Hudson’s Bay is pushing for court approval to begin liquidating all its stores as early as Tuesday, while still searching for potential financial lifelines. However, Ontario Superior Court Justice Peter Osborne has delayed making a ruling, stating he needs more time to review the case.
The embattled retailer is seeking permission to liquidate its 80 department stores, three Saks Fifth Avenue locations, and 13 Saks Off 5th outlets in Canada. The proposed plan allows for some stores to be removed from liquidation if financing is secured within the expected 10 to 12-week sell-off period.
During Monday’s hearing, Osborne acknowledged the complexity of the case, noting that he must ensure that selling off assets does not eliminate Hudson’s Bay’s ability to restructure and survive. The courtroom was packed with lawyers, media, and observers, reflecting the historic significance of the retailer, which dates back to 1670.
Hudson’s Bay filed for creditor protection on March 7, citing financial struggles due to weak consumer spending, trade tensions with the U.S., and declining foot traffic post-pandemic. The company admitted it had deferred payments to landlords, service providers, and vendors and was close to missing payroll obligations.
In court filings, Hudson’s Bay CFO Jennifer Bewley reported that the retailer had been locked out of a store in Sydney, N.S., by a landlord and had faced merchandise seizures at its Sherway Gardens location in Toronto.
Initially, the retailer planned to restructure by closing half of its stores while monetizing prime-location leases. However, an anticipated financing deal collapsed hours before the March 7 court hearing, leaving the company scrambling for alternatives. U.S.-based investment firm Restore Capital and other lenders later provided $23 million in funding, but it was insufficient to support the business without a full liquidation.
Hudson’s Bay has since approached 19 potential lenders and major landlords for financial assistance but has so far been unsuccessful. Employee representatives opposed the liquidation, warning it could become a “self-fulfilling prophecy,” leading to one of Canada’s largest mass layoffs since Sears Canada’s collapse.
The liquidation would affect all Hudson’s Bay stores, its four distribution centers, and its online business, which will continue until the Scarborough, Ont., warehouse is emptied. Ontario will be the hardest hit, with 32 store closures, while British Columbia, Alberta, Quebec, Manitoba, Nova Scotia, and Saskatchewan will also be affected.
Additionally, Hudson’s Bay announced it will stop accepting gift cards after April 6 and has already paused its loyalty program, leaving 8.2 million customers with a combined $58.5 million in unused points that can no longer be redeemed.
As part of its strategy, the company is seeking court approval to find buyers for its assets, including store leases, brand trademarks, and intellectual property. Despite the challenges, Hudson’s Bay has pledged to continue searching for financing, casting “the net as wide as possible.”
Retail experts suggest the company’s best chance of survival lies in downsizing to a smaller, more customer-focused model, offering exclusive product mixes, immersive shopping experiences, and high-quality service.
Osborne is expected to rule on the case soon, as the company faces mounting financial pressure and an uncertain future.
