After spending a week looking for a lifeguard, an Ontario court has given permission to the oldest company in Canada to start liquidating all but six of its stores on Monday.
The Friday’s approval of the Superior Court of Ontario, Peter Osborne, allows the retailer to start selling the inventory in most of its 80 Hudson’s Bay stores, three Saks Fifth Avenue and 13 Saks located and 13 Saks outside the fifth store in Canada.
“This is the art of the possible, and we are where we are today. In my opinion, there is no other alternative,” Osborne said on Friday.
The six stores that are being saved from the sale of liquidation include a flagship location on Yonge Street in Toronto, as well as a store in the city yorkdale shopping center and another north in Hillcrest Mall in Richmond Hill, Ontario. The remaining three are in Montreal, the Carrefour Laval Mall and Pointe-Claire, which.
The company did not say how deep the discounts will be during liquidation, until June 15. It will vacate all liquidation stores before June 30.
But the movement to save six locations could save some of the 9,364 works that would have been lost if the company needed to liquidate all its stores, which was the plan until recent sales exceeded expectations.
“If you can find a solution, there is the opportunity to get additional liquidation stores. But a restructuring solution is not very quickly, [the six] It will be added to the sale of liquidation, “Hudson’s Bay Ashley Taylor’s lawyer in court said Friday.
The ruling marks a ray of hope for the company, which requested the protection of the creditors on March 7. The application showed that the company faced significant financial challenges and desperately needed to continue making basic payments that support the business.
While the retailer suffered a reduced expense in the consumer, commercial tensions between the United States and Canada and a fall after the pandemic in the center’s store traffic, Hudson’s Bay differ from the owners and suppliers and finally had to resort to the search for financing, which pushed towards the liquidation.
The possibility that the disappearance of the 355 -year -old company triggered a burst of sales in recent days, from customers looking to take clothes, household items and the famous Hudson’s Bay blankets dating from 1779, when skins trade was in full swing.
Earlier this week, its flaunting flagship location in Queen Street West was close to selling items with green, red, yellow and indigo iconic stripes. Sales were so strong between March 8 and 14 that the company won $ 21 million, exceeding its own estimates at approximately $ 7.4 million, as shown in the judicial documents.
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Sales cash will allow the company to pay a company joint with Riocan Real Estate Investment Trust, through which it has some real estate, up to $ 7 million per month for rent. Now you can also pay $ 16 million in financing you received from Restore Capital at the beginning of the month to keep it afloat.
Taylor said Friday that the company will continue “working hard” to find a “more long -term solution” for its financial problems, but warned the window that achieves this “is still very short.”
Olivia Glaubzon, owner of the After9 maternity clothing brand, says that the situation is “unfortunate”, but has chosen to extract its inventory from Hudson’s Bay locations in Toronto, and added that retail trade is a “people’s business” and that was not prioritized in stores. Hudson’s bay is liquidating all but six of its stores; Its flagship location in Yonge Street in Toronto is one of the stores that will be saved.
Although the company carries out the work, a sales process will begin for assets such as its leases and Canadians will see agreements in the stores that are destroyed.
Whether they buy in person or online, you will find that Hudson’s Bay has stopped their loyalty program, which has 8.2 million Canadian members with approximately $ 58.5 million in unused points. It will stop accepting the earrings of $ 24.2 million that consumers have after April 6.
All sales will be definitive in liquidation stores, says Hudson’s Bay.
Trial Road
To get to a sentence, Osborne had to reconcile how the company could settle its inventory, seek more financing and also look for a buyer for valuable assets, such as its leases or even intellectual property associated with its name or striped products.
“I want to make sure we have not sold the jewels in the crown … So to make a better impossible result,” he said in court earlier this week, hours before reserving his trial for the day and urged the lawyers of those who had heard to “reduce the temperature.”
The dozens of lawyers in the procedures during the week represented everyone, from unpaid elevator companies to owners.
The owners were concerned that a liquidation did not simply leave their shopping centers and properties with huge spaces to fill, but also hinder pedestrian traffic to other tenants whose goods would become less attractive compared to reduced prices in the bay.
The lawyer Taylor used his appearances to promise that Hudson’s Bay “would launch the network as wide as possible” to find sponsors that could save or rebuild the business.
He said earlier this week that he had approached 19 lenders, but so far, “the company’s efforts have failed,” which requires liquidation.
The staff looks possible losses of employment
Although six liquidation sale stores are saved, for more than 9,000 employees on the company’s payroll, the closure of the stores will have deep consequences.
“I will be 62 years in May and my plan was to work until 65 and retire, but it seems that this will not happen,” said Kevin Grell, who works as an electronic commerce processor on the Scarborough online distribution site.
“It’s sad. Especially at my age, it’s hard to get a job,” he said. “Everyone is worried, everyone is sad, some of them are angry, which is understandable. They just can’t believe it happened.”
The oldest retailer in Canada, Hudson’s Bay, is in court this week looking at the perspective of liquidating his business that has historical roots that date from 1670. Tony Letvinchuk, Managing Director of Commercial Real Estate of Macdonald, says that it is likely that retail buildings of multiple floors or even mixed buildings take the place of the large buildings of the large buildings.
As the situation is currently, the staff could see that their work disappears in a matter of days or weeks, depending on how fast the company moves. Many have no idea if they will cling to their pensions and benefits, or even receive compensation.
Grell, who is a union administrator, said they had a meeting with the union last week and asked about compensation.
“They came out and honestly told us that in situations like this, do not wait for compensation, because it is at the bottom of the barrel … so it is very unlikely that we get something.”
Andrew Hatnay, a lawyer who represents employees, repeatedly told the court who felt that the whole process moved too fast because the company went from the protection of creditors to a total sale in approximately one week.
He said he did not see the savings of the six stores as a reason for the celebration.
“We’ll see how this works, but even … if they get something out of their hat, the stores are still going down,” he told court. “That is not good news.”
At stake, he said, they were not only thousands of jobs, but benefits, pensions and compensation. There are 21,000 past and current employees covering Hudson’s Bay, Saks Fifth Avenue and previous Simpsons, Kmart Canada and Zellers in the Pension Plan, which according to judicial documents is currently fully financed.
Employees say they do not expect compensation, what Hatnay estimates that he could have promoted to a $ 100 million group.
“This is melancholy,” he told the judge. “This is the disappearance of HBC, slow but safe.”
