Hudson’s Bay seeks bankruptcy protection amid financial challenges

Hudson’s Bay, Canada’s oldest retailer, has filed for creditor protection as it moves to restructure its operations in response to mounting financial pressures. The department store chain, founded in 1670, cited economic headwinds, post-pandemic shifts in shopping patterns, and trade tensions with the U.S. as key factors behind its decision.

The company, which operates 80 Hudson’s Bay locations across Canada along with its e-commerce platform, thebay.com, announced the move on Friday evening, emphasising its commitment to remaining a viable player in the country’s retail sector despite broader industry challenges.

“Hudson’s Bay has been a vital retailer to Canadians for generations, and this decision was made with the best interests of our customers, associates, and partners in mind,” said Liz Rodbell, President and CEO of Hudson’s Bay. “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. Now more than ever, it is critical that Canadian businesses are protected and positioned to succeed.”

“Exploring strategic alternatives”

In a statement, the company said it is exploring strategic alternatives and engaging stakeholders to identify potential solutions to preserve and strengthen its business. While no assurances can be provided, Hudson’s Bay stressed its commitment to preserving jobs and maintaining community ties wherever possible.

The filing does not affect Saks Global, the U.S.-based parent company of Saks Fifth Avenue, Neiman Marcus, and Bergdorf Goodman, according to the Associated Press. However, Hudson’s Bay’s three Saks Fifth Avenue and 13 Saks Off 5th locations in Canada will continue operating under a licensing agreement.

To support its restructuring, Restore Capital, LLC, an affiliate of Hilco Global, alongside other lenders, has committed to providing interim debtor-in-possession financing. An initial **CAD 16 million advance was approved earlier today ahead of the “comeback motion” hearing. Hudson’s Bay is also seeking additional financing to sustain its operations during the Companies’ Creditors Arrangement Act (CCAA) proceedings.

The retailer has faced persistent financial strain in recent years, leading to store closures and workforce reductions. Efforts to secure fresh investment were further complicated by escalating trade tensions between Ottawa and Washington, with Rodbell noting that uncertainty over U.S. tariff threats deterred potential investors.

Hudson’s Bay now joins a growing list of legacy retailers grappling with a rapidly evolving industry, as shifting consumer habits and economic pressures continue to reshape the sector.