The Hudson’s Bay Company, or The Bay as most Canadians call it, is in deep financial trouble. Even so, it manages to appeal to a relatively large market. The retailer’s long list of creditors, which stretches 26 pages, shows the depth of its financial liabilities. Among the creditors is Robin Yates, co-founder of the luxury outerwear company Nobis. It’s the Bay that should owe him close to six figures. The Bay was unable to pay Nobis, developing a deep arrearage. In order to maintain a healthy business, Yates chose to sever his relationship with that retailer a few years ago. On top of that, The Bay owes Toronto womenswear designer Hilary MacMillan $2,641, noted in recent court filings.
Chief Financial Officer for the Bay, Jennifer Bewley, confirmed that the company has put off payments to vendors for the past three months. She cited "significant challenges to its ability to make payments" as the reason for these delays. To address these challenges, The Bay has commenced a Companies’ Creditors Arrangement Act (CCAA) process. This action immediately stops payment to creditors, including vendors.
"Payments to creditors including vendors are stayed at this time," confirmed Tiffany Bourré, a Hudson's Bay spokeswoman.
Despite the Bay’s financial woes, it remains a one-of-a-kind shopping experience. It’s its highly curated assortment of merchandise that really makes it unique to other retailers. Robin Yates shared his reflections on what made The Bay unique and special, particularly their heavy dependence on private label. At the same time, he noted that The Bay’s closing down isn’t much cause for alarm for luxury brands such as Nobis.
"They lost that customer some time ago," Yates stated.
The decline of The Bay coincides with the arrival of Simons' new outlet at the Toronto Eaton Centre, located just down the street from The Bay's flagship store. This major development is just another sign of the evolving Canadian retail landscape. Today’s traditional department stores find themselves facing brutal competition from these newer, nimbler upstarts.
When he visited The Bay in June of last year, veteran industry watcher Robert Ott noted that The Bay’s decline has been a longtime coming. He applauded the retailer’s critical contribution to the 1980s and 1990s. It helped grow the big Canadian womenswear lines by providing these brands invaluable exposure to millions of pairs of eyeballs at home and abroad.
"Getting in there … allowed us to have our collections in many stores across Canada. Exposure to their customers in their market was honestly amazing," Hilary MacMillan recalled.
While developments like The Bay’s new docks are certainly needed in today’s climate, as Ott noted retailers are struggling to keep their heads above water. He noted that because of various disruptions in the industry, Canadian consumers have been less brand loyal in the last decade than ever before.
"Canadian consumers have very, very little brand loyalty just because of the upheaval in the last 10 years," Ott explained.
To try to save the Bay, it has looked into a number of other solutions to remold and reposition its business. This is all part of its broader strategy to fine-tune its merchandise mix and solidify its brand identity in the increasingly cut-throat retail environment. These challenges have existed for decades, outlining systemic, inherent problems in the corporation.
