Don’t shed a tear for Hudson’s Bay. There’s nothing left to mourn

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Jessica Johnson is a senior fellow at the Centre for Media, Democracy & Technology at McGill University. She is the former editor-in-chief of The Walrus and the former copy director of Hudson’s Bay.

There was a time when the demise of an iconic national retailer like Hudson’s Bay Co. would have been a tragedy. The shuttering of Eaton’s in 2000 ushered the country into what can only be described as a period of “retail mourning.” Online nostalgia for Zellers, which closed in 2011, prompted the company’s unlikely return in 2023, if only within select Bay locations. Even the pushback against recent renovations at the Empress Hotel in Victoria and Ottawa’s Chateau Laurier show that historic railway hotels aren’t just a place to grab a $23 cocktail.

With every transition of a landmark business is the sense that a piece of Canada, or at least one of its anchor tenants, was slipping away.

It’s a different story with HBC, which on Friday received court approval to liquidate most of its locations this coming Monday. Founded in 1670, almost two centuries before Confederation, Hudson’s Bay Co. often proudly referred to itself as the “company that became a nation.” The 355-year-old retailer looms over all others in historic significance. And yet, neither on Reddit nor the retail floor did anyone seem to care that much.

In the Bay’s Toronto Queen Street store on Thursday, a sign warned: ESCALATOR ACTING AS STAIRS as customers picked their way down to the subway entrance. A companion sign explained that the company’s rewards points program had been frozen.

You wouldn’t call it business as usual – unless you’re the Bay in 2025. There was hardly anyone in sight to look shocked, except me.

The Bay has had plenty of ups and downs. I worked at the company through some of its recent golden years when the future looked brilliant: Throughout the 2010s, historic department stores worldwide were making a comeback. Bonnie Brooks, fresh off leading a turnaround of Hong Kong’s Lane Crawford, was determined to remake Canada’s equivalent into an international fashion destination.

And for a while, she and her leadership team really did. Influential British designers were flown in to support the relaunch of the Room – the Bay’s long-time luxury fashion department – in 2011. Influencers tagged HBC point blankets and coats on social-media handles from Brooklyn to Tokyo. More than that, the company was making money – from hugely successful holiday One Day Sales, everyday programs for cashmere sweaters and leggings, and of course, Bay Days – “our biggest sale of the season, our lowest prices.”

Then, somehow, it all slid back.

The first inkling that something was off came to me came in 2012 when, at a management retreat, Richard Baker, the American governor of the company that acquired the Bay in 2008, came out to announce an initial public offering. I was the copy director at the time, in charge of translating corporate strategy into marketing campaigns, and thought his decision to come out on stage dressed as Willy Wonka was a bold choice. I don’t remember his exact words, but he said something like, “I’m going to make your dreams come true!”

The Bay’s downfall ensnares vendors, suppliers

Soon after, the company introduced a “north-south” leadership strategy that saw executives from different HBC-owned retail chains including Lord & Taylor and eventually Saks, interspersed with Hudson’s Bay management. I worked in marketing, initially in Toronto and Brampton, Ont., but my department’s “centre of excellence” was determined to be in New York.

One of my first awkward duties was to break it to our new American boss (whom I adored, for what it’s worth) that no, the team couldn’t drive out to Calgary for the day from our headquarters. The day trip was one of his less alarming proposals for Canada, a market about which he (and, I learned, many Americans) knew little.

After the IPO, Mr. Baker and his board pursued an aggressive international acquisition strategy, buying up Saks (2013), Germany’s Galeria Kaufhof (2015) and the failing luxury e-commerce site Gilt Groupe (2016).

To help finance all that, they sold off HBC properties – including the Queen Street flagship, one of the company’s most recognizable assets – to Cadillac Fairview in a landmark $650-million real estate deal, and leased back the locations.

These and other acquisitions may have seemed like a good strategy for Mr. Baker and his holding company, but it’s not clear how they were intended to make Hudson’s Bay a success. Sell off iconic buildings and chip away at a reputation for quality, and what is left of a company? A bunch of clothing that will soon be out of style? That’s what the Bay ended up with.

After the departure of Ms. Brooks in 2013, the company lost the fashion credibility that she and her team had built up in Canada through a rigorous merchandise and marketing strategy.

