Hudson’s Bay Company (HBC) will return 25 of these former retail properties back to their landlords. This decision ends a legal battle over leases that had been contested by B.C. billionaire Ruby Liu. HBC ultimately chose to proceed with the Reorg Plan and continued on its path of restructuring. This comes after a judge’s ruling in September that sided with the landlords, allowing them to take back the buildings.
HBC was forced to file for creditor protection earlier this year. It discounted all of its inventory since then and shuttered 105 total stores, including 80 Lord & Taylor locations and 16 Saks Fifth Avenue stores. Among these contested properties were those that were leased from some of Canada’s largest commercial landlords, including Cadillac Fairview, Oxford Properties, and Ivanhoé Cambridge. Liu attempted to purchase the leases for $69.1 million. HBC fought back, questioning her business plan and lack of experience.
In her proposal, Liu did not shy away from making a major investment in the properties. She intended to hire employees, buy inventory, renovate the spaces, and open the new department store locations under a new brand named after her. For all her ambitions, HBC contended that Liu’s inexperience created “substantial concerns” over whether she could successfully execute her business plan.
Now that decision is up to the court. If no landlord objects, on November 27, HBC will officially disclaim the leases of the 25 properties. This development brings clarity to the process and enables Oxford Properties to proceed with its plans for the leased sites.
“This brings some certainty to this lengthy and costly process and allows us to move forward.” – Josh Burleton, spokesperson for Oxford Properties
Liu has already received court approval to acquire three other leases in British Columbia malls: Woodgrove Centre, Mayfair Shopping Centre, and Tsawwassen Mills. These assets will be the backbone of her new enterprise focused on reimagining the retail economy.
This ruling is a big win for HBC as it continues addressing its ongoing financial woes. It further highlights the intense competitive pressures in the Canadian retail market. As HBC retreats from these places and ceases to believe it can win from them, it creates openings for other retailers, including Liu’s intended department store.
