Canada’s oldest retailer, Hudson’s Bay Company, is undergoing a restructuring through a process similar to bankruptcy proceedings after struggling to pay its debts.
The 355-year-old company that operates Hudson’s Bay department stores and TheBay.com announced Friday it had received Canada’s Companies’ Creditors Arrangement Act (CCAA) creditor protection from the Ontario Superior Court of Justice.
The CCAA lets “insolvent corporations that owe their creditors in excess of $5 million to restructure their business and financial affairs,” according to the Canadian government’s website.
Under the proceedings, Hudson’s Bay will seek to “restructure its operations, streamline costs, and refocus its core strengths,” the company said.
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“Our goal is to re-establish our foothold and ensure the company’s long-term place in the evolving Canadian retail market,” CEO Liz Rodbell also said. “As we go through this process, we will continue to show up for our customers and communities, as we always have.”
The retailer’s physical footprint includes 80 Hudson’s Bay stores. It also operates three Saks Fifth Avenue stores and more than a dozen Saks Off 5th shops in Canada via a licensing agreement, locations that will continue to serve customers, according to Hudson’s Bay.
Rodbell said the company “worked with potential investors to refinance a portion of our credit facilities to improve our liquidity and support our business plan” earlier in the year but the “threat and realization of a trade war has created significant market uncertainty and impacted our ability to complete these transactions,” prompting it to seek the creditor protection.
Trade relations between the U.S. and Canada have been fluid in recent weeks.
President Donald Trump implemented a 25% tariff on imports from Canada on March 4 after a monthlong pause, prompting retaliatory levies. Later in the week, he put in place exemptions for Canada on goods under the United States-Mexico-Canada Agreement until early April.
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Hudson’s Bay also said it and other Canadian retailers have been contending with “post-pandemic shifts” in the retail industry and “subdued” discretionary consumer spending from high costs of living, mortgage rates and other economic factors.
It received approval for $16 million CAD in “interim debtor-in-possession financing” from Restore Capital and other lenders, according to the company.
Hudson’s Bay is looking into “strategic alternatives” and having discussions to “explore potential solutions to preserve and strengthen its business,” it said.
The company described itself in a court filing as the “oldest company in North America” and Canada’s “most prominent department store.”
The company dates back to 1670, when it received a “right of sole trade and commerce” from the King of England for what ultimately became Manitoba and parts of Saskatchewan, Alberta, Nunavut, Ontario and Quebec, according to a court filing.
Hudson’s Bay employs over 9,300 people, according to a court filing.
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