Whether or not Hudson’s Bay Company will have to undergo a full liquidation or be able to keep some stores afloat while it restructures is still unknown — the indebted retailer has received another extension from an Ontario judge that will push the decision to the end of the week.
Ashley Taylor, lawyer for Hudson’s Bay, addressed a Toronto courtroom on Wednesday to request an extension on the formal approval of the liquidation plan until Friday, saying that the company was still engaging with stakeholders and having “good, constructive discussions.”
Canada’s oldest company officially filed for creditor protection earlier this month, admitting it was struggling with financial difficulties. Taylor said at the time that the retailer was hoping to restructure by liquidating half its stores and monetizing some of the leases it holds in areas of prime foot traffic.
However, they were unable to secure the funding from lenders that would be required to finance that restructuring, leaving the company scrambling and facing a full liquidation.
Meanwhile, amid the corporate chaos, shoppers in many regions of Canada are acting as though liquidation sales have already started, with stores seeing empty shelves and increased crowds.
More than 9,000 workers stand to lose their jobs if the company liquidates all of its 80 stores, online offerings and the three Saks Fifth Avenue and 13 Saks Off 5TH stores that Hudson’s Bay operates in Canada under a licensing agreement.
The deeply indebted retailer owes nearly $1 billion to creditors.
It outlined in a news release on March 14 that a store-by-store liquidation process would begin following court approval, and that it could take up to 12 weeks. The court was originally slated to reveal its decision on Tuesday.
Taylor stated in Wednesday’s proceedings that the company had enough liquidity to keep operations going until Friday, but added that they may be ready to approve a plan as early as Thursday.
Hudson’s Bay Company is entrenched in Canadian history — founded in 1670 by fur traders, the company, in its original form, once owned a wide swath of northern Canada around Hudson Bay. In its modern form, its department stores were once bustling sites of commerce, hosting countless brands, along with its own branded lines of clothing and goods.
How a liquidation sale works
According to the news release from Hudson’s Bay, department stores and the associated Sask Fifth Avenue and Saks Off 5th stores will remain open during the liquidation process. Customers will also, for a limited time, still be able to purchase goods on TheBay.com.
Unlike a clearance sale, where retailers may offer steep discounts fast to make room for new products and accept store credit in place of returns, a liquidation sale is more likely to start out with smaller price drops that grow larger as the deadline approaches, and all sales…
Read More: Fate of Hudson’s Bay still up in the air as extension on liquidation plan
