Dive Brief:
- Hudson’s Bay Co. plans to liquidate after failing to secure sufficient financing for a restructuring transaction following “exhaustive efforts,” the Canadian department store chain said in a Friday statement. The company filed for the U.S. equivalent of bankruptcy protection last week.
- The retailer is still seeking to engage with key stakeholders — specifically its landlords — to restructure instead of going out of business. Hudson’s Bay operates 80 namesake stores, TheBay.com and is a licensed operator of 13 Saks Off 5th and three Saks Fifth Avenue stores.
- If no deal is reached, pending court approval, the retailer plans to begin inventory and furniture, fixtures and equipment liquidation sales on Tuesday. The liquidation process is expected to conclude by June 15.
Dive Insight:
After more than 350 years in business, Hudson’s Bay is on track to become part of North America’s retail past in 90 days unless a last-minute financial agreement to save the business materializes.
“Our team has worked incredibly hard to identify a viable path forward, and our resolve is strengthened by the overwhelming support from customers and associates who have shared heartfelt stories about Hudson’s Bay and what our stores have meant to them, their families, and their communities across the generations,” Hudson’s Bay President and CEO Liz Rodbell said in a statement.
In its initial filing earlier this month with the Ontario Superior Court of Justice, the retailer sought and received court protection from its creditors. Hudson’s Bay said the consumer economics of the post-pandemic era, along with the Trump administration’s ongoing tariff trade war with Canada, Mexico and China, contributed to its untenable business situation.
As of Jan. 31, the company had about 415 Canadian dollars ($290 million) of inventory on its balance sheet. The liquidation sales will run concurrently at all of the company’s 96 stores across seven provinces, along with its e-commerce operations. Hudson’s Bay operates four distribution centers and employs about 9,300 people.
The court approved CA$16 million in debtor-in-possession financing.
“While the applicants remain hopeful that a restructuring solution may still be identified that will see the company continue as a going concern, the only DIP financing that the company was able to secure (despite discussions with various potential financing providers) requires the applicants to immediately commence a full liquidation sale at all of its retail stores,” Chief Financial Officer Jennifer Bewley said in court documents.
Rodbell said the company is still pursuing “every possible opportunity to secure the necessary support from key landlords and other stakeholders” to save Hudson’s Bay. Court documents show a joint venture, composed of Hilco, Gordon Brothers Canada, Tiger Asset Solutions Canada and GA Capital Solutions, will serve as the liquidation consultant. Jones Lang LaSalle will serve as the lease monetization consultant.
“The closure of Hudson's Bay would mark the loss of a key employer and retailer while drastically altering the dynamics of malls nationally by removing a major anchor and driver of customer traffic,” the retailer said in a Friday statement. “The company is focused on securing the support needed to preserve as many jobs as possible while maintaining its longstanding position in Canadian culture and the economy.”
