HUDSON’S BAY SAYS IT FAILED TO SECURE ADEQUATE FINANCING FOR RESTRUCTURE | BRACES FOR LIQUIDATION
In a developing story, Hudson’s Bay released a statement that stated that it had been unsuccessful at securing sufficient financing to save the 80 stores and 16 outlets it operates. The company had filed for creditor protection under Canada’s CCAA (Companies Creditors Arrangement Act) on March 7th but a week later informed Ontario Superior Court of Justice that it had not obtained the backing it needed.
Landlords are bracing for what might be a monumental amount of empty square footage coming onto the market. Additionally, the company employs over 9,000 workers, and its closure would represent the largest retail bankruptcy in Canada since the 2015 closing of over 130 Target stores. The loss of these stores is seen as a major threat to the solvency of dozens of shopping centers across Canada, many of which have already extended below-market leases to the retail giant.
Hudson’s Bay, founded over 350 years ago in the 1600s, is planning for a full liquidation of its assets, possibly starting this week. In 2021 the retail location and online stores were separated into two separate businesses, both would be closed as the parent company liquidates as early as this Tuesday.
CEO Liz Rodbell said she still hopes to find the financial support the company needs. In a statement, she said, “We must continue to pursue every possible opportunity to secure the necessary support from key landlords and other stakeholders to save The Bay.”
In court, Lawyers for Hudson’s Bay petitioned the judge to allow for the liquidation of 80 of the company’s fleet of stores as well as its licenses to Saks Fifth Avenue locations. This effort would allow the company to shed excess costs, prevent the complete extinguishing of the historic business, and allow them an additional up to 12 weeks to secure the needed financing. This is according to Hudson’s Bay’s legal representation, Ashley Taylor. “A quick start will maximize the value of the business … and preserve whatever chance there is of a restructuring,” Taylor said.
In the lead-up to today’s hearing, Taylor stated that the company was in negotiations with U.S.-based investment management firm Restore Capital and other lenders but was unable to coalesce an agreement in time.