Retail Giant Seeks Approval to Sell Off Inventory Amid Financial Crisis
Hudson’s Bay seeks court approval for full liquidation as financial struggles push the retailer to the brink
TORONTO, ON – The future of Hudson’s Bay hangs in the balance as the embattled retailer awaits a court decision on its request to begin liquidating all 80 of its Canadian stores, along with Saks Fifth Avenue and Saks Off 5th locations it operates under a licensing agreement.
During a Monday hearing at Ontario Superior Court, lawyers for Hudson’s Bay urged Justice Peter Osborne to approve the liquidation, arguing that the company needs to offload its inventory over the next 10 to 12 weeks to survive. However, Osborne postponed a ruling, stating he needed more time to assess the situation.
“It has been a lengthy day, to put it mildly, and it is going to be a longer night as well,” Osborne remarked before adjourning.
The courtroom was packed with lawyers, creditors, and observers, reflecting the high stakes for a company that dates back to 1670.
Hudson’s Bay’s Financial Struggles and Failed Rescue Plans
Hudson’s Bay filed for creditor protection on March 7, revealing it was on the brink of insolvency due to subdued consumer spending, U.S.-Canada trade tensions, and declining mall traffic. The company admitted it had deferred payments to landlords, service providers, and vendors and was days away from being unable to pay employees.
Initially, Hudson’s Bay planned to restructure by liquidating only half its stores while monetizing its prime-location leases. However, a last-minute collapse of its financing deal forced it to seek full liquidation.
A temporary financial lifeline came from Restore Capital, a U.S.-based investment firm, which—along with other lenders—offered $23 million in emergency funding. But this amount fell short of the retailer’s needs, pushing it to accelerate efforts to find additional financing.
“To date, the company’s efforts have failed,” said Hudson’s Bay lawyer Ashley Taylor, explaining why liquidation is now the only viable option.
Potential Impact on Employees and Consumers
The liquidation would be one of the largest retail closures in Canadian history, rivaling Sears Canada’s collapse in 2017.
- Ontario would be hit hardest, with 32 locations closing.
- British Columbia (16), Alberta (13), Quebec (13), Manitoba (2), Nova Scotia (2), and Saskatchewan (2) would also see closures.
- Saks Fifth Avenue and Saks Off 5th locations across Ontario, Alberta, B.C., Quebec, and Manitoba are also at risk.
Lawyers representing Hudson’s Bay employees opposed the liquidation, warning it would lead to mass layoffs and effectively eliminate any chance of restructuring.
“Once liquidation starts, it becomes a self-fulfilling prophecy,” said Andrew Hatnay, a lawyer for the employees. “The business will be finished.”
Consumers will also feel the impact. The company will stop accepting gift cards after April 6, and its loyalty program—held by 8.2 million customers with $58.5 million in points—has already been paused.
The Road Ahead: Is There Hope for Hudson’s Bay?
Justice Osborne expressed concern that approving liquidation could leave no path for Hudson’s Bay to recover. He also questioned whether selling off its brand assets and prime retail leases would doom the company.
The retailer is still pursuing buyers for its properties, intellectual property, and trademarks, including its iconic HBC stripes. However, retail experts suggest a full revival would be difficult.
“Depending on who—if anyone—provides financing, I don’t foresee HBC continuing in the same format,” said Lanita Layton, a former Holt Renfrew executive.
Some analysts believe Hudson’s Bay’s best chance is to downsize into a leaner, more experience-focused retailer that meets today’s consumer expectations. But with liquidation looming, time is running out.
A ruling on Hudson’s Bay’s fate is expected soon.
