Hudson's Bay Extends Liquidation to Entire Fleet
After triggering liquidations at 86 locations across Canada, the Hudson's Bay Co. has decided to liquidate its remaining six Hudson's Bay stores and one Saks Fifth Avenue location.
The company had been seeking a buyer for the six stores, but on Friday said it believed that a viable bid for the current six-store model is unlikely, and therefore liquidation sales in those stores began Friday. Should an 11th-hour bid surface, the six stores could stop liquidating.
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A company called Reflect Advisors continues to solicit interest in parts of Hudson's Bay, including certain properties and other assets, as well as a refinancing of all or a portion of the business of the company. But the deadline for these submissions is Wednesday, leaving little hope for Hudson's Bay to live on, even as a sliver of what it once was.
The 73 other Hudson's Bay, 13 Saks Off 5th and two Saks Fifth Avenue locations began liquidation sales last month, as reported by WWD.
The closure of Hudson's Bay, given that it operated 79 stores across Canada — including some huge downtown locations in Toronto, Vancouver and Montreal — dramatically alters the country's retail landscape and put thousands of people out of work. Hudson's Bay employs 9,364 people.
The venerable retailer, considered the oldest company in North America having been founded in 1670, originally as a trading company, was dragged down by more than 1 billion Canadian dollars in debt, a weak consumer economy and an inability to pay bills. Its first department store opened in 1881 in Winnipeg, Manitoba.
Past talks to secure financing fell apart. Over the years a handful of retail companies and private equity players considered buying Hudson's Bay, but they reconsidered after examining the books. Still, Hudson's Bay's business had been floundering for years, even before Richard Baker's NRDC firm took control of the Toronto-based department store chain. However, under Baker's 17 years of control there has been a revolving door of senior leadership, flip-flopping strategies and the abdication of market share as well as some lucrative monetization of retail real estate. Retail experts saw a lack of investment in the stores, diminishing service levels and deteriorating physical conditions, like malfunctioning escalators and water damage in certain locations.
The Hudson's Bay and Saks Fifth Avenue stores in Canada are expected to operate no later than June 15, although some might close earlier. Additionally, nine Saks Off 5th stores will close Sunday. Through a licensing agreement, three Saks Fifth Avenue and 13 Saks Off 5th locations have been operating in Canada.
Hudson's Bay was severed from Saks Global late last year. It is a separate company from Saks Global, which operates Neiman Marcus, Saks Fifth Avenue and Saks Off 5th, and which has also been late paying bills. But both businesses are under Baker's control.
Currently, Hudson's Bay stores are offering 40 to 70 percent discounts storewide, depending on the category. Saks Fifth Avenue in Canada is offering up to 30 percent off storewide, and Saks Off 5th is offering 40 to 60 percent off its lowest ticketed prices. Select luxury brands and the HBC Stripes Collection are not being discounted. In addition, select store fixtures, furnishings and equipment will soon be available for purchase at participating locations.
'Hudson's Bay extends its sincerest gratitude to its dedicated associates and loyal customers for their overwhelming support over the years and throughout this chapter,' the company said in a statement Friday.
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