The death knell is ringing for Canada’s oldest company.
Hudson’s Bay announced late Friday evening that unless it finds a more viable path forward, it will begin liquidating its entire business as soon as next week, putting more than 9,000 jobs at risk.
The department store chain that dates back to 1670 and now spans 80 stores said it has been forced toward a full liquidation because “exhaustive” efforts haven’t turned up the financing it needs to keep at least some of its empire alive.
A closure of the entire business would mean job losses for 9,364 employees the company has in Canada across its Hudson’s Bay stores, as well as three Saks Fifth Avenue stores and 13 Saks Off 5th locations it owns through a licensing agreement.
Though the situation looks bleak, the company is holding out hope for a Hail Mary. It said it remains optimistic that it can drum up capital and find a solution with key stakeholders, particularly its landlord partners, to avoid a full shutdown.
“Our team has worked incredibly hard to identify a viable path forward, and our resolve is strengthened by the overwhelming support from customers and associates who have shared heartfelt stories about Hudson’s Bay and what our stores have meant to them, their families, and their communities across the generations,” said Hudson’s Bay president and CEO Liz Rodbell.
“These powerful experiences remind us why we must continue to pursue every possible opportunity to secure the necessary support from key landlords and other stakeholders to save The Bay.”
The company’s plea for help comes about a week after it laid bare its financial struggles in a creditor protection application it made with the Ontario Superior Court of Justice.
In its application, Hudson’s Bay said it was facing financial struggles because of subdued consumer spending, trade tensions between the U.S. and Canada, and post-pandemic drops in downtown store traffic.
The filings show the company owes $950 million to 26 pages’ worth of listed creditors: landlords, suppliers and other partners, including fashion heavyweights Ralph Lauren, Chanel, Columbia Sportswear, Diesel and Estee Lauder.
Jennifer Bewley, the chief financial officer for Hudson’s Bay’s parent company, said in a court filing made on March 7 that the business had to defer certain payments to such companies for many months because it was having so much trouble making payments to landlords, service providers and vendors.
The situation was so severe that she said a landlord “unlawfully locked” Hudson’s Bay out of a store located in Sydney, N.S., and a team of bailiffs attempted to seize merchandise from another location it runs in Sherway Gardens, a suburban Toronto mall.
The March 7 filing was not meant to be the precursor to the closure of the business because Hudson’s Bay was intent to on keeping the company alive and as much of its sprawling footprint operational as possible.
One week later, the company finds itself in much more dire shape. It said the store-by-store liquidation is necessary because it has only secured “limited” debtor-in-possession financing —a form of capital companies can seek for restructuring purposes after they make creditor protection filings.