Who owns Hudson’s Bay and why the company is going out of business

Article content

Hudson’s Bay, a retailer with roots in Canada dating back more than 350 years, is facing liquidation after failing to secure the financing it needs to keep its stores open.

The department store chain, which labels itself as Canada’s oldest company, fought to avoid a full shutdown in a Toronto courtroom on Monday. A lawyer for the company said the retailer’s efforts to resolve its cash crisis have “failed” and that without a workable solution for creditors and landlords, the company would be forced to fully liquidate.

Article content

The news has many mourning the potential loss of 9,000 jobs and a brand that has been part of the country’s history for centuries. However, while Hudson’s Bay has long been a symbol of Canadian retail, it has not been Canadian-owned for years. Here’s what you need to know about Husdon’s Bay.

How long has Hudson’s Bay existed?

Hudson’s Bay is older than Canada. It was established in 1670 as a fur trading company under a royal charter from England’s King Charles II. At its height, it controlled vast parts of what would become Canada, operating trading posts and engaging in commerce with First Nations.

The company transitioned into retail in 1881, when it opened its first department store in Winnipeg. Over the following decades, Hudson’s Bay expanded across the country, becoming one of Canada’s most recognized brands and a frequent outfitter for Canada’s Olympic team.

Who owns Hudson’s Bay?

Hudson’s Bay is owned by NRDC Equity Partners, a U.S.-based private equity firm founded by real estate investor Richard Baker. NRDC acquired the retailer in 2008.

Although Hudson’s Bay has continued to operate in Canada, its decision-making and corporate ownership have been based outside the country for years.

Article content

Article content

In 2020, Hudson’s Bay was taken private, meaning it was no longer publicly traded on the Toronto Stock Exchange. The move ended its status as a Canadian-controlled company, though its branding remained focused on Canada.

Why is Hudson’s Bay going out of business?

Hudson’s Bay cited multiple factors in court filings as reasons for its financial troubles, including:

• Declining consumer spending: Inflation and economic uncertainty have led to reduced discretionary spending.

• Post-pandemic retail struggles: Many downtown locations have seen lower foot traffic since the COVID-19 pandemic.

• Increased competition: Online retailers such as Amazon and fast-fashion brands have drawn customers away.

• High operating costs: Many of the Hudson’s Bay stores are in expensive real estate locations, putting pressure on finances.
• Failed restructuring efforts: The company has tried to find new investors or financing, but has been unable to secure a viable path forward.

Who does Hudson’s Bay owe money to?

Hudson’s Bay is nearly $1 billion in debt and has filed for creditor protection. The company owes $950 million to almost 2,000 creditors, including major brands, such as Nike Canada, Ralph Lauren and Adidas Canada, according to the CBC.

Article content

Court filings show that Hudson’s Bay had just $3 million in cash at the start of the year and carries $1.1 billion in secured debt, including $724.4 million in mortgages. It also owes more than $1 million to Canada Post and is in debt to several municipalities and government agencies. The amount owed to employees has yet to be determined.

CBC reported that secured creditors, such as banks, will be prioritized for repayment as they hold company assets as collateral, while unsecured creditors — including suppliers and employees — may receive only a fraction of what they’re owed. Employees terminated during the process will likely receive reduced severance pay, as unsecured claims are typically lower in priority.

What happens next?

Expect big liquidation sales in the near future as Hudson’s Bay prepares to close many or all of its 88 stores across Canada. Even if all physical stores close, the Hudson’s Bay’s brand may not disappear entirely. Some analysts speculate that a new buyer could acquire the name and relaunch it as an online retailer, similar to what happened with Sears and Zellers. However, Hudson’s Bay has not confirmed whether it plans to continue operating its e-commerce platform after store closures.

Article content

Hudson’s Bay has said it remains hopeful that a deal can be reached with key stakeholders, particularly landlords, to save some of its operations. However, if no agreement is reached by June 15, all stores could close.

The collapse of Hudson’s Bay would mark the end of a retail giant that predates Confederation. While its logo and branding have remained familiar to generations of Canadians, its financial struggles and foreign ownership mean its fate has been out of Canadian hands for some time.

Our website is the place for the latest breaking news, exclusive scoops, longreads and provocative commentary. Please bookmark nationalpost.com and sign up for our newsletters here.

Article content