After a week spent seeking a lifeline, Hudson’s Bay says it has found a way to keep a half-dozen stores open — for now.
Canada’s oldest company was in court Monday to seek permission from an Ontario judge to liquidate all but six stores starting Monday.
The six stores Hudson’s Bay wants to save from the liquidation sale include the flagship location on Yonge Street in Toronto, as well as a store in the city’s Yorkdale mall and another at Hillcrest Mall in Richmond Hill, Ont. The remaining three are in Montreal, the Carrefour Laval mall and Pointe-Claire, Que.
The company did not say how deep the discounts at the remaining stores will be during the liquidation period, which would run until June 15. It is promising to vacate those locations by June 30.
The move stands to save some of the 9,364 jobs that could be lost if the company liquidated all of its stores, which was the plan until Hudson’s Bay said Friday that sales had exceeded its expectations, allowing for it to keep six locations alive.
“If a solution can be found, there is an opportunity to pull additional stores out of the liquidation, but if a restructuring solution is not found very quickly, (the six) will be added to the liquidation sale,” Hudson’s Bay lawyer Ashley Taylor said in court Friday.
The proposal marks a glimmer of hope for the company, which filed for creditor protection on March 7. The filing showed the company was facing significant financial challenges and was desperately in need of cash to keep making even basic payments that sustain the business.
While it suffered from reduced consumer spending, trade tensions between the U.S. and Canada and a post-pandemic slide in downtown store traffic, the retailer deferred payments to landlords and suppliers and eventually had to resort to seeking financing, which pushed it toward liquidation.
The six stores could now be saved because the looming liquidation triggered a flurry of sales from customers looking to snap up Hudson’s Bay’s famed striped products and other home goods and apparel.
The cash from the sales will allow the company to pay back $16 million in financing it received from a lender to keep it afloat until the court gave it permission to liquidate.
Taylor said the company will “work hard” to find a “more long-term solution,” but he warns the window they have to achieve this “remains very short.”
While the company carries out this work, it wants to start a sales process for assets such as its leases. If it gets its liquidation approval, much of the company’s merchandise will be sold and its stores gutted. It has 80 Hudson’s Bay stores, three Saks Fifth Avenue locations and 13 Saks Off 5th shops in Canada
Four distribution centres the company leases in Vancouver and in Toronto’s Scarborough and Etobicoke also stand to be affected.
Whether Canadians shop in person or online, they will find Hudson’s Bay has paused its loyalty program, which has 8.2 million Canadian members with about $58.5 million in unused points.
It will stop accepting the $24.2 million outstanding gift cards consumers have after April 6 — a decision Osborne has urged the company to widely publicize so shoppers aren’t caught off guard.
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