From pelt to grave

What killed off Canada’s oldest company?

Lawyers for the Bay were in court earlier today presenting their case for how the outfit wants to stiff creditors and quietly slip into the grave by the middle of June. It’s a total mess.

Hudson’s Bay Corp. owes about $1 billion in debt, plus whatever it will cost to unload 9,000 employees. The company said that recently it has about $3 million on hand, in cash. That’s enough to run for a few days.

So it’s after a full liquidation, but there’s always a chance some rich romantic with mush-for-brains will come along and try to bail out a Canadian icon that’s been with us for 355 years. After all, the story of the Bay is the tale of this nation, from trading beaver pelts to high-end fashion, the purchase of Saks Fifth Avenue and urbanity’s biggest malls. However, this seems to be the end of the road.

As you may know, the company was acquired in 2008 by NRDK Equity Partners – a New York-based enterprise specializing in retail ops and real estate plays. There’s been criticism that it raked off revenues from the Bay’s 80 Canadian outlets while reinvesting little. And then came Covid. That changed everything.

People stopped shopping in person so much. Malls meant crowds and germs. They emptied.

Instead, online retailers blossomed. Amazon exploded. And no matter how much stock a Bay store carried, selling everything from bras to bicycles and briefcases, it could not compete.

Besides, post-pandemic, nobody wants to leave their house anymore. Not to go to work. Not to bank. Not to shop. So the Bay, trying to manage, maintain and staff 53 million square feet of retail space across Canada, became another victim of the virus – which inexorably changed some human behaviours.

There’s more, now.

The Bay also argued in Ontario Superior Court that the economy is the enemy of its continued survival. Consumer spending has tanked because confidence is draining away. Downtown foot traffic has shrunk drastically (have you visited The Path in downtown Toronto lately?). And the company cites trade tensions with the US and the coming impact of tariffs, increased overhead, reduced margins and worried customers.

Finally, the Bay owes money to 2,000 other companies, including Canada Post, Adidas Canada, Estée Lauder, L’Oréal Canada, Levi Strauss Canada, Michael Kors Canada, Nike Canada and Ralph Lauren. Then there’s $740 million in mortgages to the banks. And unknown tax and government payment liabilities. Big ripples.

Not the first retailer to crash and burn post-Covid. Nor will it be the last. Especially now, with the economic environment growing more harsh.

Yesterday on Air Force One, Donald Trump again warned Canada and the world of what he’s planning in a few days. “April 2 is a liberating day for our country,” he said. “We’re getting back some of the wealth that very, very foolish presidents gave away because they had no clue what they were doing.”

Expected are reciprocal and sectoral tariffs. Trump says he will reinstate the 25% tariff against Canada and Mexico, plus the 25% tax on steel and aluminum stays, along with the levy in our oil and potash at 10%. The Canadian Real Estate Association now cites Trump’s policies as instrumental in causing a dive in house sales last month across the country. Listings, it adds, are also falling in most markets as both sellers and buyers lose confidence and draw in their horns.

And look at what the OECD is saying. The body encompasses 38 of the largest economies in the world (including us) and states Trump’s trade aggression is leading them all into slower growth and higher inflation. Commerce barriers will lead to less investment and lower expansion, it adds. Countries in the eye of the storm – like Canada – will be hit the most. Our growth will be halved.

By the way, employees who showed up to work at the Bay store in Sydney, NS, found the place locked this morning. Other locations to follow. Unpaid wages and severances for employees are considered unsecured claims. They will get little.

Well, if you do nothing else constructive today, get the hell out of the house and buy something. With a maple leaf on it.

About the picture: “No dog photo available,” writes John. “However one of our canine neighbors came over to check out our Hydro usage. Spies everywhere? Picture taken through our kitchen window.”

To be in touch or send a picture of your beast, email to ‘[email protected]’.

Source: https://www.greaterfool.ca/2025/03/17/from-pelt-to-grave/