Hudson’s Bay, the legendary Canadian retailer, has recently faced some of the biggest storms since it sought creditor protection March 7. The company recently requested court approval to begin liquidating its stores. This decision throws a cloud of uncertainty over its future and threatens the lives of its employees. Furthermore, the company has a colossal debt burden owed to all manner of creditors and stakeholders. Among them are luxury brands Chanel, Columbia Sportswear, and Diesel, something that emphasizes its clear fiscal woes.
The blame for Hudson’s Bay’s financial collapse can be laid on a number of causes. Retailer is now contending with the impact of reduced consumer spending and continued trade tensions between Canada and the U.S. Further, slow pedestrian circulation in downtown retailers continues beyond the pandemic. These insurmountable challenges combined have led the company to fall into dire straits.
Hudson’s Bay has sought approval to sell non-essential goods within its department stores this week. This action is a step to address the company’s financial stability issues. This decision may lead to the permanent shuttering of up to 80 Hudson’s Bay stores nationwide. It would impact three Saks Fifth Avenue stores and 13 Saks Off 5th outlets. Those closures would have dramatic effects on the company’s sprawling workforce of more than 9,364 employees.
Liz Rodbell, the president and chief executive of Hudson's Bay, remains steadfast in her commitment to navigating these turbulent times.
"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," said Rodbell.
Yet despite the difficulty of those times, Rodbell focused on the tsunami of support his company received from customers and associates alike.
The key is the company’s pension plan, which had more than 21,000 members as of Dec. 31. We are told it is “very well funded” and “fully capable of meeting its obligations.” Reformers abhor the supplemental retirement pension plan, which is underfunded to the tune of $66 million. Past and present court documents show that a number of other operating and benefits funds are equally underfunded. This unenviable position further complicates the precarious financial situation Hudson’s Bay finds itself in.
Andrew Hatnay, one of the employees’ attorneys, pointed to the company’s obvious financial trouble. He went on to argue that they should have gone into creditor protection well before that. Hatnay further estimates that cutting staff without compensating them in severance would save the company an additional $100 million.
Employees are very rightfully worried about the possibility of these stores closing and lack of severance pay. Kevin Grell, an attorney for the workers, said that united feeling is the primary concern of employees.
"Obviously in situations like this, the severance is at the bottom of the barrel," said Grell.
"Everybody's come to the conclusion that there may not be severance and they're not happy," Grell added, emphasizing the gloomy outlook for many workers.
Grell went on to paint a picture of the workplace culture of the agency as highly stressful and fearful.
"You can feel the difference. Everybody's concerned. Everybody's scared. Everybody's uncertain what the future holds," he noted.
With potential closures and resultant layoffs of 100,000 employees on the line, many staff are understandably concerned about their livelihoods.
"People have bills to pay and people have mortgages. They don't know what to do and it's just hard because a lot of people are sad," Grell stated.
Henry, a dissenting voice within the company, pointed out the worldwide damage witnessed by employees as production dropped all across the globe.
"They saw it not only in the work decreasing, but they saw it in other areas," Henry remarked.
