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.
I think Hudson’s Bay is phasing out its 2021 experiment to separate its online and in-person business. Its website is now calling itself “Hudson’s Bay” instead of “The Bay” although several spots on the website still say “The Bay” and I haven’t seen a Hudson’s Bay Trusted Brand Partners Network product in a long while.
Since Hudson’s Bay started using FedEx as their primary shipping partner, including from its stores, I haven’t been able to ship any order to my local Postal Outlet. If I lived in a higher density area my parcels would be more at risk from porch pirates.
You are correct — the separation of the physical and online retail came to an end in early 2023 prior to the Zellers launch, I believe. Oddly, the information wasn’t made public, and behind the scenes I’d heard words such as “disaster” used repeatedly to describe the situation.
I think the time has come to start thinking about potential suitors for Hudson’s Bay; with the current retail climate, I wouldn’t be surprised if they have to sell it off in pieces.
I’ll just say it is EXTREMELY frustrating that in a department store of their size, that the two common escalators haven’t being working at Southcentre, Chinook, Market Mall and Sunridge for almost a year. I went to the Chinook Centre location before Christmas last year and thought, oh, well they must be getting the escalators maintained for the Christmas rush. Nope. And they are all still affected. The Stephen Ave location is also just so sad to walk into, and they have not at all maintained any of the buildings deteriorating facade or ornate sidewalks.
The same at West Edmonton Mall and Southgate locations in Edmonton. Who knew escalator maintenance was so expensive that restricting access to a large piece of your sales area was worth the cost of escalator maintenance.
If only a quarter of the remaining Hudson’s Bay locations are profitable, you’re right to question how much difference would funds available from “new liquidity” make? Would it be easier to find buyers for the real estate instead of pursuing strategies such as extreme winnowing and flagship investment Holt Renfrew style? As a separate entity, albeit “wholly owned” how likely would HBC’s retail stores in Canada be to receive the benefit of a few crumbs from Saks Global’s seven billion dollar portfolio? HBC’s press release stated that they intend to make investments in the customer experience, but does that intention apply only to the Saks and Neiman’s network of stores or have I misunderstood? Because the situation in Canada as it stands is grim indeed.
So that is about 20 profitable Hudson’s Bay stores, 2 in each province if we look at it that way. So every major city in Canada could potentially have 1-2 Hudson’s Bay stores. Don’t see anything wrong with that, as long as that store isn’t falling apart and they reinvent what they want to sell. Hudson’s Bay currently is lost. Trying to be higher end but it just isn’t resonating with Canadians. Have a feeling they’ll pull the plug in Hudson’s Bay. Noticed the website is back to being called Hudson’s Bay with no 3rd party sellers and not much new stock. (The 3rd party marketplace was a total stupid move, took away from buying products The Bay was trying to sell).
The only store serving the entire West Island of Montreal (Fairview Pointe-Claire) is also closed due to system outages.
A mall that literally has traffic back up onto the Service Roads on weekends because it is so busy. While I have no idea what the sales are like that is a Bay that still has fantastic foot traffic (on all 3 floors) — and amazingly still-functioning (albeit Simpsons-vintage) escalators.
Fairview reopened today (16 JULY 2024).
I’m starting to wonder if Hudson’s Bay has a series of exclusivity agreements with its HVAC, Elevator and Escalator repair techs. Since Hudson’s Bay isn’t paying its accounts payable in a timely fashion these tech withdrew their services and no other techs can service the broken mechanical equipment until these contracts expire.
Frankly, I find it unacceptable how Baker and his gang have let the Hudson Bay banner, a part of Canadian heritage, go downhill while they focus, as a lot of retailers are doing, on luxury retail. They could have closed poor performing doors and invested in the remaining doors, enhancing the physical spaces and working with retail consultants to develop a customer experience plan. Explain to me how Simons has managed to survive and thrive in the new retail environment and Hudson Bay can’t? Simons invests in their physical stores and staff to create a fantastic store experience. They have managed to find the perfect product mix between affordable private label collections and high-end designer brands. Baker should look to Simons as an example of what to do for the remaining Hudson Bay stores.
Baker doesn’t care. This is the private equity playbook of profit for shareholders. Customers don’t matter. The expansion of the luxury is about insane profit as well.
It’s also possible that the luxury market is just a passing trend and that people will wake up and realise that the quality of many so-called luxury brands is mid-market with a higher price tag while lower priced goods are mostly junk.
