An undated photo shows the entrance to the Hudson’s Bay store in downtown Toronto. Canada’s oldest retailer has filed for creditor protection and plans to restructure. (Nathan Denette/Canadian Press)
Hudson’s Bay Co., Canada’s oldest retail chain, has filed for creditor protection, aiming to restructure its operations and stay afloat. The department store giant, established in 1670, has been grappling with financial troubles due to sluggish consumer spending, trade tensions between Canada and the U.S., and declining foot traffic in city centers after the pandemic.
Company president and CEO Liz Rodbell acknowledged the difficulty of the decision but emphasized its necessity to ensure the brand’s longevity in Canada’s evolving retail landscape. “This step is crucial to safeguarding our future, especially as many competitors have shut down,” she stated.
Plans to Revamp and Survive
In its filing with the Ontario Superior Court of Justice, Hudson’s Bay revealed plans to explore various strategies to strengthen its business. While the process could lead to closures or a sale, the company remains focused on keeping most of its 80 locations open.
The retailer sells a wide range of products, including apparel, home essentials, cosmetics, and furniture. It also operates three Saks Fifth Avenue stores and 13 Saks Off 5th locations in Canada under a licensing deal, which will continue running as usual.
The Bay previously closed another Toronto location at Bay and Bloor Streets in February 2022. (Nathan Denette/The Canadian Press)
Tariff Troubles and Financial Strain
Hudson’s Bay’s troubles have been exacerbated by trade policies. Ongoing tariff threats from the U.S. have unsettled investors and disrupted potential financial deals. Rodbell noted that these uncertainties derailed crucial negotiations meant to secure liquidity.
To navigate the crisis, Hudson’s Bay has secured a $16 million advance from Restore Capital, a U.S.-based investment firm, alongside commitments from other lenders. The company hopes to secure additional funds soon.
Despite efforts to cut costs by closing stores and reducing staff in recent years, financial difficulties have continued to mount. Court documents reveal that the company has delayed payments to landlords, suppliers, and service providers for months. Without immediate financial support, it risks failing to meet payroll for its 9,364 employees.
Visible Signs of Decline
Shoppers have noticed Hudson’s Bay’s struggles firsthand. Its flagship Toronto store has seen major retailers like Pusateri’s Fine Foods and Nescafé pull out. The space once occupied by a high-end food market now holds Zellers merchandise, filling shelves without a clear strategy. Broken escalators and neglected departments further paint a picture of a brand in distress.
Last year, the company introduced Target’s Cat & Jack kids’ brand and revived women’s fashion lines Ann Taylor and Loft, but sales remained weak. Retail expert Liza Amlani noted the lack of foot traffic and excessive discounts, suggesting a disconnect between the brand and Canadian shoppers.
A Storied Past and an Uncertain Future
Hudson’s Bay has seen many transformations over the years. Richard Baker, a U.S. real estate mogul, acquired the company in 2008 and took it public in 2012 before privatizing it again in 2020. Since then, efforts to modernize the business, including a costly $130 million e-commerce expansion, have yet to yield sustained growth.
Despite attempts to cut costs and improve profit margins, the company saw a staggering 30% drop in sales last year. As competitors like Simons expand, Hudson’s Bay faces an uphill battle to reclaim its former dominance.
