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The Looming Liquidation
Bankruptcy Sale Initiated Across All 80 Hudson's Bay Stores in Canada, Effective Immediately
The potential liquidation of all 80 Hudson's Bay stores in Canada, along with three Saks Fifth Avenue and 13 Saks Off 5th Avenue locations there, could kick off today if a financial lifeline isn't found - a prospect that seems increasingly improbable, as CBC reports.
Key Points
On March 7, Hudson's Bay Company applied for creditor protection under the Companies' Creditors Arrangement Act (CCAA), the Canadian counterpart to Chapter 11 bankruptcy, in search of additional financing to restructure their operations.
Initially, plans were to shutter around half of the company's operations, but on March 14, Hudson's Bay Co. announced it would pursue full liquidation unless an alternative financial solution was found promptly.
In court hearings on March 17, Hudson's Bay lawyer Ashley Taylor stated that the company aimed to initiate liquidation immediately to maximize business value and preserve the slight chance of a restructuring.
As many as 9,300 employees will be affected by the closures, and the institution's storied history will come to an end. Founded in 1670 to trade striped wool blankets for beaver pelts, Hudson's Bay continues to sell this iconic item today.
Background
Hudson's Bay is owned by American real estate tycoon Richard Baker. His NRDC Equity Partners investment firm acquired the retailer in 2008 and combined it with Lord & Taylor, acquired in 2006, and Saks Fifth Avenue, which was added to HBC's holdings in 2013. In 2020, the company went private under Baker's watch. At the year's end, HBC acquired Neiman Marcus Group, and Hudson's Bay Company and Saks Global were spun off as separate entities with Baker serving as chair for both. Saks Global encompasses Saks stores, the Saks Off 5th Avenue chain, its standalone Saks e-commerce, the flagship Neiman Marcus stores, and Bergdorf Goodman.
Real Estate and Retail Holdings
Throughout the years, Baker has been open about his interest in retail stemming from its real estate aspects. He has remarked, "HBC is primarily a real estate company."
A Chequered Retail Past
Baker's background lies in real estate, and his retail operations have met with mixed results at best. He previously sold off the Lord & Taylor operations to Le Tote for $100 million before the department store went out of business. He also acquired Germany's Galeria Kaufhof chain in 2015, which did not fare well and was sold off in 2019.
Crucial Quote
According to The Robin Report's Warren Shoulberg, Richard Baker qualifies as yet another retail interloper motivated by real estate interests, following in the footsteps of Robert Campeau and 'Fast Buck' Lampert.
The Uncertain Future
A last-minute financial lifeline to avoid liquidation could still emerge:
- Financial Pursuits: Despite the company's challenges, Hudson's Bay has approached 19 potential lenders and major landlords for rent concessions but didn't find any takers.
- Job Loss Concerns: Legal counsel representing employees appealed for a week's delay in the liquidation process to minimize job losses, as it could amount to the largest mass layoff in the country since Sears Canada.
- Lack of Response: Hudson's Bay Co. did not respond to a request for comment regarding the situation.
Ontario Superior Court Judge Peter Osborne expressed concerns about the situation, stating, "I want to ensure we haven't sold the jewels in the crowns, so we can make a better outcome possible." A decision regarding the company's future is expected soon.
Extra Reading
- Hudson's Bay Liquidation to Start as Early as Tuesday (CBC, 3/17/2025)
- Hudson's Bay, Canada's Oldest Retail Chain, Nears Bankruptcy (Wall Street Journal, 3/7/2025)
- Richard Baker Brings Real Estate Back to Retail (WWD, 10/31/2017)
- HBC Raises $340M Through 'Real Estate Monetizations' (WWD, 11/19/2023)
- Forbes: Hudson's Bay Cites Tariffs as it Enters Canadian Chapter 11
- Forbes: Saks Closes Neiman Marcus Headquarters and Tells Vendors Payments Will Be Late
Enrichment Data:
Current Financial Situation of Hudson's Bay Company
Facing significant financial duress, Hudson's Bay Co. is indebted to numerous creditors, such as landlords and major brands like Ralph Lauren and Estee Lauder, to the tune of $950 million[2]. Despite a brief sales surge in early March that temporarily eased financial pressure, the future remains uncertain[1].
In the latest development, if no financial lifeline is found, the company plans to liquidate a majority of its operations, including its 80 Hudson's Bay stores, three Saks Fifth Avenue stores, and 13 Saks Off 5th stores in Canada[2]. If successful, employee attrition will affect over 9,300 workers and disrupt the local communities.
The prospect of finding a financial lifeline is uncertain, but not entirely ruled out. Continuing negotiations with landlords to restructure and save six flagship stores is underway[1]. However, the success of these negotiations remains uncertain, and time constraints are pressing[1].
Securing the necessary financing for a broad restructuring plan has proven elusive for Hudson's Bay thus far[2][3].
Hudson's Bay Company may initiate liquidation of all 80 stores in Canada without a financial lifeline by 2025, affecting over 9,300 employees, unless an alternative solution is found. Richard Baker, the company's owner, has pursued real estate interests in retail, with mixed results, as evidenced by previous sales and acquisitions. The possibility of securing financial assistance from potential lenders and major landlords remains uncertain.
