, it cited "challenging headwinds" that made it necessary to slash its workforce and pull out of a store redevelopment at the Oakridge Park shopping centre in Vancouver.

Its Friday court filings showed its financial troubles ran deep.

Jennifer Bewley, the chief financial officer for the Bay's parent company, said in an affidavit filed in court that the business is having trouble making payments to landlords, service providers and vendors and has had to defer certain payments for many months.

Bewley said the company would be days away from failing to meet its payroll obligations, if it doesn't receive more funding. 

It has 9,364 employees, the court filing says.

"Without the benefit of court protection, 

failure by Hudson's Bay to pay rent at its stores 

will result in a rapidly escalating chain of events, 

leading to lease defaults," she added.


Signs of trouble on store floors

In the months leading up to the filing, Hudson's Bay's regression was evident across the department store's floors.

When its crown jewel location on Queen Street West in Toronto closed its Food Wares market, 

it haphazardly filled the food counters 

and display cases with a growing array of Zellers merchandise rather than remodelling the wing.

Even more recently, grocer Pusateri's Fine Foods and coffee purveyor Nescafé decamped, further emptying the store, which has appeared to be in a state of disrepair, with escalators often broken and many departments begging for some TLC.

Hudson's Bay made some tweaks to its product mix last year, bringing in 

Target's kid brand Cat & Jack 

and returning womenswear banners Ann Taylor 

and Loft 

to Canada. 

Yet some felt the changes weren't working.

"I did a walk-through just to see what was going on, and crickets," Liza Amlani, co-founder of the Retail Strategy Group, told The Canadian Press last summer.

"There were no people. 

There was excessive markdowns, 

rails and rails of product, 

which tells me that either the buying team [or] the planning team does not know what the Canadian customer is looking for."

Amlani's comments came when the Bay's parent company was experiencing a glimmer of hope last summer as it purchased Neiman Marcus and its Bergdorf Goodman banner for $2.65 billion US.

The plan was to combine the luxury department stores with the Saks Fifth Avenue and Saks Off 5th chains it already owned into a new entity called Saks Global.

As part of the transaction, e-commerce goliath Amazon and software giant Salesforce were expected to become investors in Saks Global.

Some staff were laid off last week as the company prepared to consolidate its U.S. office space and cut the banner's Dallas flagship.

Meanwhile, its nearest Canadian competitor, Simons, is in growth mode with a $75-million expansion plan. 

The 185-year-old dry goods shop-turned-department store chain will open locations in the Yorkdale and Eaton Centre malls in Toronto, where Hudson's Bay has long been an anchor tenant, later this year.


2008 sale to NRDC Equity Partners

The architect behind most of the Bay's modern history is Richard Baker, an American real estate titan whose National Realty and Development Corp. 

Equity Partners bought the company in 2008 from the widow of late South Carolina businessman Jerry Zucker for $1.1 billion.

Baker took it public in 2012, only to reverse course through a takeover bid that had to be sweetened twice before shareholders accepted it in early 2020, ahead of the COVID-19 pandemic lockdowns.

In the lead-up to the privatization vote, Baker faced criticism for HBC's stock dropping while he was at the helm and for not better utilizing the company's real estate, which includes several prized locations in high-traffic shopping districts.

After privatization was approved, he acknowledged there was work to be done and said it would start with a new website for Hudson's Bay.

"It will take patient capital and a long-term view to fully unleash HBC's potential at the

 intersection of 

real estate 

and retail," 

he said in March 2020.

Court documents say the company "pursued an aggressive e-commerce expansion strategy" that cost $130 million and involved the hiring of 500 people between 2021 and 2022.

By 2023, the documents say Hudson's Bay was in cost-cutting mode, reducing both its workforce and marketing budget to uncover $100 million in savings.

It also sold valuable lease rights and 

reinvested the proceeds into its retail operations 

and tweaked its merchandise assortment and promotions 

to try to stage a turnaround.

The moves improved the company's gross margins, 

but sales still declined by more than 30 per cent year-over-year, the documents say.

  1. When I was 16 my girlfriend got her first job working part time in women's shoes. I can remember picking her up from work. She would show me the stock room. Good times.

    • Comment by james bolt.

      Love their blankets

      • Comment by Hugh MacDonald.

        I thought their products were expensive and appeared to target upscale shoppers. I haven't bought anything from, let alone been in, an HBC store for over 35 years.

        • Comment by james stewart.

          ah yes.

          an organization founded upon unmitigated greed (with a royal charter),

          has succumbed to its founding principle.

          but rest assured.

          Mr Baker will be just fine.

          his handshake will be golden.

          his 9,364 employees?

          not. so. much.

          • Comment by Otto Wagner.

            When they closed the store in Banff the writing was on the wall

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