Canada’s Oldest Retailer, Hudson’s Bay, Faces Uncertain Future Amid Nationwide Liquidation

Hudson’s Bay, Canada’s oldest company, is on the brink of a sweeping liquidation that could begin as early as Tuesday and extend for up to 12 weeks. However, the struggling retailer is still holding out hope for a financial rescue that could alter its fate.

During a critical hearing at an Ontario court on Monday, Hudson’s Bay’s legal team outlined a proposed liquidation plan spanning 80 department stores, three Saks Fifth Avenue locations, and 13 Saks Off 5th outlets across Canada. The move, if approved, would allow the retailer to offload inventory while keeping options open to save some locations should new financing emerge.

“A quick start will maximize the value of the business … and preserve whatever chance there is of a restructuring,” stated Ashley Taylor, a lawyer representing Hudson’s Bay, in front of Ontario Superior Court Judge Peter Osborne.

The courtroom was packed with legal representatives, media personnel, and other observers, underscoring the historic significance of the retailer’s downfall. Hudson’s Bay, which traces its roots back to 1670 and the era of the fur trade, now finds itself struggling to navigate a retail landscape plagued by declining consumer spending, post-pandemic economic shifts, and ongoing Canada-U.S. trade tensions.

The company’s financial struggles have become so severe that it recently deferred payments to landlords, service providers, and vendors. Hudson’s Bay also faced imminent payroll concerns before seeking court protection. The severity of the crisis was further highlighted when a landlord in Sydney, Nova Scotia, allegedly locked the retailer out of one of its stores, and bailiffs attempted to seize merchandise from its Sherway Gardens location in Etobicoke, Ontario.

Initially, Hudson’s Bay planned to restructure by liquidating half of its stores while monetizing key leases. This strategy was to be supported by debtor-in-possession financing, a funding mechanism for companies in distress.

However, in a last-minute blow, the company’s primary financing agreement collapsed just three hours before a scheduled court hearing on March 7. In an emergency effort to secure funds, the retailer managed to obtain $16 million in commitments from U.S.-based investment firm Restore Capital and other lenders, later increasing this to $23 million. Despite this influx, the funds fell short of the company’s needs, forcing it to intensify efforts to secure additional cash.

According to Taylor, Hudson’s Bay has reached out to at least 19 potential lenders and major landlords for financial relief, but so far, these efforts have not yielded results.

If liquidation proceeds, Ontario will bear the brunt of store closures, with 32 locations and the majority of the company’s workforce affected. British Columbia hosts 16 stores, while Alberta and Quebec each have 13. Manitoba, Nova Scotia, and Saskatchewan will see two store closures per province. Saks Fifth Avenue’s Canadian stores are located in Ontario and Alberta, while Saks Off 5th operates in multiple provinces, including Ontario, B.C., Alberta, Quebec, and Manitoba.

The company currently holds approximately $315 million in inventory, and liquidation efforts will extend to Hudson’s Bay’s e-commerce operations until its Scarborough, Ontario, distribution center is emptied. Customers with gift cards have until April 6 to redeem them, as the retailer has already suspended its loyalty program—affecting over 8.2 million Canadian customers with a collective $58.5 million in unused points.

In a last-ditch effort to salvage some assets, Hudson’s Bay is also seeking court approval to initiate a sale process for its properties and intellectual property, including its iconic branding and stripe trademarks. Potential buyers could bid on individual leases or the company’s entire retail operation.

Despite these measures, industry experts remain skeptical about the retailer’s prospects. “Finding a backer will be no easy feat, especially for a company that has struggled with even simple operational issues like maintaining escalators,” noted legal representatives during the hearing.