A Quebec Superior Court judge has granted Hudson’s Bay Company an extension on its creditor protection until July 31, 2025, providing the iconic Canadian retailer critical breathing room as it navigates a comprehensive restructuring process. The decision, finalized yesterday in Montreal, marks a significant development for the 354-year-old company that has been struggling against mounting debts and shifting consumer preferences.
The retailer initially filed for protection under the Companies’ Creditors Arrangement Act (CCAA) in March, citing “unsustainable” rent obligations and deteriorating market conditions. Court documents reveal Hudson’s Bay has accumulated over $565 million in lease-related debt across its 82 Canadian locations—an amount that company executives described as “impossible to service under current retail market realities.”
“This extension isn’t just about buying time,” said Richard Baker, Executive Chairman of Hudson’s Bay. “It represents our commitment to emerging as a stronger, more agile retailer prepared to meet the demands of today’s consumers while honoring our historic Canadian legacy.”
The restructuring plan, which creditors will vote on in late June, outlines a significant transformation of the company’s brick-and-mortar footprint. Hudson’s Bay plans to close 16 underperforming locations while renegotiating leases for another 28 stores where current terms have been deemed “financially untenable.” The company has already secured preliminary agreements with landlords representing approximately 40% of its retail space.
Financial analysts watching the case note that this represents the most profound change in Hudson’s Bay’s operations since its founding in 1670. Retail industry data shows department stores have faced persistent challenges, with the sector experiencing a 23% decline in overall market share since 2015.
“What we’re witnessing is not simply a financial restructuring but an existential reinvention,” explained retail analyst Maryam Khorasani of RBC Capital Markets. “Hudson’s Bay is attempting something few heritage retailers have successfully accomplished—maintaining brand relevance while dramatically reshaping their operational foundation.”
The extended protection period comes with strict oversight mechanisms. Hudson’s Bay must provide monthly financial reports to creditors and the court-appointed monitor, Ernst & Young. The company must also demonstrate measurable progress on its restructuring milestones, including $120 million in operational cost reductions by December 2024.
For the 13,000 employees across Hudson’s Bay’s operations, the extension provides temporary job security, though the company has acknowledged that workforce reductions will be “unavoidable” as part of the restructuring process. Union representatives have expressed cautious optimism following assurances that any staff reductions will be implemented with “transparency and appropriate severance provisions.”
The retailer’s digital transformation strategy represents another critical component of its revival plan. Court filings indicate Hudson’s Bay will invest over $75 million in enhancing its e-commerce capabilities, including a complete platform overhaul scheduled to launch in early 2025.
“The traditional department store model isn’t dead, but it requires fundamental reimagining,” said Jennifer Thompson, Hudson’s Bay’s newly appointed Chief Digital Officer. “Our goal is creating a seamless experience that honors our heritage while embracing the convenience consumers now expect from modern retailers.”
As Hudson’s Bay navigates this extended protection period, the outcome will likely serve as a case study for legacy retailers facing similar challenges in an increasingly digital marketplace. Whether this iconic Canadian company can successfully reinvent itself while maintaining its historic identity remains one of the most closely watched stories in North American retail—can a company with roots in the fur trade era successfully transition into the age of one-click shopping?
