Hudson's Bay to start liquidating last six stores, signalling end of historic retailer
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Hudson's Bay Co. is planning to begin liquidating six of its stores that it had previously hoped to keep open, signalling the potential end of Canada's oldest department store.
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HBC started liquidating 90 of its 96 stores last month, but it hoped to attract bids to keep its footprint alive through a 'six-store model.' But the move seems to be negatively impacting the company's ongoing efforts to raise roughly $1 billion it needs to pay back creditors, according to court documents.
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'It is unlikely to receive a viable going concern bid based on the proposed Six Store Model,' Adam Zalev, cofounder of Reflect Advisors LLC, HBC's financial adviser, said in the document. 'The exclusion of the six stores from the liquidation sale is negatively impacting (HBC's) realization efforts.'
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Given the 'low probability of receiving a viable bid,' the company said it wants to start liquidating the remaining stores, which includes its flagship store in downtown Toronto, as well as two others in the Greater Toronto Area and three in the Greater Montreal Area.
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HBC will still have the ability to stop liquidating these stores or any of its other stores if it receives a viable bid, Zalev said. However, any bid needs to be received by April 30, according to a court order.
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HBC's latest proposal comes almost a month and a half after it decided to seek protection from its creditors through the Companies' Creditors Arrangement Act (CCAA). The company on March 14 said it would have to liquidate all 96 of its stores unless 'an alternative solution' emerged.
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After a series of negotiations between its lenders and landlords, HBC received a court order on March 21 that directed it to liquidate all but six of its stores. But HBC's lawyer told the Ontario court on the same day that he wanted 'to be crystal clear' that HBC did not have an agreement on which it could base a restructuring plan.
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Judge Peter Osborne, who has been hearing the motions at the Ontario Superior Court of Justice in Toronto since March 7, said the more stores 'carved out' from liquidation, the better.
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It wants to host a separate auction to sell more than 1,700 pieces of art and more than 2,700 artifacts that 'reflect the rich heritage and cultural legacy of the company.' Among them is the Royal Charter, a document that gave the company exclusive trading rights over a portion of Canada in 1670.
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