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Hudson’s Bay Downsizing Downtown Flagship Stores in Canada [Analysis]

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Downtown Hudson’s Bay flagship stores in Canada are being downsized as parent Hudson’s Bay Company strategizes real estate assets with an eye for redevelopment. So far the downtown Montreal and Calgary Hudson’s Bay stores are confirmed to be downsizing and other flagships are expected to follow if things go as planned with HBC’s development arm Streetworks Development

The Montreal store, as discussed in April, will be downsized from more than 650,000 square feet to about 295,000 square feet of space over five floors while a 25-storey office tower is added at the back of the site. Last week we reported that in Calgary, the Bay flagship store would be downsized to three floors and we’ll discuss that more below. 

Several of Hudson’s Bay’s standalone flagship stores in Canadian cities were relocated after Eaton’s demise in 1999. In Victoria, Edmonton, Regina and Saskatoon, Hudson’s Bay exited larger flagship locations to relocate in former Eaton’s stores which were part of major downtown shopping centres. The downtown Edmonton Hudson’s Bay store shut forever last week in a former Eaton’s space at Edmonton City Centre. In downtown Victoria, Hudson’s Bay moved into the former Eaton Centre shopping complex which was renamed the Bay Centre while the former Bay flagship was converted to a mixed-use residential building. In Saskatoon, Hudson’s Bay moved into a former Eaton’s space at Midtown Plaza which resulted in the repurposing of the standalone Bay store a couple of blocks away into a residential building. In Regina, the former downtown Bay store was repurposed for offices, a bank and a broadcast station after the retailer moved into Eaton’s former space at the downtown Cornwall Centre shopping complex. 

La Baie d’Hudson (585 Sainte-Catherine St. W.) Photo: Maxime Frechette
Inside the Montreal flagship. Image via Julien Paquier-Galliard/Google Images

In October of 2020 the Hudson’s Bay Company announced a new division called HBC Properties and Investments with Streetworks Development reconceptualizing the downtown flagships as mixed-use buildings. The goal according to HBC is on creating multi-use spaces that feature a range of services and experiences across the workplace, retail, residential and entertainment categories.

The Hudson’s Bay Company owns several large flagship stores in Canada in a joint partnership with RioCan, and these stores could be redeveloped with downsized department store retail spaces. Here’s a breakdown of what might come. 

Historic photo of the Vancouver Bay flagship via hbcheritage.ca
Luxury department ‘The Room’ at Hudson’s Bay in Vancouver, featuring womenswear and menswear. Photo supplied by Hudson’s Bay

Vancouver: The 636,828 square foot Hudson’s Bay building at the northeast corner of Granville and Georgia Streets in Vancouver spans nine levels with six of those being large above-ground floor plates spanning more than 70,000 square feet each. As with the downtown Montreal flagship, the Vancouver store could be downsized to five levels including the basement putting the store at more than 300,000 square feet, and it’s unclear what will become of a basement level where Topshop/Topman will vacate in the fall. A redevelopment of the building could see the remainder of the historical portion of the building become office space and there’s the potential for one or two large towers to be built on the site, be it for office, residential or other uses. 

The Vancouver Hudson’s Bay flagship store opened in 1914 and additions brought it to its current size by 1949. If the store were to downsize, that would mean the end of its large sixth-floor menswear store which is the largest in the city. The downtown Vancouver Hudson’s Bay store attracts some affluent shoppers with its second-floor department The Room which last year also introduced menswear

Calgary flagship: Image: Hudson’s Bay
Men’s floor at the Calgary Bay flagship. Photo: Gireesh Annepu/Google Images

Calgary: Few details are known on what will happen to the upper levels of the flagship Calgary Bay store once it is downsized to three levels — the company says for now that they may be used for e-commerce fulfillment. Each of the floor plates in the 448,834 square foot downtown store span about 58,000 square feet which means the three level store would span about 175,000 square feet of retail space. As a comparison, the CF Chinook Centre Bay store spans about 206,500 square feet and the CF Market Mall Bay store is about 200,000 square feet according to landlord Cadillac Fairview. 

