Hudson’s Bay Company requested the protection of creditors last week, saying that he is struggling to pay the owners, vendors and employees, and is a process that could lead to the sale or closure of the oldest company in Canada.
Retail experts say that writing has been on the wall for several years, with some stores in disorder, the shopping experience, several closed places and many workers dismissed.
“The brand is not in good condition and the reasons for that date back to decades. This is not something that has happened in recent years,” said Doug Stephens, CEO and founder of Retail Propfe.
The company’s restructuring plan includes closing some stores and reducing its operations. So where does that leave customers with outstanding gift cards or reward points?
For now, you can still buy at Hudson’s Bay, both in stores and online. But some things have changed, and the future of the company is still in the air. This is what you need to know.
The stores still open, but the closures could come
Some physical locations, if not all, could eventually close. If it appears in the retailer, you will notice sales and significant authorization downloads as the company tries to eliminate the inventory.
Decisions have not been completed regarding store closures, said a company spokesman for CBC News. According to reports, the bay is considering closing 40 of its 80 stores, according to the Canadian press.
Meanwhile, some interested parties are already taking measures against bay for lost payments.
An owner of the Shopping Center in Sydney, NS, tried to block the entrance to an Hudson’s Bay store last week because the company was late in its rental payments, and a sheriff team in Sherway Gardens Mall in Etobicoke, Ontario, tried to take advantage of the merchandise of another bay store, according to the presentation of the court of the company.
Gift cards, yes; Rewards program, no
Customers cannot exchange or win points at this time, because the company’s rewards program is in pause, a Hudson’s Bay spokesman told CBC News.
So, if you have an exceptional amount of points on your rewards card, you will only have to hold on to it for now. And if your account has not seen any activity for 24 months, the points could have expired, says the presentation of the court.
As of February 1, more than eight million customers from Canada had outstanding points for a total of $ 58.5 million.
After centuries in business, the oldest retailer in Canada, Hudson’s Bay, requested the protection of creditors in an attempt to remain financially afloat after years of sales in decline, fierce competition of online retailers and the growth of the commercial tensions of Canada-United States.
A note on the company’s website also adds that it cannot track or accumulate points in the purchases made during the “and apply them retroactively” program.
Buyers can still use existing gift cards, which can be “redeem until the company goes bankrupt,” Boutet said. But they can’t buy new ones because the company is not currently selling them.
What happens later?
The Bay requested the protection of creditors through the Higher Court of Justice of Ontario, which will decide on Monday if the company can ensure the financing it needs or if it will have to close and liquidate its assets to pay for the money it owes.
“The first steps for them will be to clean the balance sheet. They will try to download strange debt,” Stephens said.
If the stores close, a part of the more than 9,000 employees of the company will be fired. You will have less leases to pay and probably will renegotiate the existing ones, he added.
The oldest retailer in Canada, who operates the department stores of Hudson’s Bay, announced that he seeks the protection of creditors on Friday, but intends to hold on to many of his prominent locations. David Ian Gray’s retail strategist said to climb and explore its own product lines could be options for the sick department store.
But relieving debt alone will not be enough to solve the bay problems, Stephens said. “If they are going to resurrect the bay to be the old bay, that will not bring young consumers to their door.”
“They really have to rethink all the experience from scratch,” he said. “What could put in those stores on the path of food, entertainment, social commitment, things that attract people to their stores and give new life to that brand? That is what they need to do.”
“Buy Canadian” brand change
Although he has a historical Canadian history, Hudson’s Bay was bought by an American private investment firm, NRDC Equity Parners, in 2008.
Boutet said that Hudson’s Bay is not sustainable in its current format. The best of cases is that “someone acquires the brand and brings it back from a much more focused Canadian angle.
Several main department stores (or their Canadian footprints) have found significant or closed challenges in recent years, including Sears, Nordstrom, Target and Jcpenney. An atypical is Montreal’s Simons, which has expanded from the pandemic.
“The department stores in general: there are some pockets in Europe and Asia where they still work, but it is only that the format no longer works,” said Boutet.