By the late 2010s, the Bay’s influence on the street was slipping and sale messaging seemed to take over fashion leadership and good value, the company’s previous proposition to customers. Aspirational brands such as Le Creuset, Hunter and Lacoste started to disappear from the shelves and website. Then there was just less of everything.

Kleinfeld Bridal, famous for reality-TV’s Say Yes to the Dress, had launched to great fanfare in Hudson’s Bay in 2014. Before the Canadian location went out of business last year, I bought a wedding dress for $225.99 that had been marked down from an original price of more than $11,000. “I’m glad someone finally saw the potential in that dress,” remarked the cashier as she was ringing up the Lanvin.

Me too! Unfortunately, the purchase – and my approximately 98-per-cent discount – came too little, too late to help HBC or its fortunes.

Arguments will be made that the pandemic killed HBC. It’s true that COVID-19 wasn’t kind to department stores, a retail genre that relied on revenue from in-person shopping long into the era of Amazon Prime. There were bankruptcy filings in 2020 from U.S. retailers JC Penney and Lord & Taylor (the latter owned by HBC), among others. Other big-name businesses, including Brooks Brothers, Bed Bath & Beyond and Nordstrom shut down their bricks-and-mortar operations in Canada.

What to know about Hudson’s Bay liquidation sales

Throughout my career, I’ve worked for at least three Canadian institutions – The Globe and Mail (“Canada’s national newspaper”), Hudson’s Bay (“Canada’s department store”), The Walrus (“Canada’s Conversation”) – with a national focus. That perspective has taught me never to generalize about Canadians. But there’s something I’ve always wanted to say about our shopping behaviour, which is determined not by ideology, but market conditions.

Unlike New Yorkers, who can get anything delivered to their door within a day (if not hours), Canadians are accustomed to higher shipping fees, narrower selection and (before Shopify transformed the market, at least) relatively little e-commerce. The philosophy at HBC in its profitable years was that the Canadian customer would pay a little more for a good value.

I think that’s why the hard-sell tactics of Lord & Taylor and Macy’s – promotional campaigns, attempts to create a sense of urgency – that seemed to underscore the Bay under U.S. leadership never really worked up here. This has changed with online shopping, but as a rule, Canadian customers are slower to purchase, skeptical and cost-aware. “If you launch a product with a sale sticker, people will wonder what is wrong with it,” one Canadian marketing veteran told me.

I also can’t help wondering how the Bay might have fared if it had invested in e-commerce earlier. While more nimble retailers partnered with Amazon, HBC stuck to proprietary software through the 2010s. The platform, with a notoriously clunky search function, also developed a reputation for customer service problems. I’ve heard many stories from people who placed orders, even receiving delivery notices, for patio sets and bridesmaid dresses that never arrived.

When HBC finally did upgrade the online shopping experience through a new platform in 2021, it was probably too late. The customer had moved on, possibly to shopping directly from brands such as Le Creuset and Hunter directly, or from a better option: Simons.

Quebec-based Simons offers on its website much of what the Bay could have hoped to at one time: a good customer service experience as well as chic but affordable household linens, sustainable cotton basics under its Vision private label, and everything from tableware to designer dresses from London.

The Bay has made hard pivots in the past. One of those came when Richard Baker bought the company in a period that looked a lot like this one: stores in poor repair, uncool merchandise, a dearth of customers willing to spend on anything more than a good deal. This time, it doesn’t seem that anyone is coming to bail it out.

Especially right now, with so many Canadians looking to put their money into Canadian businesses, this doesn’t seem like a tragedy. It might have seemed so if HBC had folded back when Eaton’s did. Department stores, brands such as Molson and Tim Hortons – all of them had to do a lot of heavy lifting in standing for Canadian identity.

The country has matured and strengthened a lot over the past 20 years. The next great Canadian department store might be built by new Canadians or Indigenous people, not the fur traders and men whose names long lined the Bay’s boardroom walls. Now those founding myths of exploration and colonialism look off-message.

That’s why the potential permanent closing of Hudson’s Bay, long owned by an American who used it and lost it in pursuit of other endeavours, doesn’t seem something worth fighting for other than to save 9,000 Canadian jobs.

The future is more exciting. It might be time to build another great department store, one that’s actually owned and operated by Canadians.

It should offer fast reliable shipping to all 13 provinces and territories, focus on Canadian products and services, and employ Canadians. It should definitely have a fantastic website.