It turns out that Canada’s oldest company has not been in Canada for a while
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Hudson’s Bay is a rooted retailer dating back over 350 years and is facing liquidation after failing to obtain the financing needed to keep stores open.
The department store chain tagged itself as Canada’s oldest company and he worked to avoid a complete closure in a Toronto court on Monday. A lawyer for the company said the retailer’s efforts to resolve its cash crisis “failed” and that the company would be forced to fully liquidate without a viable solution for creditors and landlords.
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The news has caused many to mourn the potential losses of 9,000 jobs, and the brand has become part of the country’s history for centuries. But while Hudson Bay has long been a symbol of Canadian retail, it has not been owned by Canada for many years. Here’s what you need to know about Husdon’s Bay.
How long has Hudson Bay been around?
Hudson Bay is bigger than Canada. It was founded in 1670 in the Royal Charter of King Charles II of England, and was established in 1670. At its highest level, it controls most of what will become Canada, operates trading stations and engages in business with Aboriginal people.
The company transitioned to retail when it opened its first department store in Winnipeg in 1881. Over the next few decades, Hudson’s Bay expanded nationwide, becoming one of Canada’s most reputable brands and often became the clothing for the Canadian Olympic team.
Who owns Hudson Bay?
Hudson’s Bay is owned by NRDC Equity Partners, a U.S. private equity firm founded by real estate investor Richard Baker. NRDC acquired the retailer in 2008.
Although Hudson Bay continues to operate in Canada, its decisions and company ownership have been abroad for many years.
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In 2020, Hudson Bay was taken away privately, meaning it is no longer publicly traded on the Toronto Stock Exchange. The move ends its position as a Canadian control company, although its brand remains focused on Canada.
Why did Hudson Bay go bankrupt?
Hudson’s Bay
- Decline in consumer spending: Inflation and economic uncertainty have led to a decrease in discretionary spending.
- Pandemic Retail Fight: Since the 19th pandemic, many downtowns have seen low driving volumes.
- Increase in competition: Online retailers such as Amazon and fast fashion brands attract customers.
- High operating costs: Many Hudson Bay stores are in expensive real estate locations that put pressure on finances.
- Restructuring failed: The company tried to find new investors or raise funds, but could not secure a way forward.
Whose money does Hudson Bay owe?
Hudson Bay has nearly $1 billion in debt and has applied for creditor protection. According to CBC, the company owes $950 million, including nearly 2,000 creditors, including major brands such as Nike Canada, Ralph Lauren and Adidas Canada.
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Court documents show that Hudson Bay had only $3 million in cash early this year and carried $1.1 billion in secured debt, including $724.4 million in mortgage loans. It also owes more than CAD$1 million in Canadian positions and is heavily in debt to several municipalities and government agencies. The amount owed to employees has not been determined.
The CBC reports that secured creditors, such as banks, will give priority to repaying company assets as collateral, while unsecured creditors, including suppliers and employees, may receive only a small portion of the debt owed. Employees terminated during this process may reduce severance benefits, as unsecured claims are usually given lower priority.
What will happen next?
Hudson Bay is expected to close many or all of Canada’s 88 stores in the near future. Even if all brick-and-mortar stores are closed, the Hudson Bay brand may not disappear completely. Some analysts speculate that new buyers can take the name and republish it as an online retailer, similar to what Sears and Zellers have done. However, Hudson Bay has not confirmed whether the store plans to continue operating its e-commerce platform after it closes.
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Hudson Bay said it still hopes to reach an agreement with key stakeholders, especially landlords, to save some of their businesses. However, if no agreement is reached by June 15, all stores can be closed.
The collapse of Hudson Bay will mark the end of a retail giant that predates the federal government. Although its logo and brand remain familiar to Canadians for generations, its financial struggle and foreign ownership mean its fate has been out of Canada’s hands.
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