Canada’s oldest department store, the iconic Hudson’s Bay, is the latest shopping mall anchor to fall to a shifting market dynamic fueled by e-commerce. At the time of writing, the company was trying to get a court order that would allow it to liquidate its stores, which pertains to its relationship with RioCan Real Estate Investment Trust, one of Canada’s largest REITs and a partner in several joint ventures that operate HBC stores in prime locations.
The retailer has asked an Ontario court to temporarily exempt it from making payments linked to the joint venture as it restructures, which RioCan responded to by saying it was “essential that any restructuring steps are on fair and balanced terms,” and in the meantime it is “pursuing all available business and legal avenues,” as a mutually beneficial agreement is worked toward.
Hudson’s Bay is seeking an extension of its creditor protection into June, which would give it time to start to liquidate some of its stores and monetize certain retail leases of value to regain financial stability. If granted, it would be able to sell items like inventory, furniture, and equipment from its 96 stores in Canada to begin to pay back creditors. Certain stores can be excluded from the liquidation process. It first sought protection on March 7, an application that received same-day approval.
In the meantime, while it awaits the court’s decision, the company is working with key stakeholders to find alternative paths forward that could save jobs and tenancy in certain locations, but this would be capital intensive which may not work in the company’s favour. The closures will impact 9,360 employees.
