Various Hudson’s Bay department stores in Canada are closed this week due to HVAC issues, coinciding with a heatwave that made temperatures in some stores unbearable. Hudson’s Bay has not been forthcoming on why stores have been closing temporarily over the past several months, following other issues in stores such as non-functioning escalators and a lack of centralized music.
For at least a couple of months, readers have been emailing Retail Insider about Hudson’s Bay stores being shut temporarily due to systems issues in stores, and a search on Reddit shows that the issue has persisted at least since May of this year. This week there have been various news reports about Bay stores being closed due to a lack of air conditioning.
Some readers have been so concerned as to ask if Hudson’s Bay will be going out of business as a result — the retailer has also had issues with its shipping and deliveries, including the fact that Hudson’s Bay currently does not deliver orders to the Northwest Territories, for example. Visitors to Hudson’s Bay stores that are actually open this week could find a lack of operational escalators, elevators and music depending on the location, and consumers are noticing.
Retail Insider reached out by phone to Hudson’s Bay to learn why these issues have persisted for months, and the retailer’s head of corporate communications, Tiffany Bourré, sent back a canned statement that was also sent to other news publications this week.
“The current heatwave has caused strain on HVAC systems in certain Hudson’s Bay locations. We are working to address as quickly as possible. The comfort and wellbeing of customers and associates remains our top priority.” – Tiffany Bourré
Various Hudson’s Bay stores have been closed in Canada this week, including stores in downtown Victoria, downtown Vancouver, Park Royal in West Vancouver, Coquitlam Centre, Abbotsford, Prince George, Red Deer, and Windsor Ontario. Over the past few weeks Bay stores at Square One in Mississauga have been closed due to HVAC issues, along with Woodbine Mall in Toronto and in Newmarket, Ontario, among others.
The closure of multiple Bay locations due to HVAC issues is a significant topic of discussion across Canada as a result, and it’s speculated that Hudson’s Bay may have not paid for maintenance of its cooling systems which are now failing. Various vendors owed money by Hudson’s Bay have reached out to Retail Insider with information for months as well, indicating a pattern of delinquent payments at a time when the Hudson’s Bay Company is announcing its acquisition of US-based luxury retailer Neiman Marcus.
As part of the Neiman Marcus acquisition, the Hudson’s Bay Company stated in a press release that the Canadian Hudson’s Bay department stores and Canadian business would become separate from Saks Global upon closing of the transaction. With that, there would be “significantly reduced leverage and enhanced liquidity” for Canada’s Hudson’s Bay. The release went on to say that the Canadian business “will be well positioned to support future growth,” without providing further details.
Sources have said that only about a quarter of Hudson’s Bay’s roughly 80 remaining Canadian stores are profitable, leading to a question about the future of some locations. The announced “new liquidity” means that Hudson’s Bay could have money to fix outdated technology, repair HVAC, escalators and other fixtures, and otherwise update stores — although one questions if there will be a return on such an investment, particularly as Canadians increasingly are turned off shopping at Hudson’s Bay locations which in many cases are in need of upgrading to create a positive customer experience.
Vendor relationships will also have to be fixed, following a pattern of late payments which will likely impact the retailer following any new cash injection from its parent company after the formation of Saks Global.
The future of Hudson’s Bay’s Canadian stores is uncertain and there’s a possibility that the chain could be sold post-Saks Global — various Bay stores have closed in recent years, including three downtown locations (Winnipeg, Edmonton, Toronto Bloor Street) along with other units in Montreal at Les Jardins Dorval, in Burnaby BC at the Lougheed Town Centre, and on Banff Avenue in downtown Banff, Alberta. We know that in 2025 Hudson’s Bay will close stores in Burlington Ontario and in downtown Regina, Saskatchewan. The cost to renovate the remaining Hudson’s Bay stores to an acceptable standard could be cost prohibitive.
Hudson’s Bay also began expanding its Zellers 2.0 concept stores within Hudson’s Bay last year, which insiders have said has generally been unsuccessful beyond some initial hype around the relaunch and some food trucks. One small bright spot is in downtown Vancouver, where the Zellers shop-in-store was recently expanded to 28,000 square feet making it the largest Zellers in existence by far — shoppers will be able to visit it again when the downtown Vancouver Hudson’s Bay flagship store reopens, whenever that will be.
Hudson’s Bay will ultimately have an uphill battle in the coming years to gain consumer traffic as Millennials and GenZ shift spending from department stores to speciality retailers including online — the overall relevance of Hudson’s Bay is less so with so many shopping options in Canada. Retail Insider will continue to report on Hudson’s Bay and what’s happening as the Saks Global partnership solidifies in the US.
