Many shoppers in Ottawa say they aren’t surprised to hear that Hudson’s Bay, Canada’s oldest retailer, has filed for creditor protection.
With four stores in the capital, it’s a move that will let the retail giant pause debt payments, while figuring out how to stay afloat as it faces serious financial difficulties.
“This is a really tough environment in retail and if you’re in the department store sector, which they are, that’s an even tougher sell because consumers don’t buy that way anymore,” said retail analyst, Bruce Winder.
A source told The Canadian Press the department store is looking to close around 40 of its 80 stores nationwide, although that number could change.
The Bay was founded in 1670 and has survived everything from fur trade shifts to retail booms and busts. But in today’s world, “the company is struggling to compete with changing consumer habits, the rising cost of living and its trade tensions with the U.S,” according to a press release from the company.
Some Ottawa shoppers say they aren’t surprised.
“They’re obviously selling brands that have their own independent stores and so I think it’s just encouraging people to go right to the source,” said shopper Anina Trecroce.
Another shopper, Mark Basterfield, added, “Overall, that happening is definitely not a good thing, at the same time, a lot of businesses that have been able to change with the times are doing pretty well.”
The company says it’s working on a restructuring plan, which experts say on top of store closures, could mean layoffs or other major changes.
“One could argue that they haven’t really managed the company that well – the retail side… they haven’t invested capital or operational expenses, and they really had a bit of a revolving door from an executive standpoint over the last decade or so,” Winder said.
“So, a lot of this is self-inflicted.”
Court documents filed with the Ontario Superior Court of Justice show customers held roughly $24.3 million worth of gift cards as of Feb. 1. At least for now, those cards remain active.
“In the view of Hudson’s Bay, honouring outstanding gift cards in its continuing locations will promote goodwill among customers during the proceedings and will assist in maintaining value for stakeholders as a whole by, among other factors, attracting customers to the Canadian retail stores and online,” said Hudson’s Bay Co. ULC chief financial officer Jennifer Bewley in an affidavit filed in court.
According to the company in a press release, “While very difficult, this is a necessary step to strengthen our foundation and ensure that we remain a significant part of Canada’s retail landscape.”
With files from The Canadian Press
