Hudson’s Bay Company (HBC) is in full liquidation mode and continues to actively seek creditor protection to avoid a fate comparable to that of other defunct department store chains like Eaton’s, Zellers, and Sears.
Attorneys representing the struggling retailer told an Ontario court the liquidation process may encompass all 80 of its stores, in addition to three Saks Fifth Avenue locations and 13 Saks Off 5th outlets in Canada, which are operated under a licensing agreement.
The approach proposed by Hudson’s Bay would permit the retailer to exclude certain stores from the liquidation process, as long as it acquires the necessary creditor financing within the anticipated 10- to 12-week liquidation timeframe.
The process could mean job losses for the 9,364 employees the company has in its Canadian stores, but president and CEO Liz Rodbell says the company is still holding out hope.
Ian Lee, a former banker and a business professor at Carleton University, described the outcome as unsurprising.
“I do believe they’re not going to be saved,” Lee told The Epoch Times.
“Hedge funds and venture capitalists haven’t come forward. They’ve looked over the bones, they’ve looked over the carcass of Hudson’s Bay, and they’ve decided it’s not salvageable. There’s not enough value in the company to turn around.”
HBC worked with potential investors earlier this year to refinance a portion of its credit facilities to improve its liquidity while also bolstering its business plan, but the likelihood of U.S. tariffs has been an issue, Rodbell said.
“The threat and realization of a trade war has created significant market uncertainty and has impacted our ability to complete these transactions,” she said, adding that the company continues to look for other stakeholders to help preserve and strengthen its business.
But HBC’s problems started long before the threat of U.S. tariffs materialized, Lee noted, adding that a failure to engage younger generations and tap into the e-commerce segment was the beginning of the company’s demise.
“They weren’t connecting with the younger generation, so they really missed the boat on e-commerce,” he said. “Then the pandemic came along that really hurt retail very, very badly, and I think that was one more nail in the coffin.”
The Epoch Times contacted HBC for comment but didn’t receive a response by publication time.
Company Downfalls
If HBC does manage to find investors to help it restructure, it will achieve what Canadian companies Eaton’s and Zellers (most recently a Bay subsidiary) could not.Eaton Company Ltd. was a prominent Canadian department store that established a retail footprint across all provinces at the peak of its operations. It started humbly in Toronto in 1869, but by the 1930s, employed more than 25,000 people and controlled nearly 60 percent of department store sales in Canada.
The late 20th century brought a shifting economic and retail environment that led to the chain’s bankruptcy in 1999. Sears Canada acquired its assets in 1999, after which the stores were either rebranded as Sears locations or closed down in 2002.
Zellers, while not as old as Eaton’s, enjoyed a similar success story in the 1900s. The popular Canadian discount store chain was founded by Walter P. Zeller in 1931 and, within 25 years, operated 60 stores and employed 3,000 people.
Hudson’s Bay Company acquired Zellers in 1978, and following a number of acquisitions and expansions, the chain reached its peak with 350 locations in 1999.
HBC announced the sale of lease agreements for up to 220 Zellers stores in January 2011 to the U.S. chain Target, with the transaction valued at $1.825 billion.
This marked the onset of Zellers’ decline, and all of its stores had closed their doors by 2013. HBC made an effort in 2023 to revive the Zellers brand in select locations, but with the parent company now in a precarious financial situation, it appears that comeback will be short lived.
Sears Canada shared a similar fate to Eaton’s and Zellers.
A partnership between the Canadian department store chain Simpsons and the American retail giant Sears led to Simpsons-Sears being established in Toronto in 1952. The Simpson side of the business was purchased by HBC in 1978 but the company later sold its shares to Sears and the company was rebranded in 1984 as Sears Canada.
At the pinnacle of its operations, Sears Canada operated 125 full-line department stores, as well as a number of Sears Home and Sears Outlet stores, but financial problems led the company to file for creditor protection in June 2017. All stores were closed by the following January.
HBC’s Long History
Unlike Eaton’s, Zellers, and Sears Canada, HBC has managed to tread water in a vastly competitive market of online retailers such as Amazon and mega corporations like Walmart.Also, unlike the other shuttered department stores, HBC boasts a history that dates back to the 1600s.
It holds the distinction of being the oldest incorporated joint-stock merchandising company within the English-speaking world, with a history closely linked to the colonization of British North America and the subsequent development of Canada.
After being chartered as a fur-trading enterprise in 1670, the company was awarded exclusive rights to engage in trade and commerce across a vast territory then referred to as Rupert’s Land, which includes present day Hudson Bay and a large surrounding region.
This privilege not only granted HBC a monopoly in business operations but allowed it to serve as the de facto government in Rupert’s Land for nearly two centuries.
The company dominated the fur trade across a significant portion of North America during this time and used its now renowned striped wool blankets as currency when acquiring furs from indigenous peoples.
HBC relinquished control of Rupert’s Land to Canada in 1869 and went on to reinvent itself as a mercantile business. By the middle of the 19th century, the company was offering furs, blankets, and high-quality home goods in a small number of stores across Canada.
The HBC blanket also underwent a makeover during this time, evolving from the original single-stripe white blanket to the green, red, yellow, and indigo striped blanket the company still sells to this day.
The company expanded over the years, becoming known for higher-end products and luxury brands. It acquired Saks, Inc. in 2013 and owned and operated 239 department stores across Canada and the United States until last year when it purchased Neiman Marcus and Bergdorf Goodman.
The company undertook a strategic move in 2024 by transferring its luxury retail assets, which included Saks Fifth Avenue and Neiman Marcus, to a newly created entity referred to as Saks Global.
The move left Hudson’s Bay as its own business, operating 80 department stores in Canada.
What’s Next?
Creditor protection has emerged as a prevalent strategy among Canadian companies striving to sustain their operations in the wake of the pandemic, which saw a significant increase in online shopping and a decline of in-store shopping due to work-from-home policies.The process has been used in recent years by Mastermind Toys, The Body Shop Canada, Ricki’s and Cleo. The companies remain operational today under new ownership but closed certain stores as part of their creditor protection proceedings.
Peter J. Osborne of the Superior Court of Justice in Ontario granted the requested relief, noting in his ruling that HBC is facing “a severe liquidity crisis” that required “immediate access to debtor-in-possession financing to continue operating.”
The judge was also slightly nostalgic in his ruling.
“It is hard not to have a sense of melancholy when considering the Application before me,” he wrote, noting that “the oldest company in North America” is insolvent after approximately 355 years in business.
Lee was also nostalgic when discussing HBC, saying his mother took him shopping for clothing at its stores when he was growing up in the 1960s. At the time the business was thriving, he said, but the chain’s inability to change has led to its downfall.
If HBC found investors willing to offer the company a lifeline, it would need to move away from higher-end and luxury brands, Lee said, noting that Canada is largely a middle-class country.
“Luxury brands have not done well in Canada, because there just aren’t a lot of really wealthy, rich people that would support a luxury brand,” he said. “[HBC] never really understood that.”
The company would also need to appoint a younger CEO—perhaps someone in their 30s—who has their finger on the pulse of the type of shopping experience the under 50 crowd wants and scrap its longtime department store model, he said.
With the exception of Walmart, most multi-purpose stores are failing, he added, pointing to JC Penney and Macy’s in the United States as examples.
“I think the heyday of the big department store, the multi-purpose, all things to all men and all women store—that’s going to become extinct,” Lee said. “They have to go to much smaller spaces and focus on just a few product lines, the ones that are moving.”
