A Hudson’s Bay store in Toronto is pictured (Photo credit: Nathan Denette, The Canadian Press)
A major business deal involving Hudson’s Bay and a B.C.-based entrepreneur has hit a wall. Recent court documents reveal that landlords strongly oppose transferring leases to the new buyer, putting the entire plan in jeopardy.
Entrepreneur Christine Liu struck an agreement with Hudson’s Bay to buy up to 28 store leases across British Columbia, Alberta, and Ontario, including locations under the Saks banner. But a new report filed by Alvarez & Marsal Canada Inc., the court-appointed monitor overseeing Hudson’s Bay’s creditor protection case, shows that landlords are pushing back—hard.
Of the 25 lease agreements Liu is eyeing, landlords representing 23 of them have made it clear they don’t support the handover. In fact, they’ve already expressed their intent to block any forced transfer of those leases, even if a court gets involved.
Neither Liu nor Hudson’s Bay chose to comment publicly.
Liu gained attention when she purchased three leases at malls she already owns: Tsawwassen Mills, Mayfair Shopping Centre, and Woodgrove Centre—all in B.C. She paid $2 million for each. These deals are scheduled to be reviewed in court soon, but the broader set of 25 leases has yet to be formally presented to Judge Peter Osborne, as Hudson’s Bay scrambles to get landlord approval.
The landlords’ exact reasons for resisting the deal weren’t detailed in earlier filings. However, Liu’s vision for the properties may be a sticking point.
She plans to launch a fresh line of department stores under her name, combining traditional retail with modern amenities. Her stores will offer makeup, jewelry, and fashion, while also including kid-friendly play areas, restaurants, and entertainment spaces. But it's unclear if the current lease terms allow such diverse activities. If not, Liu would need the landlords to agree to modify the agreements—a tough ask given their current stance.
Despite the resistance, Liu’s legal team is actively working to ease concerns by sharing more detailed information about her plans.
Under the Companies’ Creditors Arrangement Act, Hudson’s Bay does have a legal option: they can ask the court to override the landlords' objections and assign the leases to Liu. But for this to work, the court needs to be convinced that Liu can meet all obligations in the lease contracts and that the court monitor supports the move.
Meanwhile, Alvarez & Marsal revealed that Hudson’s Bay has also been trying to offload other leases. One unnamed buyer is interested in eight leases spread across Ontario, Alberta, Saskatchewan, and Manitoba. In another case, the company is close to finalizing a deal with a landlord to sell a lease for $250,000.
There was one more lease deal on the table, but it collapsed after the buyer failed to fix errors in the contract and eventually walked away.
These efforts to shed leases come months after Hudson’s Bay sought creditor protection in March due to overwhelming debt. The company later sold its iconic brand name and trademarks to Canadian Tire for $30 million and shut down all its remaining stores by the end of May.
According to Alvarez & Marsal, liquidation sales brought in $349.3 million for the retailer. Of that, $104 million came from consignment items, $43.9 million from products sold through a consultant, and $12.7 million from furniture and equipment. However, higher-than-expected gift card use and lukewarm furniture sales cut into those gains.
