Hudson’s Bay Store Closures: What This Means for Canada’s Retail Landscape
Canada’s oldest department store chain, Hudson’s Bay, has announced plans for the immediate liquidation of its entire business. Unless a last-minute financial solution emerges, the company is set to wind down operations over the coming months, leaving a significant void in the nation’s retail sector.
Why is Hudson’s Bay Closing?
Retail experts point to a series of missteps that led to Friday night’s announcement. Hudson’s Bay confirmed it would begin liquidating all stores as early as next week, pending court approval. Despite exhaustive efforts to secure financing, the company has been unable to keep any part of its operations afloat.
Founded in 1670, Hudson’s Bay currently operates 80 department stores across Canada. The planned liquidation would mean job losses for 9,364 employees working at Hudson’s Bay stores, as well as three Saks Fifth Avenue and 13 Saks Off 5th locations, which the company owns through a licensing agreement.
If the court approves the liquidation, all stores are expected to close by June 15, 2025.
How Will This Affect Canadian Retail Workers?
Retail industry analysts say the closures will have a profound impact on thousands of employees and the broader retail market.
“It’s really, really sad because so many people are going to be affected by this,” said Liza Amlani, co-founder of the Retail Strategy Group. “It’s an iconic brand, deeply important to Canadians, and its disappearance will create a gap in the market.”
Despite its historic status, Hudson’s Bay had been struggling for years. Many customers noticed a lack of investment in physical stores, including out-of-service escalators and temporary store closures due to issues like malfunctioning air-conditioning. Another long-standing issue was inconsistent store hours that did not align with shopping malls, frustrating both tourists and local shoppers.
Is There Any Hope for Hudson’s Bay?
Although the company faces a bleak future, it remains hopeful that a financial rescue could still be arranged. In a statement, Hudson’s Bay president and CEO Liz Rodbell said they are working to secure capital and are in discussions with key stakeholders, including landlords, to explore alternatives to a full shutdown.
“Our team has worked incredibly hard to identify a viable path forward,” said Rodbell. “We are strengthened by the overwhelming support from customers and associates who have shared heartfelt stories about what Hudson’s Bay has meant to them and their families.”
What Led to Hudson’s Bay’s Decline?
While Hudson’s Bay has deep roots in Canada’s history, the company has been led by American ownership for several decades. In 2008, U.S. real estate mogul Richard Baker’s National Realty and Development Corp. acquired the company for $1.1 billion. Marketing expert Joanne McNeish from Toronto Metropolitan University believes this marked the beginning of the company’s gradual downfall.
“Investment firms are like house flippers,” McNeish explained. “They rarely deal with the underlying business issues. Instead, they take their profit, sell the problems to the next buyer, or break up the company to sell off its assets.”
Baker took Hudson’s Bay public in 2012, only to take it private again in 2020, just before the COVID-19 pandemic. While shareholders initially resisted, many still saw value in the company’s real estate holdings.
“If the management team wasn’t allowed to make financial and strategic investments over the last 17 years, it’s no surprise the company stagnated,” said McNeish. “This ultimately weakened its competitive edge in the retail market.”
What Happens Next?
In documents filed with the Ontario Superior Court of Justice, Hudson’s Bay stated that it plans to sell off assets over the next few months, possibly through an auction if multiple bids arise. The company has secured only limited debtor-in-possession financing, a form of emergency funding used for restructuring under creditor protection.
Without an immediate liquidation across all retail stores, the company does not expect to meet its financial obligations. Given its “limited liquidity,” Hudson’s Bay aims to complete the liquidation by mid-June.
How Much Does Hudson’s Bay Owe?
Court filings reveal that Hudson’s Bay owes over $950 million to a long list of creditors, including landlords, suppliers, and major fashion brands such as Ralph Lauren, Chanel, Columbia Sportswear, Diesel, and Estée Lauder.
Additionally, Unifor, the union representing approximately 320 workers at select Hudson’s Bay locations and its Toronto e-commerce warehouse, has called on the company to honour its legal obligations to workers.
“HBC must act in good faith to ensure workers receive the wages, benefits, and severance they are entitled to under their collective agreements,” said Unifor national president Lana Payne.
What Will Happen to Hudson’s Bay Stores and Mall Spaces?
A full liquidation would leave large, anchor-store vacancies in shopping malls and prime real estate locations across Canada. Hudson’s Bay stores often occupy multiple floors, making them significantly larger than most retailers.
The company has the majority of its locations in Ontario (32 stores), followed by British Columbia (16), Alberta and Quebec (13 each), and two stores each in Manitoba, Nova Scotia, and Saskatchewan.
If Hudson’s Bay disappears completely, landlords will face challenges in filling these large spaces with new tenants.
How Can Employment Lawyers Help If You’re Affected by Hudson’s Bay’s Closure?
With Hudson’s Bay announcing plans for liquidation, thousands of employees are facing uncertainty, from job losses to unpaid wages and severance concerns. If you’re an employee affected by the closure, understanding your rights is crucial.
At Whitten & Lublin, our experienced employment lawyers can help you navigate this difficult transition by:
- Ensuring you receive the severance you’re entitled to under Ontario employment law.
- Helping recover unpaid wages, bonuses, or commissions if the company fails to meet its obligations.
- If Hudson’s Bay files for bankruptcy, employees may become unsecured creditors, meaning they will have to wait in line behind secured creditors like banks and tax authorities. While bankruptcy does not erase an employer’s obligation to pay severance and wages, recovering these amounts can be challenging.
The shutdown of a historic retailer like Hudson’s Bay raises many legal and financial complexities for employees. Our team is here to provide the support and advocacy you need. Contact Whitten & Lublin online or call (416) 640-2667 for expert legal advice.