As of April 25, all of Hudson’s Bay’s 80 department stores are in active liquidation, along with its Saks Fifth Avenue and Saks OFF 5th locations. That’s millions of square feet of new vacancy that can be transformed into multiuse spaces.Getty Images
The perfume counters are gone. So are the escalators and the endless racks of men’s polos, blenders and bedsheets. In their place: the pop of a plastic ball, the squeak of sneakers and a flood of laughter.
Welcome to the reinvention of the Canadian department store.
Across the country, pickleball – and companies like Pickleplex Social Club – are breathing life into the cavernous shells of failed retail giants such as Sears Canada, Target and, soon, Hudson’s Bay. These spaces, once bustling with bargain hunters, are now drawing the kinds of crowds traditional anchors haven’t seen in years.
The new mall anchor
“I like to tell people we’re the antidote for failing big boxes,” says Steven Fry, Pickleplex’s co-founder and president. “In the world of e-commerce, recreational use is where things are going. You’re seeing malls repurposed to bowling alleys, pickleball facilities and indoor go-kart tracks.”
Mr. Fry’s company is growing fast. Founded in 2024, Pickleplex has already secured leases in 26 locations across the country, many inside former department stores.
Some of those locations are open, while others are under construction, with each spanning between 18,000 to 55,000 square feet and featuring multiple courts and lounge areas.
With visitor numbers reaching 2,000 a week at some sites, that’s significant foot traffic, which is exactly what some mall owners are desperate for.
Death of the department store
It’s no secret that traditional retail in Canada is in retreat. Zellers faded in the early 2010s. Target came and went in under a few years. Sears Canada shuttered in 2018. Nordstrom died. Toys R Us and Bed Bath & Beyond retreated to mostly online.
And now, iconic Hudson’s Bay Company, which reached its 355th birthday on May 2, is undergoing a massive contraction that will perhaps herald the death of Canada’s oldest department store.
Entertainment and experience-driven companies such as Pickleplex Social Club, a pickleball spot, are occupying the spaces of vacant department stores as Canada’s malls undergo a revolution.Supplied/Pickleplex Social Club
As of April 25, all of Hudson’s Bay’s 80 department stores are in active liquidation, along with its Saks Fifth Avenue and Saks OFF 5th locations. All told, that’s millions of square feet of new vacancy, some of it in prime urban markets such as downtown Montreal and Toronto, although much of it is in suburban and small-city locations across Canada.
It’s the final chapter of the traditional department store in Canada as the era of one-stop retail is dead, according to Kate Camenzuli, vice-president of retail at CBRE, a leading commercial real estate service.
Shoppers now want curated experiences, like what Apple, Lululemon or Aritzia offers, not endless aisles of product, she notes.
But for Ms. Camenzuli, the demise of large format stores is a “massive blessing” since it frees up coveted retail space in vibrant markets and offers a tabula rasa in weaker areas that have too much retail.
“In those challenging, other locations, I think that people are going to have to get creative, and I don’t think retail is going to be the answer,” she says.
Meeting modern needs in forgotten spaces
In place of vacant big-box stores, Ms. Camenzuli sees an opportunity for health care services – including preventative medicine – and housing, particularly for seniors.
She isn’t speaking in hypotheticals. In Newfoundland, a shuttered Costco has become a hospital facility, dovetailing with other seismic trends of an aging population and a health care crunch.
Each of Pickleplex’s locations spans between 18,000 to 55,000 square feet and feature multiple courts and lounge areas.Supplied/Pickleplex Social Club
“Pickleball and other entertainment [replacement tenants] are fun, and I think there’ll be some market for it,” Ms. Camenzuli says. “But I think we are very good at overkill of things, and so the one thing that is needed for overkill is medical and health-related services.”
Retail analyst, adviser and speaker Bruce Winder agrees that location is everything.
Popular malls can carve up large vacant stores into smaller plots and fill them with premium retail or turn floor space into a luxury food hall, Mr. Winder explains, pointing to downtown Toronto’s Eaton Centre, which is filling an abandoned Nordstrom store with an Eataly, Nike and Simons. “The B-list malls, that’s where things get a bit more creative,” he says.
Mr. Winder has seen or heard it all – from tutoring centres and virtual-reality arcades to a Toyota car dealership in a former Sears at the West Edmonton Mall, to co-working offices inside former anchor tenants.
He says some mall landlords are going further and demolishing old buildings to make way for condos – something Quebec’s CF Carrefour Laval mall is doing by using the footprint of an old Sears store to develop at least 365 residential units.
Landlords see new life in old leases
As shocking as Hudson’s Bay’s collapse might be, it may be better for both landlords and consumers in the long run as many locations didn’t keep up on their rent payments and failed to bring people to malls, Mr. Winder says.
For landlords, there’s an opportunity to “do better,” he adds – to trade up to tenants who reliably pay rent and drive strong foot traffic.
At Pickleplex, Mr. Fry has set his sights on leasing some of the motherlode of retail space that will soon hit the market. “I’m all over the Bay, all over it,” he says. “They’ve got some of the best real estate in the country.”
There’s just one catch: Hudson’s Bay stores may be too much of a good thing.
With most Hudson’s Bay stores occupying at least 120,000 square feet, Pickleplex can’t fill them alone. That’s why Mr. Fry envisages potentially co-tenanting with other experience-driven businesses, such as grocery stores, fitness centres or medical tenants.
What’s driving all of this isn’t just a love of paddle sports – it’s a broader reset of how consumers use space and what they want from the places they go.
E-commerce has stripped the need for physical inventory. What’s left is what Amazon can’t deliver: connection, motion, community.
Canada has millions of square feet of former retail space waiting to meet that need. Pickleplex is doing its part – one volley at a time.
“I feel like we are selling happiness,” Mr. Fry says. “The number of smiles and fun happening in our clubs, it’s incredible to see.”