Hudson’s Bay files for creditor protection, intends to restructure

Canada’s oldest retailer, Hudson’s Bay Co., has filed for creditor protection and intends to restructure the business.

The department store company that dates back to 1670 says it has been facing “significant” pressures including subdued consumer spending, trade tensions between the U.S. and Canada and post-pandemic declines in downtown store traffic.

“While very difficult, this is a necessary step to strengthen our foundation and ensure that we remain a significant part of Canada’s retail landscape, despite the sector-wide challenges that have forced other retailers to exit the market,” Liz Rodbell, president and CEO of Hudson’s Bay, said in a news release.

“Now more than ever, it is critical that Canadian businesses are protected and positioned to succeed.”

As part of the filing it made with the Ontario Superior Court of Justice on Friday, the Bay said it was exploring several strategic options to strengthen its business and said it would not make promises but was committed to preserving jobs where possible.

While the process can lead to the sale or closure of a business, the Bay appears intent on avoiding those possibilities and keeping much of its sprawling retail footprint alive.

The company has 80 retail locations that sell everything from apparel and housewares to cosmetics and furniture.

Through a licensing agreement, it also owns three Saks Fifth Avenue stores and 13 Saks Off 5th locations in Canada, which will continue to operate.

Tariffs, tariff threats a problem

Saks Global, which owns U.S. Saks locations as well as Neiman Marcus and Bergdorf Goodman stores, is not connected to the creditor protection filing that was made as the U.S. continued to threaten Canada with additional tariffs Friday.

Rodbell said the U.S.’s earlier provocations had already harmed Hudson’s Bay. While the company was negotiating with potential investors to bring in more liquidity, the threats and eventual implementation “created significant market uncertainty” that ultimately stopped any possible deals from closing.

She was hopeful a $16 million advance and Friday commitments from U.S.-based investment management firm Restore Capital and other lenders, meant to provide interim debtor-in-possession financing, would help the Bay weather the turmoil. The company said it hoped to secure additional financing in the days ahead.

The company spent the last several years in a state of deterioration as it closed several stores and carried out several rounds of layoffs.

In orchestrating prior cuts, it cited “challenging headwinds” that made it necessary to slash its workforce and pull out of a store redevelopment at the Oakridge Park shopping centre…