Once the pride of Canadian retail, Hudson’s Bay now finds itself at a dramatic turning point. A court's recent decision has not only thrown its restructuring plans into disarray, but also exposed deep tensions between creditors, landlords, employees, and suppliers. What was once a trusted brand with storied roots is now a stage for legal battles, drastic layoffs, and controversial executive payouts. Let’s journey through the unfolding drama of Hudson’s Bay’s struggle to survive.
The Deal That Didn't Make It
On a somber day in late March, Justice Peter J. Osborne of the Ontario Superior Court effectively slammed the brakes on Hudson’s Bay’s hopes for a streamlined rescue. The retailer had struck a deal—known as a restructuring support agreement (RSA)—with heavy-hitting lenders like Bank of America, Restore Capital, and Pathlight Capital. This proposed pact would have handed these financial giants sweeping control over the company’s fate, enabling them to enforce strict financial locks, decide on asset sales, and overrule other stakeholders.
But not everyone was on board. Landlords and external stakeholders saw a Trojan Horse: beneath the banner of "rescue" lurked the threat of liquidation. Justice Osborne agreed. Describing the plan as “neither necessary nor appropriate,” he rejected the RSA, insisting that Hudson’s Bay continue restructuring under the court-monitored Companies’ Creditors Arrangement Act (CCAA), offering more balanced oversight for all affected parties.
The Human Cost
Behind the courtroom wrangling are thousands of lives in limbo. Across 90 soon-to-be-shuttered stores, over 9,000 employees brace for layoffs. Many of them, loyal for decades, declined earlier severance offers during what they hoped was a temporary downturn. Now, their only legal cushion is the federal Wage Earner Protection Program—offering far less security, capped at $8,880.
In a separate blow to morale, the company also announced 200 corporate job cuts, effective April 4—shedding nearly 40% of its head-office workforce in one fell swoop. As frontline staff receive nothing but uncertainty, a $3 million bonus pool has been set aside for the executive team—raising cries of injustice from all corners, including the Canadian Labour Congress.
The Waning Empire
As of March 25, shoppers witnessed the first signs of Hudson’s Bay's unraveling: liquidation sales across 74 Bay locations, 13 Saks Off Fifth stores, and two Saks Fifth Avenue flagships. Only six brave outposts, located in Toronto and Montreal, remain open for now—holding out hope for a buyer to step forward.
Landlords like Cadillac Fairview aren't buying it—literally or figuratively. To them, the restructuring deal looked alarmingly skewed in lenders’ favor, with little regard for long-term viability. They’ve thrown their support behind the CCAA process, petitioning for a sale that considers more than cold balance sheets.
Meanwhile, more than 2,000 suppliers are caught in the crosshairs of financial instability. Many are small businesses, blindsided by unpaid invoices and halted orders. One such victim, Hair Republic HR4 Inc., is chasing over $35,000 in unpaid bills—an existential threat for mom-and-pop operations.
Countdown to Collapse or Comeback?
With the court's rejection setting the stage, lenders may pursue an even more aggressive measure: receivership. In this scenario, control of Hudson’s Bay’s assets could be handed to a third party to settle debts swiftly—at the potential expense of any future for the brand as it stands.
Analysts are skeptical of a white knight waiting in the wings. With outdated store models and staggering financial liabilities, most believe any serious offers will be real-estate driven, not retail-focused. Still, a formal court-supervised bidding process is underway for the remaining six stores, with a deadline looming on April 30.
As Hudson’s Bay battles against time and tides, what emerges may not be a reborn department store—or a department store at all—but a hard lesson in modern retail, responsibility, and resilience.
