TSL Express Daily News

TORONTO--(BUSINESS WIRE)--Hudson’s Bay Company ULC (Hudson’s Bay or the company), the Canadian entity that comprises the retailer Hudson’s Bay and TheBay.com, today announced that it has commenced proceedings under the Companies’ Creditors Arrangement Act (CCAA) pursuant to an initial order for creditor protection from the Ontario Superior Court of Justice (Commercial List) (the Court). Pursuant to the Initial Order, the Court has appointed Alvarez & Marsal Canada Inc. as the monitor to oversee the CCAA proceedings.

After careful consideration of all reasonably available alternatives, the decision to seek protection under the CCAA was made in consultation with Hudson’s Bay’s legal and financial advisors. Among other things, the Initial Order provides for a stay of proceedings in favour of Hudson’s Bay and its subsidiaries for an initial period of 10 days, subject to extension thereafter as the Court deems appropriate. The stay of proceedings is also extended to Hudson’s Bay’s real estate joint venture with RioCan.

Restore Capital, LLC, an affiliate of Hilco Global, together with other lenders, has committed to provide interim debtor-in-possession financing to finance Hudson’s Bay’s operations in the lead up to the “comeback motion” hearing, with a CAD$16 million advance approved earlier today. Hudson’s Bay will be seeking additional financing to fund its operations during the CCAA proceedings.

“Hudson’s Bay has been a vital retailer to Canadians for generations, and this decision was made with the best interests of our customers, associates and partners in mind,” said Liz Rodbell, President and CEO of Hudson’s Bay. “While very difficult, this is a necessary step to strengthen our foundation and ensure that we remain a significant part of Canada’s retail landscape, despite the sector-wide challenges that have forced other retailers to exit the market. Now more than ever, it is critical that Canadian businesses are protected and positioned to succeed.”

Ms. Rodbell added, “Earlier this year, we worked with potential investors to refinance a portion of our credit facilities to improve our liquidity and support our business plan. However, the threat and realization of a trade war has created significant market uncertainty and has impacted our ability to complete these transactions.”

The company is exploring strategic alternatives and engaging stakeholders to explore potential solutions to preserve and strengthen its business. While no assurances can be provided, these discussions reflect Hudson’s Bay’s commitment to preserving jobs and community ties where possible.

Ms. Rodbell added, “Hudson’s Bay remains deeply connected to Canada and is focused on the future. Our goal is to re-establish our foothold and ensure the company’s long-term place in the evolving Canadian retail market. As we go through this process, we will continue to show up for our customers and communities, as we always have.”

Like many retailers, Hudson’s Bay has been navigating significant macroeconomic and industry-wide pressures, including:

• Trade and Financing Uncertainty: Ongoing trade tensions with the U.S., including the new and wide-ranging tariffs on exports to the U.S., together with retaliatory tariffs imposed by Canada on U.S. imports, have created economic uncertainty, directly impacting refinancing efforts and limiting access to the capital needed to support the business.
• Post-Pandemic Shifts: Marked shifts in Canada’s corporate culture resulting from work-from-home policies has created a permanent and drastic population reduction in downtown stores. This, among other long-lasting impacts of pandemic-related challenges, has put significant pressure on the retail sector.
• Economic Headwinds: Rising costs of living, higher mortgage rates, and a weakening Canadian dollar have strained household budgets, leading to subdued discretionary consumer spending and broader economic challenges.

The CCAA process will allow Hudson’s Bay to restructure its operations, streamline costs, and refocus on its core strengths. Through a license agreement, Hudson’s Bay Company ULC has a small footprint of Canadian Saks Fifth Avenue and Canadian Saks OFF 5TH stores. These stores will also continue to operate.

The CCAA proceedings do not affect U.S.-Saks Global, which is a standalone entity distinct from Hudson’s Bay Company ULC.

About Hudson’s Bay Company ULC

Hudson’s Bay Company ULC is a Canadian entity that includes the retail company Hudson’s Bay, comprising 80 stores and TheBay.com. Through a licensing agreement, 3 Saks Fifth Avenue and 13 Saks OFF 5TH stores also operate in Canada under Hudson’s Bay Company ULC.

Additional Information

Court filings as well as other information related to Hudson’s Bay Company’s CCAA proceedings will be available on the Monitor’s website at www.alvarezandmarsal.com/HudsonsBay. Information regarding the CCAA process may also be obtained by calling the Monitor’s hotline at (416) 847-5157 (toll free), or by email at hudsonsbay@alvarezandmarsal.com. Hudson’s Bay will continue to provide updates regarding the CCAA proceedings as developments or circumstances may warrant.

Contacts

tiffany.bourre@hbc.com
VP, Corporate Communications