Wander through a bunch of stores on a single day, from Holt Renfrew to Old Navy to Uniqlo, and you might come to a similar conclusion. Stopping at the Bay will make you sad. It’s as if you’ve been transported back a few decades except that the stores are so empty you’re likely to find a staff member because you’re the only customer on that floor.
biggest problem in redevelopment will heritage buildings, will anyone let them redevelop as condos or will it be too expensive, and they will just be empty buildings?
If the Hudson Bay were to continue as department store, I wonder if a solution might be to lease out more of its departments to various independent retailers as they do in the cosmetics department. E.g. large home appliances = Home Depot; jewelry = Maison Birks; furniture & homewares = Crate & Barrel, CB2, EQ3; Electronics = Best Buy, etc. Just pulling names out of a hat and the right complement of retailers would need to be created, but independently, I would imagine that each would have better control and management of each department.
Just to let you know that Hudson’s Bay doesn’t sell Major Appliances or Electronics anymore at non-Flagship stores. I do think Fine Jewellery and Fine Watches would be a great example of a whole department becoming a concession with a separate POS system than the rest of the store.
I’ve been wondering the last 8 months if Hudson’s Bay is going under. They don’t restock much and no new Zellers merchandise. Social media is no more. Website is back to being Hudson’s bay…. Why they speared that in the first place? No idea. Will be a sad day to see them close. It’s party of what made Canada, Canada.
I live near Eglinton Square in Scarborough, ON. Last year Hudson’s Bay there was rebranded as a “outlet” and of course nothing has been renovated in years. I dropped in last week to get some new sheets but the whole second floor was blocked off at the escalator entrance. Stacks of bargain clothes now fill the aisles of the ground floor. I asked a clerk if they now only offered clothing at this location and she said the second floor still had all the kitchen, home, furniture etc., but it was closed because the escalators weren’t working. Like customers can’t walk up broken escalators? She said they should be repaired in a couple of weeks (!), but it still made no sense not to keep the second floor open. At least the AC was good and strong on that hot day, but I left thinking this is the end of the Bay. I see that this type of thing is happening at Bay stores all over the country – any retail insider have a theory on why Baker wouldn’t just shut everything down rather than run it into the ground like this? I imagine it’s been shopped around to potential buyers but none were found, and now it’s been separated from the US division. Could it be that shutting down would cost more due to leases or other contracts? It’s all very curious to me.
I recently went to their Market Mall location in Calgary, AB, which used to boast the best cosmetics department of all Bay stores in Calgary. I was shocked to see how run down it had become. The Estee Lauder counter had virtually empty showcases and the lights were off, like they were closed. I looked around the department and most counters didn’t even have associates looking after them! It was so sad to see what used to be a lively and energetic cosmetics department look so run down and empty. It’s like they’ve given up!
I ordered a couch from the Bay in January and it still has not arrived (it’s July). Delivery has been rescheduled three times, and the third time they said the couch was in Vancouver (I’m in Calgary) but they couldn’t get it delivered as they are having trouble finding a company that can deliver it. What?! Maybe they haven’t been paying their bills, therefore none of the shipping companies want to work with them?? After not hearing anything for a while, we called to follow up and left a voicemail. When no one called us back, we went to the store today (SouthCentre Mall), and there was a sign on the door saying the location was closed due to HVAC Maintenance. 20 stores all with the same HVAC issue?? Seems a little fishy. We have decided to find an open location and request a full refund… I have lost trust that this couch will ever show up, and if they go bankrupt, then my money is gone for sure.
Sellers in the cosmetic department store a store in Pointe-Claire and Laval told me that The Bay doesn’t order some products anymore. I’m not sure if it’s a coincidence, but the products I was looking for are usually under 25.$…. However, I saw yesterday in the Laval location that they re-stocked perfume. Anyways, it used to be my favorite store for years but now I prefer going at Simons.
A wild guess : could it be that the Bay management used the Canadian company to finance acquisitions in the US, and they don’t need the Canadian company anymore?
I was a supplier to Hudson’s Bay and would ship orders regularly and was paid on time. I knew of other vendors who were experiencing late payments but I think I was considered an important vendor and was even getting payments couriered to me. I started to have payment issues with them the second half of 2023. The last order I shipped was in August 2023 and have not yet been paid. Thankfully it is not a lot of money when compared to what they have owed in the past. They keep saying it will be paid soon.