Canada's Oldest Company Files for Creditor Protection

The Bay in downtown Vancouver has been neglected for years

I guess it was going to happen eventually, but today Hudson's Bay Company, a department store that has a history dating back to 1670 has filed for creditor protection with the intention to restructure the business.

Last week I went to the Bay in downtown Vancouver to buy something and there were more staff than customers. In the summer I visited the department store's upper floors and it was even more dire. The year before that the elevators weren't working and I had to climb the stairs to get up and down. People with baby strollers and elderly people waited for the lift that never came.

Elevators were out of order, same with air con

Then the Vancouver Sun began writing about the above observations, but no one was around the address the issues, including the air conditioning not working.

These were all red flags that the company did not have enough cash flow to keep the stores operating.

So it wasn't too surprising to hear today's news, but also sad because it is the country's oldest goods purveyor and one would hope the owner, Hudson's Bay Co would not drive the Bay to the ground, though at the same time it needs to revamp its business; department stores are going the way of the dinosaur.

The company's president and CEO Liz Rodbell claimed US tariffs were to blame, but the deterioration of the Bay had been going on for years. Blaming the Trump administration seems a bit much. How about the Covid-19 pandemic changing the way people shop, and the items on the racks and shelves are not what customers want to buy.

The company plans to restructure

Nevertheless she is hoping for an injection of C$16 million could help the company, which has 80 stores across Canada to help the Bay weather the storm.

Chief financial officer for the Bay's parent company Jennifer Bewley, said in an affidavit filed in court that the business is having trouble making payments to landlords, service providers and has had to defer certain payments for many months.

She added the company is days away from failing to meet its payroll obligations if it doesn't receive more funding. It currently has 9,364 employees.

"Without the benefit of court protection, failure by Hudson's Bay to pay rent at its stores will result in a rapidly escalating chain of events, leading to lease defaults," she said.

So it's just as well the Bay will not be a part of Oakridge Park in Vancouver when it is finally built out, but the shopping complex has now lost a major anchor tenant...