The collapse of Hudson’s Bay’s retail network is having ripple effects across Canada’s retail landscape, and among those impacted is Ottawa-based salon chain Hair Republic, which had partnered with Hudson’s Bay to expand its footprint in Toronto. In an interview, John Nguyen, CEO and Founder of Hair Republic Group, shared the extent of the fallout—and what’s next for the business.
“This is quite shocking,” said Nguyen. “We had been working with Hudson’s Bay for three and a half years, and we were looking to expand further. At one point, we even looked at Vancouver. That’s all on pause now.”
A Promising National Partnership with Hudson’s Bay
Hair Republic, which began in 2011 and opened a second Ottawa location in 2019, entered into an agreement with Hudson’s Bay in 2021, right in the midst of the pandemic. The goal was ambitious: open branded salons within department stores across the country.
“Hudson’s Bay approached us during the pandemic,” said Nguyen. “They pitched a business model where we’d operate salons within their stores. Their strategy was to create a new kind of shopping experience to draw younger, trend-conscious consumers.”
The first co-branded salon opened in Hudson’s Bay’s downtown Ottawa store. After a successful run, Nguyen says the retailer offered his team three top locations in Toronto, and Hair Republic chose CF Sherway Gardens.
“We launched at Sherway in fall 2023, had a grand opening, ran it for a full year—and now this happens,” he said. “It’s a bit of a shock.”
Inside the Licensee Model with Hudson’s Bay
Unlike traditional mall leases, Hair Republic operated under a licensee agreement with Hudson’s Bay, meaning they didn’t lease directly from landlords like RioCan or Cadillac Fairview. Instead, Hudson’s Bay acted as an intermediary, collecting customer payments and remitting them—after taking a cut.
“They took 15% of our top-line revenue, on a sliding scale,” explained Nguyen. “It allowed us to enter the Toronto market without the heavy overhead of a typical lease.”
The cost savings were significant, especially since Nguyen and his team invested heavily in store build-outs.
“We handled all the plumbing, infrastructure, everything,” he said. “Each location cost us between $250,000 to $300,000. But we saw the long-term benefits, especially with Hudson’s Bay offering national campaigns and marketing reach.”
Operational Red Flags Began to Appear
Despite the promising start, cracks in the partnership began to emerge in 2024. Nguyen noted HVAC failures, unreliable point-of-sale systems, and inconsistent store hours that limited his salon’s ability to serve clients.
“The biggest red flag was when we stopped getting paid on time,” he said. “Our cash flow was built around 45-day payment cycles. When those payments were two or even two-and-a-half months late, we had to start asking serious questions.”
Nguyen also noticed leadership changes within Hudson’s Bay that made ongoing operations increasingly unstable.
“There were three or four rounds of executive turnover,” he added. “People I used to deal with were suddenly gone. It was hard to maintain any consistency.”
Thousands in Sunken Costs at Risk
For now, Nguyen is focused on salvaging what he can.
“We’ll try to recover furniture and loose fixtures, but the plumbing, the rough-ins—all that is sunk cost,” he said. “That’s the heartbreaking part. We invested so much into these spaces.”
The Hair Republic team is staying optimistic, but the uncertainty is mounting.
“Hudson’s Bay may try to get us into one of their six remaining stores,” Nguyen said, referring to the locations exempt from liquidation, such as Yorkdale and downtown Montreal. “But I’d be cautious. I don’t want to end up in the same situation 12 or 24 months from now.”
Hudson’s Bay Liquidation Throws Expansion into Uncertainty
On March 7, 2025, Hudson’s Bay filed for creditor protection under the Companies’ Creditors Arrangement Act (CCAA). By March 21, the Ontario Superior Court approved the liquidation of 74 Hudson’s Bay stores, along with two Saks Fifth Avenue and 13 Saks Off 5th locations.
Hair Republic’s CF Sherway Gardens location is among those affected.
“We only have 10 to 12 weeks,” said Nguyen. “If I don’t find a solution by then, my team won’t have a place to work.”
Nguyen is currently in discussions with Cadillac Fairview, landlord of CF Sherway Gardens, to explore a direct leasing arrangement that would keep Hair Republic in the mall. He’s also considering acquiring another local salon or relocating within Etobicoke.
The Challenge of Scaling Amidst Uncertainty
Nguyen had bigger plans for 2025, including franchising Hair Republic. However, the Hudson’s Bay collapse is likely to delay that initiative by several months.
“We wanted to franchise this year,” he said. “But we realized franchising only works if franchisees can find talent—and right now, there’s a skilled labour shortage in our industry.”
To address this, Nguyen is now exploring conversion franchising—acquiring existing salons from owners looking to exit and converting them to Hair Republic franchises.
“It’s a win-win,” he explained. “We avoid build-out costs, franchisees get a profitable operation from day one, and we grow the brand.”
Other Licensees Also Feeling the Impact
Nguyen isn’t the only licensee affected by Hudson’s Bay’s restructuring. He has spoken with other in-store partners, many of whom are also scrambling for contingency plans.
“I can’t imagine what bigger licensees like MEC are thinking,” he said. “Everyone’s in limbo. And with liquidation sales starting this week, we don’t have much time.”
Nguyen hopes sharing his experience will help others in the retail industry understand the broader impact of Hudson’s Bay’s collapse on independent businesses.
“We had high ambitions,” he said. “And while this is a setback, we’re not stopping. We’re already moving on to Plan B.”