Several years ago the sixth floor of the downtown Calgary Bay store became an event space operated by Toronto-based Oliver & Bonacini, and part of the main floor of the store was segregated for a 5,000 square foot restaurant called The Guild. The downtown Calgary Bay store lacks the luxury brands found in the Vancouver and Toronto stores with the CF Chinook location having the most robust selection of higher-end brands of any Bay store in Calgary. 

Ottawa: The downtown Ottawa Hudson’s Bay flagship store spans about 335,000 square feet and occupies six levels. The former Freiman’s department store could be downsized for a mixed-use project including a site intensification. A Saks OFF 5TH store occupies 34,877 square feet in the basement. The Bay store is connected by a pedestrian overpass to the CF Rideau Centre shopping complex. 

Non-RioCan JV Partner Stores 

Toronto 44 Bloor Street East: The future of the 340,000 square foot Hudson’s Bay store at the corner of Yonge and Bloor Streets in downtown Toronto is uncertain amid whispers of a redevelopment of the site. An investment surpassing a billion dollars will see upgrades to the subway interchange at the intersection (and below the store) and rumours include a partial demolition of the block including an office tower that could be replaced with a much taller building. Few details are available publicly at this time for the redevelopment of Brookfield-owned Hudson’s Bay Centre. 

Hudson’s Bay on Queen Street in Toronto, formerly Simpsons – Photo by Dustin Fuhs
3rd floor women’s luxury brand apparel area at Saks Fifth Avenue, located within the Hudson’s Bay building in downtown Toronto. Image: Hudson’s Bay Company

Toronto Queen Street: The Hudson’s Bay Company sold the flagship Hudson’s Bay store at 176 Yonge Street to Cadillac Fairview in 2014 for $650 million and the massive department store complex became part of the CF Toronto Eaton Centre. Currently, the building houses a Hudson’s Bay department store spanning about 886,000 square feet with a 150,000 square foot Saks Fifth Avenue store-in-store on three floors and a 20,000 square foot Pusateri’s-operated food hall within the building on the PATH subway level. Each floor plate of the Queen Street Hudson’s Bay store, which was once occupied by iconic retailer Simpsons, exceeds 100,000 square feet. About 34,000 square feet of valuable main floor retail space could be added if Saks were to close.

There’s a possibility that Cadillac Fairview and Hudson’s Bay could partner to redevelop the Queen Street building by adding at least one tower to the site to unlock value through density. The Queen Street Bay store’s sales prior to the pandemic were said to be slightly higher than that of Simpsons which occupied the building in 1979 — and that’s not taking inflation into account. In today’s dollars, Simpsons would have sold nearly $700 million annually in that one store alone, and the Bay’s sales are said to be a fraction of that. 

Winnipeg Hudson’s Bay Company flagship store in 1939. Image: HBC Archives

Winnipeg: The 655,755 downtown Winnipeg Hudson’s Bay flagship store shut forever in November of 2020, and HBC wanted nothing to do with it after declaring that the building was a liability rather than an asset. RioCan has no ownership in the building and the building’s future is in discussion. For a time it served as HBC’s primary flagship location until a new flagship opened at 44 Bloor Street West in 1974. 

HBC ground leases – potential redevelopment with RioCan

The Hudson’s Bay Company also has ground leases with several of its suburban stores which means that redevelopment could be possible at some point. Suburban RioCan partner stores include Yorkdale in Toronto, Scarborough Town Centre in Toronto, Square One in Mississauga, CF Carrefour Laval near Montreal, CF Promenades St. Bruno near Montreal, and Devonshire Mall in Windsor. Two ground lease Bay locations not jointly held by RioCan include the Centre Laval Bay store near Montreal as well as the Centrepoint store in Toronto. 

A missed opportunity? 

The downsizings of Hudson’s Bay’s downtown stores come at a time when leading urban department stores in Europe and Asia have in some instances actually been expanding in size to offer attractions and food-and-beverage options to gain shoppers and keep them in-store. There are several examples of incredible department stores globally, some selling more than $1 billion annually in a single location. There are currently no department stores in North America with single locations selling that amount except for possibly Macy’s on Herald Square in Manhattan. 

