Reality setting in as Hudson’s Bay begins liquidation

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From worrying about losing their homes to regret not accepting previous severance offers, which could pay them three times the money, is some “tears” from Hudson Bay Company. ULC has approximately 9,000 employees this week as Canada’s oldest department store began liquidating its sales stores starting Monday.

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HBC’s ongoing financial struggle means “writing on the wall”.

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However, workers hoped that the company would turn things around, in 1670. But these hopes are when courts are allowed to start liquidating 90 of 96 stores on Friday.

“They (employees) never thought the Hudson Bay company would go from Canada,” Nesbitt said. “It really surprised people.”

HBC went to court on March 7 to obtain an order to protect it from creditors as it strives to pay landlords, suppliers and service providers. It was a step after the landlord locked it up at a store in Sydney, North Carolina, where a group of bailiffs tried to grab merchandise from a store at Sheways Garden Mall in Toronto.

The move was supposed to be provided to the company, which struggled to deal with the shift to online shopping and used a “breathing room” when seeking financing. However, the plan has not been resolved as trade tensions between the United States and Canada push potential financiers off the market.

For employees, reality is “slowly entering”, many of whom have worked almost all their work life in the Bay, including one of her union who worked there for 38 years.

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She said that people who rejected $25,000 in severance payments in HBC’s previous restructuring attempts about 18 months ago may now have to settle for the up to $8,800 under the Federal Wage Earning Protection Program Act.

The Gulf owes its creditors more than $950 million, including banks, big clothing brands and other businesses, so Nesbit doesn’t want employees to receive any additional payments.

Andrew Hatney, an attorney representing several HBC employees, was particularly concerned about disability payments and said he wrote to the company on Monday asking if HBC would continue to pay them.

“We hope this does not repeat Eaton’s situation where the benefits of employees with disabilities are cut and so they suffer,” he said.

A worker who has been on disability leave since 2021 said she used her benefits to buy thousands of dollars worth of medicine and she could not imagine paying for them if the support disappeared.

The 50-year-old employee asked to remain anonymous, has been working in the Bay for the past 25 years and expects the retailer to fall, but the decision to close so many stores immediately was a “big shock”.

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“I have no other experience,” she said. “I know the rules and policies inside and outside, and now at the age of 50, even if I get rid of my disability, I will even hire my people in the future? I don’t know; I really don’t know.”

In addition to workers, some small businesses, such as Hair Republic HR4 Inc., whose four branches are located in Bay stores, are also worried about receiving payments. Company co-founder John Nguyen said HBC owes that more than $35,000 and he is worried that he may not be a priority.

“To be honest, it’s a lot of money,” he said. “It’s not change for us. If they owe a billion dollars … there are some creditors that are a higher priority for them.”

Nguyen was very excited when his company partnered with HBC in 2021. So much, he thinks that the email he initially received from Bay officials to explore the partnership was a scam. Only on the virtual call did he realize it was a real opportunity, and the company was interested in attracting young audiences through his hair salon.

The partnership ran well in the first two years, but he said payment delays began in 2024. Payments will usually be made within 40 days, but last year it will increase to at least 60 days.

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Nguyen’s company was last paid in February, which were in November and December months, which is usually the most profitable due to the holiday season. He said he had to get HBC executives involved to make sure he was paid.

Despite the trouble, he said he was grateful for getting a platform in such a large store. Just six months ago, he was even in a discussion with HBC about opening branches that would have opened more hair salons, but the uncertainty around the company made him “a little drag” which he said saved him from “significant losses.”

Nesbit says the feeling of uncertainty seems to be a recurring theme for HBC workers. She said it was difficult to provide specific answers to her alliance members, because there was no clear answer on how long it would take to sell all the inventory and when HBC would close its doors.

“It’s so difficult for our members,” she said. “Tear the band-aid so they know what they are aiming for.”

•Email: nkarim@postmedia.com

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