It’s a sad day for a Canadian retail icon and North America’s oldest company.
Hudson’s Bay Company (HBC) has announced it intends to liquidate its entire business after failing to secure sufficient debtor-in-possession financing to maintain its Canadian business operations.
At a , HBC proposed closing all 96 of its Canadian stores unless it can secure additional financing.
The retailer intends to begin liquidating as early as March 18.
, the retailer, also known as The Bay, announced it would pursue a restructuring transaction under the Companies’ Creditors Arrangement Act (CCAA) as it grappled with crippling debt.
Court documents revealed as of Jan. 1, 2025, Hudson’s Bay had approximately $3 million in cash on hand. The company owed $315 million in trade payables and $422 million in pre-filing secured debt in addition to $724.4 million in mortgage obligations, for an approximate total secured debt obligation of $1.1294 billion.
The Bay owes about $950 million to nearly 1,900 creditors — including landlords, fashion brands, banks and Canadian governments.
‘Full liquidation’ set to begin
In a March 14 , the company revealed it has only secured limited debtor-in-possession financing and that means the full liquidation of the business.
“A store-by-store liquidation process will begin as soon as next week,” Hudson’s Bay noted in the release.
What about gift cards?
The news may leave customers wondering about the status of gift cards.
In an email to Metroland, HBC spokesperson Tiffany Bourre noted HBC gift cards remain valid, but only for a limited time.
“Gift cards can be used up to and including April 6. That is the last day customers can use them,” Bourre confirmed.
Reward points paused
Previous court documents revealed HBC has paused its reward points program.
HBC Mastercard status
Hudson’s Bay Mastercard holders cannot view, earn or redeem points. But cardholders can still earn cashback from Neo Financial when using their HBC Mastercard.
Neo Financial, a digital banking platform, , and until further notice, HBC Mastercard cardholders can earn two per cent cash back on purchases at Hudson’s Bay and one per cent cash back everywhere else.
“No action is needed from you currently — just keep using your card as usual, and stay tuned for steps you may be required to take in the coming weeks,” Neo Financial said online.
The cash back offer is a limited time promotion that can be amended or cancelled by Neo Financial at any time without notice, the company added.
What’s next for HBC?
In its latest news release, HBC said it remains hopeful that key stakeholders, including landlord partners, will explore a viable restructuring path to preserve jobs, tenancy in retail locations, and a company with deep historic significance before it is too late.
“This alternative would necessitate significant capital and immediate and substantial co-operation from landlords and other critical partners,” HBC said in the release.
Hudson’s Bay employs approximately 9,364 people nationwide at 80 stores, the company added in the release. The company also includes , three Saks Fifth Avenue and 13 Saks OFF 5TH stores operating in Canada under Hudson’s Bay Company ULC.
The closure of Hudson’s Bay would remove an anchor tenant from shopping malls across Canada.
The Bay has 32 Ontario stores.
Securing support
HBC noted it is focused on securing support to preserve as many jobs as possible, while maintaining its long-standing position in Canadian culture and the economy.
“Our team has worked incredibly hard to identify a viable path forward, and our resolve is strengthened by the overwhelming support from customers and associates who have shared heartfelt stories about Hudson’s Bay and what our stores have meant to them, their families, and their communities across the generations,” said Liz Rodbell, HBC president and CEO.
When liquidation could begin
The store liquidation process could begin as early as this week, HBC said. The Bay, plus Canadian Saks Fifth Avenue and Saks Off 5th stores will remain open to serve customers. will continue to provide e-commerce options.
Once the liquidation sale begins, all sales will be final, HBC said.
The company intends to conclude the liquidation process by June 15.
What went wrong?
Ragini Bhalla, head of brand and spokesperson for , a company that provides business credit reports, said HBC’s cash flow issues have been prevalent for the last six months.
The company had been paying its suppliers nearly two months late and HBC had a high number of outstanding bills that were more than 91 days past due in 2024, Bhalla noted.
HBC has cited ongoing retail industry challenges, coupled with internal liquidity issues, as the driving forces behind its CCAA application, Bhalla added.
“The restructuring move follows similar patterns seen in other major retailers that have faced cash flow constraints and mounting debt. With suppliers already facing non-payments and a prolonged period of (late bill payment) volatility, the company’s ability to maintain vendor relationships and sustain operations under its current model remains uncertain,” Bhalla said in an email to Metroland.
Bhalla referenced “days beyond terms” or DBT, the average number of days a firm pays its bills past the invoice due date.
“If DBT levels continue to remain high post-restructuring, it could indicate deeper operational challenges that extend beyond short-term financial restructuring,” Bhalla noted.
HBC faces extinction
While Hudson’s Bay Company has been a part of Canada’s commercial landscape since 1670, Canada’s oldest retailer now faces extinction due largely to changing consumer habits.
In a recent interview, Marvin Ryder, associate professor of marketing at McMaster University, said HBC’s business hasn’t been healthy for more than a decade.
He noted consumers have changed their buying habits and now prefer to deal with specialty stores rather than general merchandise stores, like The Bay.
An exception is Walmart, which offers a wide range of department store goods but also acts as a grocery store in its Supercentres.
While other department-style stores have persevered, such as Dollarama and Canadian Tire, Ryder noted they tend to offer a more curated selection of products to appeal to a specialty store market.
“The problem the Bay has is they are in very big stores,” said Ryder. He suggested the stores could reduce costs by cutting floor space and offering a more curated product selection. But Ryder noted HBC may be locked into long-term leases it can’t easily renegotiate.
- With files from the Toronto Star
Error! Sorry, there was an error processing your request.
There was a problem with the recaptcha. Please try again.
You may unsubscribe at any time. By signing up, you agree to our and . This site is protected by reCAPTCHA and the Google and apply.
Want more of the latest from us? Sign up for more at our newsletter page.
To join the conversation set a first and last name in your user profile.
Sign in or register for free to join the Conversation