In London, Selfridges occupies a 540,000 square foot store that expanded in 2012. The vibrant and popular store features 20 food and beverage options ranging from champaign bars to full-sized restaurants, and the store also includes such unique features as a movie theatre and skateboarding park. Iconic Harrod’s in London features an expansive food hall, numerous restaurants, and many global brand stores including many luxury brand concessions. Galeries Lafaytette and Printemps in Paris have both expanded over the years into multiple buildings to house a vast assortment of brands and services, and both are incredible stores in their brand offerings. Several years ago the Ka De We store in Berlin and de Bijenkorf in Amsterdam also saw expansions and renovations, as did the popular Castellana flagship branch of the El Cortes Ingles chain in Madrid.

In South Korea, several large department stores sell well in excess of a billion dollars annually under the Shinsegae and Lotte banners — these massive stores include ample food and beverage options as well as exciting interiors and brands. China and Japan are home to numerous large and impressive department stores that are very popular. Concessions and buzzy pop-ups are common among all of the international stores mentioned above.

7th floor women’s footwear hall at David Jones in Sydney. Photo: David Jones

The David Jones department store in downtown Sydney Australia unveiled an incredible women’s footwear hall in 2018 on its seventh floor housing a vast assortment of brands as well as concessions for many of the world’s top luxury brands. Last year a renovated main floor revealed boutiques for big brands including Louis Vuitton, Gucci, Dior and several others. The footwear hall is particularly notable given its size, spanning more than 40,000 square feet. Selfridges, Galeries Lafayette, Printemps and several other global department store flagships have also opened equally impressive shoe departments which have become attractions for locals and tourists. 

Hudson’s Bay has the opportunity to activate its flagship stores with unique offerings including food-and-beverage options and attractions such as massive footwear halls, however, the downsizing of the Canadian flagship stores will limit this potential. It remains to be seen what the renovated smaller downtown flagship Hudson’s Bay stores will look and function like, and from what we’ve heard so far these will be showrooms displaying product with a focus on digital purchases. Hudson’s Bay has said that its stores in the future will be ‘experiential’ with few details.

We will follow up on this article when we learn more about the future of Hudson’s Bay’s downtown flagship stores including what they might do to attract customers. One thing that is becoming apparent is none of these Bay stores in the future will be as large as the global flagship department stores overseas that have been draws for shoppers from around the world. Feel free to let us know your comments below.

Article Author

Craig Patterson
Located in Toronto, Craig is the Editor-in-Chief of Retail Insider and President/CEO of Retail Insider Media Ltd. He is also a retail analyst and consultant, Director of Applied Research at the University of Alberta School of Retailing in Edmonton, and consultant to the Retail Council of Canada. He has studied the Canadian retail landscape for over 25 years and he holds Bachelor of Commerce and Bachelor of Laws Degrees.

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6 COMMENTS

  1. It’s very sad that an iconic department store like this, formerly known as Hudson’s Bay, that has been so important to Canada’s history has had to downsize and struggle in this day and age.
    They need to seriously restructure, stop closing down stores and improve their “ONLINE SHOPPING EXPERIENCE” !!
    The Bay’s website has become nearly impossible to navigate. I predict that The Bay will lose more & more customers due to their outdated, ever-changing website that dedicated customers have had to use during “The Pandemic”.

    • Just sell all the real estate ALREADY!
      the Bay is an old stogey attempt at life support, they should write up a DO NOT RESCUSITATE CLAUSE in a world of innovative talent developing exciting consumer offerings without being shackled by Brick & Mortar valuations.
      Their retail dreams have turned into nightmares – half measures of downsizing is not a realistic option! Make the hard choices before even the real estate goes bankrupt.

  2. I would love to see The Bay with in an upscale, right now The Bay montreal downtown is becoming to look like a liquidations site. Sure their are some good deals but I would rather not see this mess. Customers want to feel in shopping mood but also to feel you are walking in The Bay department store and not a Walmart experience, no offence to Walmart.

    Offer a drink to customers as travelers are treated on all inclusive packages. Imagine like Sunwing Vacations you are treated with champagne free of charge. Little perks goes a long way. Give them an ambience and courteous. The way you serve a customer with politeness and respect. Greet them with a smile. The smile I notice is not all there. You might see it once in a while. Tell the customer thank you.

    Maybe add some screen view of a product. For example in foot wear be it sport, casual or elegant. TV view of a product. Add terraces with hotel like food not cafeteria style. Have different prices from not too expensive to expensive.

