Winnipeg shoppers 'heartbroken' as future uncertain for Hudson's Bay Co.
Storied department store company moving forward with restructuring after being granted creditor protection
Winnipeggers are lamenting the potential loss of a fixture in the city's history, with several Hudson's Bay Co. stores now possibly on the chopping block after the storied retailer was granted creditor protection.
The company started restructuring proceedings Friday, saying in court documents it's having trouble paying back landlords, service providers and vendors, and that it's had to defer some payments for months.
A source familiar with the matter said Hudson's Bay is looking at closing around 40 of its 80 stores, although numbers could change, according to The Canadian Press.
On Wednesday, shoppers outside the Bay's Polo Park mall location — one of two remaining in Winnipeg, along with the St. Vital mall store — said they're upset the proceedings could end the company's presence in a city it's been inextricably linked to throughout its 355-year history.
"It's Winnipeg heritage," Troy Richards said. "The Bay's always been around for Winnipeg. For us, it's a hallmark."
WATCH | Winnipeggers reminisce about The Bay:
Donna Galloway used to work at the Bay.
"Sears is gone, Eaton's is gone.… But the Hudson's Bay — really?" she said.
"The history of it, just to see that go by the wayside on our time — yeah, I'm absolutely heartbroken."
An affidavit filed by Hudson's Bay's chief financial officer shows the company employs 183 people in Manitoba, 78 of whom are full-time staff.
The retailer has more than 9,000 employees across Canada.
The monitor tasked with overseeing the creditor protection proceedings said Hudson's Bay generated a net loss of about $329.7 million over a 12-month period ending on Jan. 31.
In a release issued Friday, CEO Liz Rodbell said the proceedings are necessary to ensure the company "remains a part of Canada's retail landscape."
Struggle to adapt
In her affidavit, Hudson's Bay chief financial officer Jennifer Bewley said the company struggled for years to adapt to a decline in foot traffic amid an evolving retail landscape and competition from online players.
The company was taken private shortly before the COVID-19 lockdowns. Bewley said the pandemic led to a "significant decline" the company has been unable to recover from.
In late 2020, Hudson's Bay shuttered its landmark department store on Winnipeg's Portage Avenue, a six-storey building opened in 1926 that was once the Bay's flagship store in the country.
It was acquired in 2022 by the Southern Chiefs' Organization, which represents 34 Anishinaabe and Dakota First Nations in southern Manitoba, and is remaking it into a mixed-use development called Wehwehneh Bahgahkinahgohn — "It is visible" in Anishinaabemowin.
Amelia Fay, curator of the Hudson's Bay Museum collection at the Manitoba Museum, said it's odd to see a company that's reinvented itself several times since its founding unable to change.
"We've seen them change significantly, from small fur trading posts later into wholesale operations later into real estate and retail department stores," she said.
"Certainly knowing … all the various kind of storms they've weathered throughout this, it's a little bit, I guess, surprising that it's coming now."
Chi Liao, an associate professor of finance at the University of Manitoba, said the news is not at all unexpected.
"Historically, department stores have sort of catered to the middle class," she said. "As that middle class sort of declines and ... is having trouble paying their bills because of inflation or whatever else, then the consumer base for the department store is in decline."
Losing an anchor
Bewley's affidavit said Hudson's Bay pursued an "aggressive" e-commerce expansion between 2021 and 2022, investing about $130 million in the strategy.
Robert Warren, a professor of retail at the University of North Dakota and a former Winnipeg resident, said the company was late to the game.
"It is tough for them to kind of break into that market, especially with all the established players, whether it's companies like Shein or whether it's Amazon," he said.
Warren said the Bay is an "anchor store" — the primary tenant in a shopping mall that draws customers because of the variety of products and services it sells.
"If they lose a store like the Bay … you're talking about a large footprint of retail space that has to be filled with new tenants," he said.
"You're also going to lose that anchor. So what you're hoping is that your selection of stores in the mall is enough to draw customers back in."
The operator of the St. Vital Centre declined to comment.
Cadillac Fairview — which owns Polo Park — said in a statement it's too early to speculate about what will happen at its shopping centre.
A Hudson's Bay spokesperson said in an email no decisions have been finalized at this time.
Stores producing the best returns will stay open, Warren said, and "historically, Winnipeg's been a good market for the Bay."
"So I look to see Winnipeg come out not completely unscathed, but not as bad off."
In his ruling granting the company creditor protection, Ontario Superior Court Judge Peter Osborne wrote that "it is hard not to have a sense of melancholy."
"It was founded in 1670. Now, approximately 355 years later, it is insolvent and seeks protection from its creditors."
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With files from Matt Humphrey and The Canadian Press