Hudson’s Bay: How North America’s Oldest Company Collapsed in 2025

Hudson’s Bay did not die of old age; it was hollowed out by a financial strategy that treated a department store chain as a real-estate portfolio with a retail problem attached. For 355 years the company survived the fur trade’s decline, two world wars, the arrival of Eaton’s and its disappearance, Walmart and Amazon. What it could not survive was two decades in which its most valuable buildings were sold or mortgaged, its best assets were spun into other entities and its stores were starved of investment while e-commerce and downtown foot traffic moved against it. This article reconstructs the timeline, explains Richard Baker’s playbook, follows the liquidation and the contests over leases, brands and the charter, and draws out what the collapse means for Canadian retail. It is part of the Canada Company Stories hub.

How did a 355-year-old fur trader become a department store chain?

Hudson’s Bay Company was founded on 2 May 1670 when Charles II granted a royal charter to a group of investors led by Prince Rupert, giving them a trading monopoly over the entire drainage basin of Hudson Bay, a territory covering about a third of modern Canada. For two centuries it was a fur-trading and territorial enterprise, effectively the government of Rupert’s Land until it sold the territory to the new Dominion of Canada in 1870 for £300,000 and retained large land grants that it sold off over the following decades.

Retail came later. The company opened its first department store in Calgary in 1913 and built flagships in Vancouver, Winnipeg, Edmonton, Toronto and Montreal in the 1910s and 1920s. The point-blanket stripes, green, red, yellow and indigo on cream, which had been a trade good since the 1780s, became the company’s visual identity. Through the twentieth century HBC acquired Zellers (1978), Simpsons (1978) and, in 1999, the Kmart Canada stores, and it was briefly Canada’s largest retailer. Control passed from British shareholders, who had run the company from London until 1970, to Canadian investors including Ken Thomson, whose family bought a large stake in 1979 and held it into the late 1990s.

By 2006 the company was an underperforming conglomerate of The Bay, Zellers, Home Outfitters and Fields, and it was bought by American investor Jerry Zucker for about $1.1 billion. When Zucker died in 2008, his widow sold HBC to NRDC Equity Partners, the real-estate-focused private-equity firm of Richard Baker, which already owned Lord & Taylor.

What was Richard Baker’s real-estate playbook?

Baker’s thesis, stated openly from 2008, was that Hudson’s Bay’s buildings and leases were worth more than its retail operations, and his seventeen years in control were a sequence of transactions that converted those property assets into cash while the stores carried on. The first and most lucrative was the 2011 sale of up to 220 Zellers leases to Target for US$1.8 billion, more than NRDC had paid for the entire company. Target’s Canadian venture failed within two years, but HBC kept the money.

HBC listed on the Toronto Stock Exchange in November 2012 and used its public currency to buy Saks Incorporated in 2013 for US$2.9 billion, including Saks Fifth Avenue and Saks Off 5th, followed in 2015 by Galeria Kaufhof in Germany. The Saks Fifth Avenue flagship on Manhattan’s Fifth Avenue was appraised at US$3.7 billion and mortgaged for US$1.25 billion. Joint ventures with RioCan in Canada and Simon Property Group in the United States moved store properties into separate vehicles in exchange for cash and equity. The Lord & Taylor building on Fifth Avenue was sold to WeWork for US$850 million in 2017; the Lord & Taylor chain itself was sold to Le Tote for US$100 million in 2019 and liquidated during the pandemic. Kaufhof was sold to Signa in 2019.

In March 2020, as the pandemic began, Baker led a shareholder group that took HBC private at $11 a share after a contested process in which minority shareholders, led by Catalyst Capital, argued the real estate alone justified a higher price. From that point HBC’s finances were no longer public. What is known is that by 2024 the group had created Saks Global by combining Saks, Neiman Marcus (bought for about US$2.65 billion in late 2024) and Bergdorf Goodman, with Amazon and Salesforce as investors, and that Hudson’s Bay in Canada was separated from that structure. The Canadian retailer, with its ageing stores and remaining leases, was what was left.

Why did the company run out of money in early 2025?

By the time it filed, Hudson’s Bay had about $3 million of cash against more than $1.1 billion of secured debt, hundreds of millions of unsecured obligations to suppliers and landlords, and no realistic prospect of refinancing. The court filings and subsequent reporting listed the causes: foot traffic in downtown cores never recovered its pre-pandemic level, which hurt flagship stores in Toronto, Vancouver and Montreal disproportionately; occupancy costs on those flagships, some of them now owned by former joint-venture partners, kept rising; the e-commerce platform was outdated; and years of deferred capital spending had left many stores shabby by comparison with Simons, Nordstrom (which itself exited Canada in 2023) and the luxury brands’ own boutiques.

Two external shocks finished the job. The separation from Saks Global, completed in the second half of 2024, removed the shared buying, technology and logistics backbone on which the Canadian stores had relied; retail analyst Carl Boutet argued that the company’s trajectory was set at that moment. And the threat of US tariffs in January and February 2025, together with a weakening Canadian dollar, made suppliers nervous about extending credit and lenders unwilling to provide the interim financing a reorganisation would need. HBC said in its filing that trade tensions had contributed to the collapse of a planned financing.

