Canadian Department Store Owner Seeks Permission To Start Liquidating Stores

Hudson’s Bay Co., a Canadian retail owner founded in 1670, is asking a judge for permission to start liquidating all of its stores, a process that could begin as early as this week.

HBC owns 80 namesake department stores, 13 Saks Off Fifth stores, three Saks Fifth Avenue stores — all in Canada — and an e-commerce platform. The Saks stores in the U.S. are separately owned and not affected by the liquidation. 

The company filed for creditor protection earlier this month and announced Friday that despite “exhaustive efforts,” the proceedings have not yielded the financing to pursue a restructuring effort and it would need to begin liquidation of its entire business.

At the same time, HBC said it still has hope that its stakeholders, especially its landlord partners, can work to facilitate a viable restructuring “before it is too late.” That restructuring could allow it to hold onto some of its stores, CBC reported. 

“This alternative would necessitate significant capital and immediate and substantial cooperation from landlords and other critical partners,” the release said.

In a packed courtroom Monday, HBC's lawyer restated that argument to the judge, Bloomberg reported, asking that the court grant HBC permission to start selling quickly to give the company the best chance it has at restructuring. 

HBC owes about C$1.1B, or $770M, in secured debt, per Bloomberg.

As HBC's situation unfolds, a REIT with close ties to Hudson’s Bay is weighing in. 

RioCan Real Estate Investment Trust is a landlord to HBC and a partner in a $249M joint venture with the firm. It said in a release Tuesday that “it is essential that any restructuring steps are on fair and balanced terms.” 

To protect its shareholders, the REIT said it “will pursue all available business and legal avenues, and will leverage its extensive leasing and development capabilities to achieve the best possible outcome for each of the properties within the JV.”

HBC filed for creditor protection under Canada’s Companies’ Creditors Arrangement Act on March 7, citing trade and financing uncertainty, postpandemic consumer shifts and economic headwinds impacting consumers.