Yorkdale mall’s landlord fought in court Wednesday to block clothing retailer, Fairweather, from taking over the prime space left vacant by Hudson’s Bay’s exit.
Oxford Properties told a judge in Ontario Superior Court that it does not consent to a proposed sublease by FTI Consulting, the court-appointed receiver for a former Hudson’s Bay lease at Yorkdale, which would allow Fairweather to operate a new department store under the “Ailes” banner.
D.J. Miller, a lawyer for Oxford, argued in court that approving the sublease would lock the landlord into a long-term lease of up to 50 years with an “unsuitable” tenant in the mall’s anchor space and could result in losses of hundreds of millions of dollars.
Oxford said in previous court filings that Fairweather’s current operations at its two other malls appear “temporary and down-market,” which do not align with Yorkdale’s position as a “leading luxury retail destination.”
“You are being asked to allow (the receiver and RioCan) to take a gamble with my client’s crown jewel asset that is worth billions of dollars, and hope for the best,” Miller told the judge, Jessica Kimmel.
FTI Consulting countered that Oxford’s opposition is rooted in its commercial interest, arguing that a failed Fairweather transaction would allow Oxford to reclaim the former Hudson’s Bay lease, with its below-market rent and redevelopment constraints.
The court did not release its ruling on Wednesday.
The legal battle follows the placement into receivership of a joint venture between Hudson’s Bay and real estate firm RioCan, which held the Yorkdale lease, after the centuries-old retailer went bankrupt last year.
Backing the proposed sublease, RioCan holds a $75 million mortgage on the former Hudson’s Bay lease and could face major losses should the lease be returned to Oxford.
Under the proposed sublease, Fairweather would pay a gross rent of either $1 million a year or 12 per cent of its sales at Yorkdale, whichever is higher until May 2029. The rent is lower than the $2.8 million that Hudson’s Bay was required to pay in the past, but RioCan said in court that it is willing to subsidize the differences.
Fairweather, owned by the Canadian businessman Isaac Benitah, is no stranger to the Canadian retail industry.
The Benitah family has operated a series of brands, including menswear retailers International Clothiers and Stockhomme, the discount outlet Designer Depot, and the newly acquired Zellers.
Fairweather aimed to revive the family’s once-venerated, but now-defunct, department store, Les Ailes de la Mode, under the “Ailes” banner in Yorkdale, according to FTI Consulting.
It has already finalized arrangements with shopping centre owner Primaris to open two other Ailes department stores in former HBC locations in Quebec City and Montréal in the first half of 2026.
Oxford said in court that it has not received any direct evidence, such as financial resources and a business plan, from Fairweather to prove itself as a “creditworthy and suitable” tenant replacement.
When asked by Judge Kimmel why those things were not sought, Orestes Pasparakis, a lawyer with FTI Consulting, said Fairweather is no newcomer to Oxford, given its history as a tenant in multiple malls owned by the real estate firm for decades.
Pasparakis said Oxford was able to point to almost no instances of Fairweather failing to pay rent on time, aside from a few hiccups.
Fairweather was among Yorkdale’s first tenants in 1964 running until its lease expired in 2020.
“There’s no suggestion anywhere in the material that having Fairweather in Yorkdale was a bad experience or harmful to Oxford or to the mall,” said Pasparakis. “It’s the same tenant in the same mall with the same landlord, and there were no issues.”
He added that Fairweather has experience operating department stores, including Zellers and Les Ailes de la Mode, and has decades of expertise in clothing retail.
“This is one of Canada’s most well-known retailers with a track record measured in decades, a huge number of stores and vast experience,” Pasparakis said.
Miller disagreed, and said Fairweather has never run a 300,000-square-foot space before.
Judge Kimmel asked Oxford at the end of the hearing whether having an unwanted tenant is as bad as having nobody in the space.
“No,” said Miller. “Having an anchor tenant space vacant with no rent being paid is far better for the shopping centre and its tenants than an unsuitable anchor tenant.”
