Hudson’s Bay in Park Royal shopping centre in West Vancouver, B.C. on March 27. Canada’s oldest retailer is one week away from a deadline for bids to be submitted in the sale process for the company’s assets and operations.Isabella Falsetti/The Globe and Mail
Hudson’s Bay Co. has received expressions of interest for dozens of its leases, some of which have come from potential bidders for the retail business.
Canada’s oldest retailer is one week away from a deadline for bids to be submitted in the sale process for the company’s assets and operations. That sale is being conducted separately from the bidding for 96 leases on its stores and four leases on its distribution centres.
Parties interested in the leases had to declare their intentions earlier this month. In total, 18 possible bidders have now submitted letters of intent, expressing interest in 65 leases, according to a court filing on Tuesday – although that does not indicate interest in 65 separate leases, since there is overlap in certain leases that have drawn interest from several bidders.
Multiple letters of intent said that the interested party would also be making a submission under the bidding for all or part of the company, according to a report from the monitor overseeing the Bay’s creditor-protection process. Some of the letters also came from the retailer’s own landlords, according to the report.
The company received no interest for 36 of its leases, and is now considering whether they should be disclaimed – something that could affect the timing of store closings.
Bids for the leases are due on May 1, the day after the bidding deadline in the sale process.
Faltering under mounting losses and $1.1-billion in debt, Hudson’s Bay was granted court protection from its creditors on March 7 under the Companies’ Creditors Arrangement Act.
Tuesday’s filing also revealed that a surge of interest in the liquidation of the department stores has resulted in sales that exceeded the company’s own projections.
The clearance sales began on March 24 at all but six of Hudson’s Bay’s stores across Canada. Those six were initially left out of the liquidation, because the company was hoping a bidder would step forward with a plan for the future that could save some of its locations. In a court filing on Wednesday, however, the Bay disclosed it would begin liquidations at the remainder of the locations.
From March 15 to April 18, a period that included the first four weeks of the liquidation, Hudson’s Bay reported $235.7-million in retail sales as more people visited its stores and website looking for deals.
The sales growth was offset slightly by an increase in gift card redemptions, as shoppers raced to use those cards before they expired on April 6. As of Feb. 1, outstanding gift cards amounted to a total of $24.1-million, according to court documents.
But there are signs that the early enthusiasm is tapering off. Sales have begun to slow down, the monitor’s report noted.
The report also noted that the proposed auction of the company’s art and historic artifacts, including its 1670 charter, will proceed quickly if it receives court approval. Bidders will be asked to submit letters of interest by April 30. Canadian fine art auction house Heffel Gallery Ltd. has been chosen to handle the sale, according to a new court document filed on Wednesday.
“The separate Art Auction Process will provide greater transparency in the monetization of these unique and culturally significant assets and will be conducted by professionals with expertise in managing the sale of assets of this nature,” the report stated.
A court hearing in the matter is scheduled for Thursday.