Store closing ads at a Hudson's Bay in Toronto. By the time Canada’s oldest retailer ceases to exist in any form, it will no longer be called Hudson’s Bay.Nathan Denette/The Canadian Press
Just weeks after shutting all its department stores across Canada, Hudson’s Bay Co. is seeking to shed its historic name.
The company will return to court next Monday seeking approval to change the names of its various corporate entities as part of a $30-million deal to sell its intellectual property to Canadian Tire Corp. Ltd. Corp.
Under the conditions of that deal, which received court approval on June 3, Hudson’s Bay must change its name within 45 days of the transaction closing. Court documents filed this week did not reveal the new name but specified that it must be “dissimilar to, and cannot be confused with ‘Hudson’s Bay Company,’ ‘Hudson’s Bay,’ or ‘HBC’” or any other variations on the Bay name.
The move is likely intended to protect the value of the Bay’s brands, which Canadian Tire is hoping to maximize. The retailer has not yet specified its plans for the intellectual property but could sell merchandise in its stores branded with the Bay name or its iconic stripe design.
If it receives court approval, Hudson’s Bay will file articles of amendment to change its corporate names, including the name that will be used in further court proceedings as the company winds down its business. By the time Canada’s oldest retailer ceases to exist in any form, it will no longer be called Hudson’s Bay.
In the same document, filed with the Ontario Superior Court of Justice in Toronto on Monday, Hudson’s Bay revealed that it has hit a snag in a deal with a billionaire B.C. mall owner who is seeking to acquire as many as 28 of its store leases.
Weihong Liu, chairwoman of Nanaimo, B.C.-based real estate investment company Central Walk, reached a deal last month with Hudson’s Bay to take on the leases, pending agreements with landlords and court approval. A Central Walk news release touted plans to launch “modern department stores” in those spaces. Ms. Liu has been vocal on Chinese social-media platform RedNote that she wanted to launch stores called “New Bay” – a plan likely to run into trademark issues, according to legal experts. More recently, Ms. Liu, who also goes by the name Ruby, told trade publication Retail Insider that she plans to call the stores “Ruby Liu.”
According to court documents, executives from Central Walk met with landlords between June 2 and 4, along with representatives from Hudson’s Bay, the court monitor and the advisers who ran the sale process for the company’s leases. Central Walk also sent letters to the landlords on June 6, describing the business plan for each of the locations.
“Certain Landlords have sent letters to the Company outlining their information requests and concerns,” according to an affidavit sworn on Monday by Hudson’s Bay chief operating officer and chief financial officer Michael Culhane. “The Company is actively engaging with Central Walk to address these information requests and concerns in a timely manner and is hopeful that all matters can be resolved consensually.”
At next week’s court hearing, the company will seek approval to assign three of the leases, all of which are located at shopping centres that Central Walk owns: the Mayfair Shopping Centre in Victoria, Tsawwassen Mills in Tsawwassen, just south of Vancouver, and the Woodgrove Centre in Nanaimo.
Central Walk has agreed to pay $6-million to take over those three leases, according to court documents, which specified that the offer “was superior to all other bids” for those locations.
The court-supervised process to sell off the company’s leases drew 12 bidders; 62 of the properties received no bids, and Hudson’s Bay is preparing to hand those locations back to landlords.
Hudson’s Bay was first granted court protection from its creditors on March 7 under the Companies’ Creditors Arrangement Act as it struggled with mounting losses and trouble paying its bills. The company, which carried $1.1-billion in debt as of early March, has been working to repay its senior lenders with proceeds from its liquidation sales and by selling off its assets.
Unable to find backers for a plan to save even a handful of its stores, the retailer closed all of its 80 Hudson’s Bay locations, as well as two Saks Fifth Avenue and 13 Saks Off 5th stores that the company operated in Canada. The last of the stores closed for good on June 1, when the clearance sales ended.
The store closures have led to job losses for thousands of employees, who were let go without severance. Approximately 2,200 retirees also saw their health and dental benefits cut off at the end of April, along with their life-insurance policies. And nearly 200 people are facing the loss of long-term disability benefits, which were paid out of the company’s cash. Lawyers appointed by the court as representative counsel for the HBC employees have been holding discussions with Hudson’s Bay and its senior lenders about the possibility of creating a “hardship fund” for people affected by the loss of benefits.