Hudson's Bay Company has signalled its readiness to take the next major step in its creditor protection and restructuring process, a move that will significantly reshape Canada's commercial retail real estate market and result in major job losses.

In an announcement on Friday night, the Canadian department store retailer announced a "store-by-store liquidation process" will begin as soon as this week.

On Friday, March 14, 2025, the company filed additional documents with the Ontario Superior Court of Justice indicating that it has only secured limited debtor-in-possession financing, which now necessitates the "full liquidation of the entire business."

"Assuming receipt of a Court order on Monday at the 'comeback motion,' store liquidations will begin next week," reads the news release last Friday.

According to the latest court documents, Hudson's Bay intends to conclude its liquidation process by no later than June 15, 2025, at which point its store locations would also close.

During the liquidation process, Hudson's Bay, Canadian Sasks Fifth Avenue, and Saks Off 5th stores will remain open, as will the company's online store — for a limited time. Additional information will be shared on the impacted store locations, closure timelines, and final sales events. Once the liquidation sale process begins, all sales will be final. These details could come within the next few days.

Currently, within Canada, Hudson's Bay operates 88 full-line stores, as well as three Saks Fifth Avenue stores and 13 Saks OFF 5th stores operating under license agreements.

This includes 32 Hudson's Bay stores in Ontario, 16 in British Columbia, 13 in Alberta, 13 in Quebec, two in Manitoba, two in Nova Scotia, and two in Saskatchewan. Additionally, there are two Saks Fifth Avenue stores in Ontario and one in Alberta. As for Saks OFF 5TH locations, there are seven in Ontario, two in British Columbia, two in Alberta, one in Quebec, and one in Manitoba.

It also leases four distribution centres, including one in British Columbia and three in Ontario.

Hudson's Bay employs about 9,400 people, including 647 of whom are unionized.

This announcement marks the most significant development since Hudson's Bay filed for creditor protection under the federal Companies' Creditors Arrangement Act (CCAA) on Friday, March 7, 2025, which the court granted that same day.

CCAA provides Hudson's Bay with temporary court protection against its creditors from seizing the company's assets and properties for an initial period of 10 days (up until March 17, 2025), at which point the company can seek the court's permission for further extensions. This also includes the suspension of rent payments owed for the store locations that are leased and ensuring the company continues to have uninterrupted access to its bank accounts. The next court hearing is scheduled for March 17.

"Our team has worked incredibly hard to identify a viable path forward, and our resolve is strengthened by the overwhelming support from customers and associates who have shared heartfelt stories about Hudson's Bay and what our stores have meant to them, their families, and their communities across the generations," said Liz Rodbell, president and CEO of Hudson's Bay, on Friday, March 14.

"These powerful experiences remind us why we must continue to pursue every possible opportunity to secure the necessary support from key landlords and other stakeholders to save The Bay."

Although the outlook is now very bleak for a company founded in 1670, Hudson's Bay remains hopeful that key stakeholders, particularly its landlords, will engage in exploring alternative restructuring paths to preserve jobs, retail tenancies, and a company of deep historic significance — before it is too late.

Some of Hudson's Bay's largest and locations of greatest historical significance are tied up in a 2015 joint venture with RioCan Real Estate Investment Trust.

The joint venture is largely controlled by Hudson's Bay, which owns 78 per cent of the partnership. RioCan owns the remaining 22 per cent.

This joint venture owns 12 Hudson's Bay locations in total comprising five freehold stores (downtown Vancouver, downtown Montreal, downtown Calgary, downtown Ottawa, and Devonshire Mall in Windsor) and five head leasehold stores (Yorkdale Shopping Centre and Scarborough Town Centre in Toronto, Square One Shopping Centre in Mississauga, and Carrefour Laval and Promenades St. Bruno near Montreal), plus two stores jointly owned by the joint venture and RioCan, each holding a 50 per cent stake.

Court documents state that 70 per cent of the rent and other payments made by Hudson's Bay to the joint venture were intended to be used to cover property operating costs, ground lease payments to landlords under head leases, general administrative expenses, and debt servicing for the joint venture's mortgages and other financial obligations.

Among all locations, the downtown Vancouver flagship store carries the largest mortgage, totalling $202 million, set to mature at the end of April 2025. This is also a freehold property held by the joint venture.

In February 2022, Hudson's Bay revealed a major high-density, mixed-use redevelopment concept of its downtown Vancouver store with significant office space, and new retail and restaurant uses, including a downsized department store location. The proposal's concept is expected to see some revisions that remove some of the new office space to make way for the inclusion of a rental housing component.

Other properties involving RioCan and/or the joint venture umbrella include the downtown Montreal store (mortgage of $161 million), Georgian Mall store in Barrie (mortgage of $135 million), downtown Calgary store (mortgage of $105 million), downtown Ottawa store (mortgages of $73 million), Oakville Place Shopping Centre store (mortgage of $87.4 million).

Hudson's Bay engaged in the CCAA process after its unsuccessful attempts earlier in 2025 to have potential lenders refinance some or all of its debt and improve its liquidity position.

The company last secured major financing with a $200 million loan in 2023 from an affiliate of Cadillac Fairview (CF), a commercial real estate firm that owns and operates some of Canada's largest shopping centres, including properties with Hudson's Bay stores. CF is a subsidiary of the Ontario Teachers' Pension Plan. A portion of this credit facility was repaid, reducing the balance to $176 million.

According to court documents, Hudson's Bay implemented a "series of cost-cutting measures" during 2023 and 2024, including workforce reductions and cuts to marketing budgets. This resulted in an overall $100 million reduction in selling, general, and administrative expenses.

During this period, customers also began noticing a sharp rise in deferred maintenance at stores, especially the downtown Vancouver store, with issues such as closed elevators and escalators, as well as inoperable light fixtures and heating and cooling systems.

These cuts followed Hudson's Bay's investment of approximately $130 million in 2021 and 2022 to expand its e-commerce strategy in response to declining foot traffic at its brick-and-mortar stores during the pandemic. This also follows the March 2020 decision to take Hudson's Bay private.

As of Jan. 1, 2025, Hudson's Bay had only about $3 million cash on hand. The company has about $1.294 billion in secured debt obligations, including $315 million in trade payables (such as merchandise brands), $422 million in pre-filing secured debt, and $724.4 million in mortgage obligations.