Hudson’s Bay Company, Canada’s oldest retailer, has filed for bankruptcy protection, citing heavy pressure from weak consumer spending and soaring costs. The company says these challenges have become “significant.”
Rooted in the fur trade in the 17th century, Hudson’s Bay has struggled with declining sales and customer traffic as Canada’s economy faced ongoing difficulties under the Liberal government.
On Monday, a Toronto judge granted the company creditor protection, allowing it to restructure its debt and attempt a financial recovery. Justice Peter J. Osborne of the Ontario Superior Court of Justice opened his decision with a reflective statement:
“It’s difficult not to feel a sense of sadness when considering this application. Hudson’s Bay is the oldest company in North America and a key part of Canada’s retail history. Founded in 1670, it has now reached a point where it is insolvent and seeking protection from creditors.”
Known historically for its iconic striped wool blankets, originally traded for beaver pelts, Hudson’s Bay now operates around 80 stores. This is down from its earlier days due to several closures and layoffs.
The retailer also runs some Saks Fifth Avenue and Saks Off 5th stores in Canada under licensing agreements.
The parent company, Hudson’s Bay Company, was acquired by U.S. retailers Neiman Marcus and Bergdorf Goodman last year, merged them with Saks, and later spun off Hudson’s Bay into a separate entity.
American real estate investor Richard Baker, a former owner of the now-defunct luxury chain Lord & Taylor, controls the Hudson’s Bay Company.
Hudson’s Bay Not the Only Retailer Struggling
Upscale department stores across Canada have faced widespread challenges. The pandemic led to a surge in online shopping and work-from-home trends, reducing in-store visits.
Inflation further tightened household budgets, making non-essential purchases less of a priority. Luxury brands, once a cornerstone for department stores, increasingly focus on direct sales through their stores and online platforms.
In a court filing on Friday, Hudson’s Bay acknowledged struggling to meet payments to landlords and suppliers. It warned it would soon be unable to cover payroll for its 9,364 employees without additional funding.
CEO Rodbell described the bankruptcy protection as necessary, saying, “This step is critical to secure our future and ensure we continue to play a role in Canada’s retail sector. Supporting Canadian businesses is more important than ever.”
In other retail news, Canadian Tire (CTC) announced plans to close some of its Atmosphere locations as part of a four-year restructuring effort. The company will shut down 17 underperforming standalone Atmosphere stores, with 14 of these being relocated inside SportChek locations.
This restructuring aligns with CTC’s updated “True North” strategy, designed to streamline operations and improve market positioning. “We’re focused on operating more efficiently and leveraging our loyalty programs to maximize scale,” said Greg Hicks, president and CEO of CTC.
In the retail sector, Family Dollar and The Body Shop have also revealed plans to close multiple stores in Canada.
Canadian Tire Company hasn’t confirmed if the Atmosphere closures will result in layoffs. However, according to CTV News, it is working to place affected employees in other roles as closures occur in Western Canada over the next few months.
The company is also undergoing leadership changes as part of its restructuring. Susan O’Brien has been appointed as EVP and chief transformation officer, a role she takes on following 17 years with the company.
TJ Flood, another long-serving executive, will now serve as EVP and chief operating officer, overseeing banners like Canadian Tire, Mark’s, and SportChek. Another key role, EVP and chief commercial officer, will soon be announced. This role will focus on growing the Triangle Rewards program and enhancing customer insights.
Darren Myers, an experienced financial leader, will join as EVP and chief financial officer starting April 1. He has previously led large-scale transformations in Canadian retail and other industries.
Meanwhile, a recent report revealed that Canada Post is cutting nearly 50 management positions to reduce costs following years of financial losses.
