Hudson’s Bay Company, a retail giant with a rich history spanning 355 years, is currently undergoing a significant restructuring process. The company, known for its iconic department stores and intellectual property, including the rights to its distinctive Stripes motif, is actively seeking a new owner as it navigates financial challenges.
Jennifer Bewley, the Chief Financial Officer of Hudson’s Bay’s parent company, echoed that as she described the “ongoing plans to restructure”. As part of this long-term process, they are looking at every possible option to make the company sustainable in the long run. The restructuring comes in the wake of closures of several stores and the need to reassess their business model amid changing retail landscapes.
Today, Hudson’s Bay is down to just 96 remaining full-line department stores in Canada. The continued volatility has left Hudson’s Bay with little choice but to take unprecedented strides. They planned to close nine of their 13 Saks Off Fifth stores by April 27 and the rest by June 1. The company now intends to shutter all of the rest of its Hudson’s Bay stores by June 15 under its court-approved restructuring plan.
Instead, Hudson’s Bay has announced controversial store closures which further muddle the company’s financial picture. To complicate matters even more, the company leases hundreds of thousands of square feet of retail space. The company is conducting sales processes aimed at finding a new owner for both its business operations and intellectual properties.
Insiders had to notify sales process overseers of any plans to bid by a certain date. Firms and prospective investors not already affiliated with Hudson’s Bay had a hard stop. They had to make binding bids for the company and its intellectual property by April 30. At the same time, bidders were required to submit binding bids by May 1 for Hudson’s Bay’s leases.
Hudson’s Bay is preparing for the transition to begin on October 4. If it gets more than one competing bid for the business or its assets, they intend to conduct an auction with other bidders by May 16. The company must get court approval for a buyer by May 30.
“The process will be conducted with integrity and fairness.” – Jennifer Bewley
With Hudson’s Bay, we will always endeavor to be transparent in the bidding process. This commitment is particularly significant given the context of insider access to possible bidders.
The urgency of the situation is a symptom of the tsunami washing over all brick-and-mortar retail businesses these days. Rapid shifts in consumer behavior combined with more aggressive competition from e-commerce marketplaces has left many traditional retailers struggling to adapt. To thrive in this changing world, Hudson’s Bay needs to move fast.
With the December auction date approaching, this is an important issue that stakeholders on both sides will be watching closely. Hudson’s Bay has a deep historic significance in Canadian retail. Its immediate future is now determined by the outcome of the current sales processes and the plans adopted during this critical phase of restructuring.
