Even as Hudson’s Bay proposes to shutter stores across the country, a piece of the centuries-old brand could live on: its iconic stripes.
Along with ruling on Hudson’s Bay’s bid to start liquidating its entire business, an Ontario Superior Court justice is expected to decide soon whether Canada’s oldest retailer can sell its trademark and intellectual property rights.
This would pave the way for Hudson’s Bay to put its white-green-red-indigo-yellow stripes, logo and name on the auction block in the coming weeks.
According to documents filed in court on Monday, the company is asking the judge to give interested buyers and investors until April 15 to make bids for some or all of Hudson’s Bay’s trademark and property rights. Pending an auction and separate court decision, the new owner (or owners) should be approved by mid-May.
Retail experts who spoke to the Star on Wednesday believe it is likely there would be at least one buyer interested in purchasing the property rights.
“People will start to pick at the carcass, so to speak,” said retail analyst Bruce Winder. “The brand has some value, but certainly not in its current form.”
Winder speculated that this new business model could play out in different ways.
One scenario might involve a manufacturing company buying the rights and starting to make Hudson’s Bay-branded products it then sells to other retailers.
Another could see a retailer like Canadian Tire developing its own product line under the Hudson’s Bay name for its stores.
The latter scenario, said Lisa Hutcheson, a managing partner of retail consulting firm JC Williams Group, is similar to what Hudson’s Bay did with Zellers when the department store acquired the discount chain in the 1970s.
Hutcheson said smaller, specialized stores filled entirely with iconic striped merch could pop up in malls or major tourist areas should another company purchase the Hudson’s Bay trademark.
“I could see somebody doing a really nice collection of that and really drawing on that Canadian theme,” she said, adding there is also “real nostalgia” around the iconic stripes.
Since news broke earlier this month that Hudson’s Bay was seeking creditor protection and looking to liquidate its entire business, shoppers have descended on their local stores to snag whatever signature striped items they can.
At the company’s Toronto flagship store on Queen Street West, people rifled through drawers and searched under beds for blankets, pillows and anything else they could find Wednesday morning.
Many left empty-handed, while others scouted out any other shopper who decided to put a coveted item back on the shelf.
If Hudson’s Bay does end up selling its trademark and intellectual property rights, all of the money earned would go toward paying off the company’s creditors.
According to court documents obtained by the Star last week, the company owes a total of $950 million to nearly 1,900 creditors, including landlords, fashion brands, banks and the Canadian government. Another $430 million is owed to secured creditors, or those who have the highest priority when it comes to being paid back.
Secured creditors also have the right to seize and sell assets to recover amounts owed if necessary.
“Hudson’s Bay would be obliged to whoever’s controlling the assets at that point to try to get the highest value as possible,” Winder said of a potential trademark selling deal, “so they can pay the creditors back because (they) owe a ton of money.”
A decision on Hudson’s Bay’s liquidation plan was expected earlier this week, but has been deferred to allow further discussions among the affected parties.
With files from The Canadian Press