The Companies’ Creditors Arrangement Act filing on 7 March 2025 came with a $16 million debtor-in-possession facility, enough to run a liquidation but not a restructuring. Within a week the company told the court it would liquidate its entire business unless new financing materialised. Liquidation sales began in late March across all but six stores; those six, including the Toronto Queen Street and Yorkdale flagships, were added in April when no financing appeared.

What did the liquidation look like, and who lost most?

The liquidation sold hundreds of millions of dollars of merchandise between mid-March and the end of May 2025, and on the afternoon of Sunday 1 June 2025 all 80 Hudson’s Bay stores, three Saks Fifth Avenue locations and 13 Saks Off 5th outlets in Canada closed for good. Court filings show that about 8,347 employees were terminated, out of more than 9,000 at filing, with a further roughly 900 distribution-centre staff laid off as the warehouses shut by mid-June.

Employees were the clearest losers. Severance claims rank as unsecured in a CCAA process, behind secured lenders such as Restore Capital and Pathlight, and the company sought and obtained court approval for a hardship fund that was small relative to the claims. Unions and employee groups raised concerns about pensions and benefits; the defined-benefit plan was reported to be in surplus, which protected retirees, but severance and continuation of benefits were not. Suppliers, including many Canadian apparel brands for which the Bay was the largest wholesale account, faced significant shortfalls, as did landlords holding leases with years to run.

Why did the Ruby Liu lease deal fail?

The lease deal failed because landlords persuaded the Ontario Commercial Court that they, not an insolvent tenant, should decide who occupies their anchor space. Weihong “Ruby” Liu, a British Columbia mall owner who controls Tsawwassen Mills, Mayfair Shopping Centre and Woodgrove Centre, agreed in May 2025 to acquire up to 28 former Hudson’s Bay leases and paid deposits of more than $15 million, with a plan to launch a new department store chain under her own name offering retail, dining and entertainment.

Three of the leases were in her own malls and transferred without controversy. The other 25 required assignment to a new tenant under the CCAA, which landlords including Cadillac Fairview, Oxford, Ivanhoé Cambridge and Primaris opposed, arguing that Liu had no retail operating experience, no credible business plan or financing for the long-term obligations, and that the court should not force a decades-long relationship on them. After a contested hearing in the autumn of 2025 the court agreed with the landlords and refused the assignments. By early 2026 sources told Retail Insider that no Liu-branded concept would open even in the three retained locations.

The outcome matters for Canadian commercial real estate. It reaffirmed that the CCAA’s power to assign leases over a landlord’s objection is not automatic and depends on the proposed assignee being a credible tenant. Landlords now control roughly six million square feet of former Bay space across the country, much of it in downtown cores and enclosed malls, and are converting it to mixed-use, residential, medical, entertainment and smaller-format retail. The implications for mall owners such as Cadillac Fairview and Oxford are discussed in the commercial property story.

What did Canadian Tire get for $30 million?

Canadian Tire Corporation acquired the Hudson’s Bay name, the coat of arms, the multi-stripe design, the HBC Stripes trademarks and a group of private-label brands for about $30 million in a sale approved by the court on 3 June 2025; the Zellers name was excluded and remained with the estate. For a company whose True North strategy centres on owned brands and loyalty, it was the cheapest acquisition of a nationally recognised trademark in recent Canadian history. Canadian Tire disclosed the $30 million as a capital expenditure line in its 2025 results.

Execution has been fast. A limited-edition holiday capsule of Stripes products went on sale in Canadian Tire stores on 5 December 2025, six months after the stores closed; a first full 32-piece Summer 2026 collection arrived on 1 May 2026, and the company has said the Stripes will appear across its banners, including SportChek, Mark’s and Party City. Canadian Tire treats Hudson’s Bay as an owned brand alongside Mastercraft, NOMA and Canvas rather than as a separate retail format, which avoids the fixed costs that sank the original.

What Canadian Tire did not buy was any store, lease or employee, and it has shown no interest in department-store retailing. That is itself a verdict: the most valuable thing left of a 355-year-old retailer was a pattern of four stripes. The buyer’s wider strategy is examined in the Canadian Tire and Dollarama story.

What happened to the royal charter and the art collection?

The 1670 royal charter, the document that created the company, was sold at a court-supervised auction on 3 December 2025 to holding companies of the Thomson and Weston families for $18 million, with a further $5 million pledged for conservation and public access. The process was contentious. In July 2025 Wittington Investments, the Weston family holding company, offered $12.5 million to buy the charter outright and donate it to the Canadian Museum of History in Gatineau, plus $1 million for conservation, and HBC prepared to sell on that basis. In August David Thomson’s DKRT Family Corp. entered with a $15 million opening bid, pushing the estate back to an auction that Justice Peter Osborne approved on 21 November with the condition that any buyer donate the charter to a public Canadian institution.