    • A perfect example of delaying the inevitable.
      The Bay does not have enough brainpower or funds to “stay alive” in any format! The ‘horse’ as well as the ‘cart’’ are both dead A LONG TIME AGO. As they say “it is all over but the shouting”. The OLD guard is not just myopic, unwilling to admit to its blindness – the world has passed it by.
      Look at today’s successes Shopify, Lightspeed, Stripe, helmed by dedicated, singular objectivized dreamers WHO KNOW WHAT PEOPLE NEED – not distracted by multiple directional nonsensical unrealistic cancerous thought processes. The Bay is NO MORE. Not even a pulse.

  3. As long as street retail mentality is mixed with real estate valuation these corporations will not perpetuate ‘a great place to attract innovative talent’ or ‘dedicated consumers’. They are doomed to lose foot traffic forever.
    Make up your minds, are you true “platforms’ to delight consumers B2C (brick & mortar + eCommerce) or hopeful offerings to their ultimate sale of hard assets? Are you Picasso’s generating compelling artwork or just planning to sell your studios? Stop fooling yourselves!

  4. I’ve had my own complaints but good heavens, Larry Diamond, are you on a one-man crusade to annihilate brick-and-mortar in general and HBC in particular? Don’t be so quick to announce the end of the “street retail” experience. It’s an intrinsic part of urban vitality and when done well, it adds greatly to the quality of life in a city. Granted, it has taken HBC an annoyingly long time to wake up to what they need to do, but such a task is probably like trying to turn around a massive ocean liner. At least the company recognizes the problem and they have made a start. Also, it makes no sense to denounce the connection of real estate concerns to retail, it’s foundational. These grand old buildings in city cores across Canada are a primary asset and HBC is wise to exploit them. The large, multi-format, multi-brand retailers that still attract the crowds downtown and generate the highest profit-per-square-foot are the companies that have leveraged their spaces to the point where they are not traditional, conventional stores. They have turned themselves into destinations and must-sees. I think shoppers have become bored with much of the store experience. As their time, money, and energy has dwindled and the world has changed, their priorities have shifted. So now, when so much can be done on line , it takes something better than average to get them to step out the door. Why make the effort to go downtown or a mall, only to walk into drab, tired showrooms stocked with generic indifferently displayed merchandise, unhelpful and unknowledgeable sales staff, and the same tinny sound system playing generic pop tunes you could hear anywhere when you can get the same stuff at home sitting in front of a screen and keyboard. Think of the stores that Craig Patterson mentions in his survey above of the situation facing The Bay: Selfridge’s and Harrod’s (I’d add Holt Renfrew equivalent Harvey Nichols and Liberty) in London, Galaries Lafayette and Printemps in Paris, Ka De We in Berlin, etc. Those are all dazzling temples of commerce, many rungs above the average anchor in standard issue districts and malls in Canada or the United States. Though the conventional wisdom is probably accurate that the traditional department store is doomed, there are places around the world where they are not just viable but thriving. Considering those locations, perhaps such retail can succeed only in specific, nodal markets that contain a critical mass of wealth and attract business and tourist traffic. There are fewer opportunities for this kind of upmarket retail in Canada, but at least in the major metros, there is enough potential to be worth the investment; at least HBC thinks so. I remember strolling through Macy’s on State street in the Loop in Chicago. The building alone is magnificent as it was the flagship and headquarters of Marshall Field and Company. With its high ceilings supported by fluted columns, chandeliers, and elegant fixtures, it was the inspiration for Selfridge’s Oxford street store in London. Yet in the midst of all this magnificence, it was difficult to find a salesperson, displays were sloppy and dusty, floor tiles were cracked and walls were stained, and all around, a general atmosphere of neglect. Unlike Macy’s, HBC needs to be a better steward of its own real estate. Down-sizing is sensible; people don’t shop the same way or spend as much time doing it as they used to. But down-sizing is not enough. Those central locations across Canada can all benefit from a refreshment in store design, service and offering. The Montreal building on Sainte-Catherine street, for example, represents an opportunity for the company to make good on that potential. A smaller store of 395,000 square feet on five levels is still big enough to be a better store if the attention devoted to the exterior of the building in the renovation renderings is extended to the interior of the store as well. With follow-up in merchandise, personnel and operations, the customer will return.

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