Lucrative retail spaces up for grabs as future unclear for Hudson’s Bay

It’s one of the most iconic brands in Canadian history, but it looks increasingly as though The Bay may just become the latest big-name retailer to shutter its doors for good.

Ontario Superior Court Judge Peter Osborne has yet to decide what’s next for the beleaguered company. On Monday, a court hearing wrapped up with no concrete plans about liquidation.

In the meantime, shoppers are heading to the mall to score deals.

“I bought a few Hudson Bay traditional blankets, with traditional stripes. Gloves, a hat, a dog collar, tea towels, a wool coat, and a wool purse,” said one woman.

“[It’s] very sad to see it go,” added another.

“I wanted to make sure I got my hands on some of the traditional Bay stuff,” said one shopper.

For some, walking the aisles has been a trip down memory lane.

“It was the go-to store because it had everything, especially growing up as a teenager, we didn’t have all the same stores that we do now, so that’s where you would go to get all your cool jeans,” another shopper said.

“It was very family-oriented, back-to-school you would see everyone shopping for stuff. It really is quite emotional,” added another.

Founded in 1670, The Bay has 80 locations across Canada, including 16 in B.C. If the stores are closed for good, more than 9,000 people could lose their jobs.

Retail analyst Bruce Winder tells 1130 NewsRadio says the company had been struggling for some time, so this isn’t a huge surprise.

“The department store channel has sort of lost its lustre. Young people, millennials, younger Gex X’s, Gen Z — they don’t really see department stores as a channel of distribution. They go to other specialty stores or online,” he said of the business’s demise.

“The Bay also had a legacy business model that was just outdated. Their stores are too big. High overhead costs and I think they went upscale a little bit and may have lost some customers and they also stopped investing in the brand over the last several years.

“And let’s face it, the pandemic was really hard on them too because a lot of the stores — the good ones — are downtown and we know what happened to downtowns in Canada over the last five years — fewer people working downtown, less people shopping downtown.”

He adds having a higher price point at a time when the economy was unstable didn’t help their case either.

“If you’re selling middle class and up, it’s a bit tough right now because people are watching their money. They’re not buying as many discretionary items. The Bank of Canada may have to raise interest rates again if inflation gets out of hand toward the second half of the year. That generally slows spending. There’s a lot of fear about job loss as well. So, it’s a bit of a hot mess right now.”

If the judge decides to close dozens of stores nationwide, Winder doesn’t think it’ll be the last you’ll hear from them.

“I do think the brand has a role in Canada, maybe from a licensing perspective, or maybe someone buys it, trademarks it, and opens smaller stores that are more focused on the heritage of the brand,” he explained.

Winder says the empty retail space will be chopped up by landlords and leave it to several smaller brands. However, for malls where The Bay is a key anchor store — the timeline to fill the space is unclear.

“I think those malls are going to look a little funny for a while. They’re going to look vacant, like when we saw Target leave. You’re going to have dead space there. It’s going to look horrible. I think those malls will suffer in the short run, but depending on what the landowners can do in terms of who they bring in there, they might be able to make it better,” he said.

“Let’s face it, although The Bay was big in terms of brand and in terms of size of store, their sales weren’t really that big.”

Winder says despite all this, he thinks malls still hold an important place, despite the increased challenges within the retail industry.

“Malls used to be everything, but a lot more business is done online now, and a lot of business is done in standalone stores too. A lot of companies have created off-mall locations, which are cheaper to manage.”

The Bay could join a long list of retailers that couldn’t cut it in the Canadian market. Others include Nordstrom, Target, Sears, Bed Bath and Beyond, and, of course, Zellers.

“This is the normal purging of the industry where for the industry to remain healthy the weak formats will leave, and new stronger formats will come in and that’s part of the retail lifestyle.”

With files from Anthony Atanasov and Momin Qureshi.