What Happens Next For Hudson's Bay?
Canada’s oldest company, Hudson’s Bay, is liquidating most of its 80 stores after seeking creditor protection in March.
Context
Hudson's Bay, Canada's oldest company, is liquidating most of its 80 stores after seeking creditor protection in March.
Six stores were temporarily saved, including the Toronto flagship, though the company must pay creditors by April's end to prevent their closure.
Analysis
Canada’s oldest company, Hudson’s Bay, received remission from an Ontario court to start liquidating at most of the 80 stores, 3 Saks Fifth Avenue and 13 Saks Off 5th stores across Canada.
The company went to court in March to seek protection from creditors under the Companies’ Creditors Arrangement Act (CCAA), as they struggled to pay landlords, vendors, and service providers. Hudson’s Bay said they would liquidate all 96 stores, “unless an alternative solution emerged”.
In negotiations with creditors, the company was able to temporarily save six stores. The six stores that are being saved from liquidation include the flagship store on Young Street in Toronto and the Yorkdale Mall, the Hillcrest Mall, the Carrefour Laval Mall and the Pointe-Claire locations.
However, Hudson’s Bay must pay creditors by the end of April to save these stores from future liquidation. Stores across the country will be running discounts on items until June 15th as they must vacate all liquidating stores by the end of June.
It is estimated that 9,000 workers are expected to be impacted by the liquidation. In the meantime, however, Hudson’s Bay has stopped paying commissions to beauty advisors which has reduced their salaries.
Hundreds of workers in cosmetics and fragrance will now only be receiving base pay, for which Unifor has filed a grievance against the company.
Unifor has called for the company to award $3 million in management bonuses for all workers facing termination.
Some employees of the company are entitled to more than $35,000 in severance pay, according to Unifor. However, as Union Local 240 highlights, only some workers they represent will receive a maximum of $8,800.
Hudson’s Bay can apply for the federal government’s Wage Earner Protection Program, which can provide financial assistance to workers when companies become insolvent. However, according to Toronto lawyer Andrew Hatnay, only a portion of the compensation owed is received.