On June 1, 2025, one of the best-known names in Canadian retail went out — not with a bang, but a whimper.
Founded more than 350 years ago to dominate the North American fur trade, the Hudson’s Bay Company had weathered world wars, witnessed the collapse of empires and survived multiple global financial crises — only to suffer a slow death at the hands of changing consumer habits and the rise of the internet.
The Bay was perhaps the highest-profile Canadian casualty of what some analysts call the “retailpocalypse,” a decades-long global unwinding of seemingly untouchable legacy retailers that has only accelerated since the COVID-19 pandemic.
However, while certain iconic brands are fading away, others have managed to evolve and even thrive.
Here’s what’s killing retail today — and what might be the cure.
Why are iconic Canadian retailers dying out?
The first major casualty of the retailpocalypse was arguably Eaton’s, once Canada’s largest department store empire. It declared bankruptcy in 1999 — more than a century after Timothy Eaton opened his first department store in Toronto in 1883 — due in part to years of mismanagement and an inability to adapt to shifting consumer trends.
Two years later, beloved discount chain BiWay went defunct after being squeezed by big box competitors and dollar store upstarts.
Zellers met the same fate, closing most of its stores in 2013 — although it enjoyed a short-lived comeback in 2023. The brand is now attempting another revival, after the collapse of HBC, with some success (more on that later).
You might also recall the disastrous Target Canada experiment, which lost the Minneapolis-based company $5.4 billion after less than two years of operation, before stores shuttered in 2015.
Then, in 2017, even Sears Canada was forced to declare bankruptcy, after failing to adapt to modern shopping trends and the internet.
The collapses of these retail titans tend to share a common catalyst, said John Pracejus, an associate professor and director of the School of Retailing at the University of Alberta.
“I don’t think it’s any surprise to say that a lot of it is being driven by competition from online retailers, or other means of consumers getting their goods and services,” Pracejus told the Star. It’s become far more convenient for customers to buy what they need online, from the comfort of their homes, than to commute to a department store, he said.
And the COVID-19 pandemic has only hastened the death of many already struggling businesses, noted Jenna Jacobson, director of the Retail Leadership Institute research hub and an associate professor at Toronto Metropolitan University.
Not only were physical storefronts hammered by the drop in foot traffic, “We’ve never really returned to pre-pandemic levels” of traffic, Jacobson said. “And that was especially damaging for the department stores and apparel brands that were really reliant on mall traffic.”
Couple that with cost-of-living challenges — a recent TD Bank report found two-thirds of Canadians plan to significantly cut back on their spending in 2026 — and it’s little wonder so many businesses are struggling of late.
Which Canadian brands have survived — and even thrived in the current market?
The future of retail is not looking great. Yet there are ways to survive and even thrive in the current market, experts say: “Canadian Tire has stayed pretty resilient in the current marketplace. Aritzia is thriving currently, and so is Dollarama,” Jacobson noted.
Business is booming for budget retailers such as Dollarama, given our current affordability challenges. “So long as you sell things at a lower price, you thrive,” added Chun Qiu, an associate professor of marketing at Wilfrid Laurier University.
Meanwhile, businesses such as Canadian Tire have found success through leveraging their reputation with a loyal customer base, while also diversifying into other sectors, such as finance with Triangle Mastercard, Qiu continued.
Other brands have adapted to the internet age by shifting their operations partially or fully online, to the point that businesses such as Best Buy Canada have taken to converting their brick-and-mortar locations into e-commerce fulfilment centres, according to Pracejus.
“Honestly, I think a lot of people would have predicted that companies like Best Buy would have been out of business by 2026,” Pracejus said. “In fact, they have not only weathered the storm but come out maybe stronger.”
Then we have phoenixes such as Zellers, which, after being purchased from HBC by Quebec-based retailer Les Ailes de la Mode Inc. last year, has been re-opening stores across Canada.
Instead of the massive stores of the past, Zellers is focusing on “flexible,” smaller pop-ups between 30,000 and 50,000 square feet that offer a more “intimate, easy-to-shop experience” while offering affordable and diverse products, the company said. The first store, opened in October last year, “exceeded our expectations in every way,” CEO Joey Benitah said in a release, leading the company to set its sights on national expansion.
When ‘Canadian’ brands aren’t actually Canadian
Of course, all this calls into question what makes a brand “Canadian” to begin with. Do they have to be fully Canadian-owned?
If that were so, even Tim Hortons wouldn’t make the cut — it’s owned by Canadian-American multinational holding company Restaurant Brands International. The Hudson’s Bay Company had been owned by Americans after it was sold to South Carolina businessman Jerry Zucker in 2006, before it was bought by U.S. private equity firm NRDC Equity Partners.
“This is happening through mergers or acquisitions, and it’s just kind of part of globalization,” Jacobson said. “Often, you have the brand identity that stays Canadian for marketing purposes — Tim Hortons is the perfect example of this.”
Truly Canadian or not, Jacobson believes physical retailers aren’t going anywhere, even with the dominance of e-commerce: “The challenge is when the physical retail store is not offering any advantages over shopping online,” she said.
“I think the integration of digital technology with physical retail and allowing customers to move more seamlessly between the physical and the digital is where I would see the future of retail going.”
