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In a news release issued Friday night, the company announced it has begun proceedings under the Companies’ Creditors Arrangement Act (CCAA).

“While very difficult, this is a necessary step to strengthen our foundation and ensure that we remain a significant part of Canada’s retail landscape, despite the sector-wide challenges that have forced other retailers to exit the market,” Liz Rodbell, president and CEO of Hudson’s Bay, said in the news release. 

“Now more than ever, it is critical that Canadian businesses are protected and positioned to succeed.”

Hudson’s Bay said going into creditor protection will allow it to “streamline costs and refocus on its core strengths.” Its lenders have agreed to advance $16 million in financing to fund its operations during the proceedings, which will be overseen by court-appointed monitor Alvarez & Marsal Canada.

“The demise of an iconic brand is sad,” said Fred Waks, president of real estate developer Trinity Group and former chief operating officer at RioCan. 

“There’s great history there, but the world evolves and moves forward. And unfortunately, you know, Hudson’s Bay aren’t as important as they used to be.” 

Industry insiders have been expecting the chain to go bankrupt for some time, but rumours intensified after Hudson’s Bay split with its Saks Fifth Avenue subsidiary last December. 

Saks bought American retailer Neiman Marcus for $2.65 billion (U.S.), and created a new entity called Saks Global, which is not part of the CCAA proceedings. 

The acquisition was spearheaded by American retail and real estate magnate Richard Baker, CEO of Saks’ parent Hudson’s Bay Company (HBC). 

“A lot of people in the industry were anticipating something was going to happen in the first quarter after Richard Baker ring-fenced the American assets and separated the Canadian entity into a stand-alone,” said Waks. 

He says much of Hudson’s Bay’s value was based on the redevelopment rights it had on its stores, but that has been tarnished by challenges in the office and residential real estate markets since the pandemic. 

“The real estate isn’t as valuable as it was five years ago,” he said. “There’s no redevelopment happening.” 

There have been other signs of trouble at Hudson’s Bay. In January, the chain announced it had laid off 41 employees due to “challenging headwinds” affecting the retail industry. That came after multiple rounds of job cuts in 2024 and 2023. 

The company also received two court orders to pay its landlords millions in unpaid rent during the pandemic and was forced to close its downtown Winnipeg store for good in 2020 and its iconic location at Bloor and Yonge Street in pc28����at the end of May 2022. Last November, it pulled out of its plan to open a store at the redeveloped Oakridge Park in Vancouver. 

The once mighty retail giant has made confusing strategic moves and seen its sales drop at a rapid pace due to the decline of the department store sector and a lack of investment in its online infrastructure. It exited its European foray in 2019, sold the operations of its American department store chain, Lord & Taylor, and went private in early 2020 as its stock price plummeted.

“Hudson’s Bay remains deeply connected to Canada and is focused on the future,” Rodbell said in Friday’s press release. “Our goal is to re-establish our foothold and ensure the company’s long-term place in the evolving Canadian retail market. As we go through this process, we will continue to show up for our customers and communities, as we always have.”