The two families then combined their bids. Their joint $18 million offer was uncontested on the day, and the charter will be donated to the Archives of Manitoba, the Manitoba Museum, the Canadian Museum of History and the Royal Ontario Museum, with Manitoba as its home and the site of its first public exhibition. The Desmarais family through Power Corporation and the Hennick Family Foundation pledged further support. Reflect Advisors ran the auction for the estate.

The charter was only part of the heritage question. HBC’s art and artifact collection, thousands of items including paintings, point blankets, trade goods and Indigenous objects, raised concerns from First Nations, museums and the Manitoba government about dispersal through a commercial sale. The estate negotiated with institutions and governments over much of 2025, and the monitor was still administering claims and winding down the estate in early 2026. For a country that had already lost Eaton’s and Sears Canada, the fate of the Bay’s collection became a proxy for the loss of a piece of national identity.

Did Saks Global and Richard Baker escape the fallout?

No. Saks Global, the US luxury group that Baker built from Saks Fifth Avenue, Neiman Marcus and Bergdorf Goodman, filed for Chapter 11 bankruptcy protection in the Southern District of Texas on 14 January 2026, ten months after Hudson’s Bay’s filing. The company had taken on more than US$2 billion of new debt to buy Neiman Marcus in late 2024 for about US$2.65 billion, and the combination never generated the cash to service it; vendors complained throughout 2025 of late payments. The filing came with about US$1.75 billion of financing commitments from creditors and lenders, and management said stores would keep trading while an operational review proceeded.

Baker stepped down as executive chairman and chief executive in the days before the filing, replaced by Geoffroy van Raemdonck, the former Neiman Marcus chief executive. In interviews he has argued that his strategy saved luxury department stores that would otherwise have failed earlier, and that the Canadian business was overwhelmed by circumstances beyond its control. Critics, including former employees, Canadian suppliers and the Catalyst minority investors from 2020, draw a straighter line from the real-estate extraction to the final outcome.

Both filings together close a chapter in North American department-store history. The playbook that worked when Zellers leases could be sold to Target for US$1.8 billion did not work when the leases had no buyers and the stores had no customers. The lesson is not that real estate is worthless to a retailer, but that it can only be monetised once.

What does the collapse mean for Canadian retail?

Hudson’s Bay was the last national department store in Canada, and its disappearance leaves a mid-market gap between discount (Walmart, Costco, Dollarama) and specialty or luxury (Simons, Holt Renfrew, brand boutiques) that no one has yet filled. Simons, the Quebec family-owned chain, has expanded cautiously into former Bay territory; Uniqlo, Zara and Aritzia have taken selected mall spaces; Amazon and Shein absorbed much of the apparel spend. Canadian brands that used the Bay as their main wholesale channel, from Canada Goose to smaller labels, have had to build direct-to-consumer capability or find new partners, a shift discussed in the Lululemon and Aritzia story.

For mall owners the loss of 80 anchors accelerated a redevelopment they had already begun. Former Bay boxes at Yorkdale, Square One, Pacific Centre and Chinook are being split into multiple tenants, residential towers or entertainment uses. For downtown cores, especially Toronto’s Queen Street, Vancouver’s Granville Street and Winnipeg’s Portage Avenue (where the historic store had already been donated to the Southern Chiefs’ Organization in 2022), the empty flagships are visible symbols of post-pandemic decline.

The collapse also fed into the 2025 political mood. It occurred at the height of the tariff dispute with the Trump administration and was widely, if not entirely accurately, folded into the narrative of American ownership hollowing out Canadian institutions, alongside the earlier foreign takeovers of Tim Hortons, Rona and Shoppers’ rival Rexall. That mood helped Canadian Tire’s “Made for Canada” positioning and the revival of the Stripes. The broader trade backdrop is explored in the Canada–US trade war story.

What can founders and investors learn from Hudson’s Bay?

First, financial engineering has an expiry date. Selling leases, mortgaging flagships and spinning assets into joint ventures each produced a one-off gain, but the operating business was left paying rent to the new owners of its own buildings. Investors evaluating a retailer owned by a real-estate-minded sponsor should ask how much of the historical return came from transactions rather than trading.

Second, carve-outs need a balance sheet of their own. HBC Canada was separated from Saks Global with its liabilities intact and its support functions gone. Any founder spinning out a division, and any acquirer buying one, should model the stand-alone cost base and liquidity under stress before signing.

Third, legacy is not a moat. The Bay had the oldest charter, the most recognised stripes and prime locations in every major city, and none of it generated enough cash to survive a bad winter. Brand equity has value, as Canadian Tire’s $30 million purchase shows, but only when attached to an operator with a low-cost model.

Fourth, stakeholders remember how an ending is handled. The charter auction, with the Thomson and Weston families donating the document to museums, is the part of the story Canadians will recall most warmly; the severance shortfall for 8,300 employees is the part they will not. Leaders planning an exit, even a forced one, should assume both will be written down.

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