'We're not Neiman Marcus': Hudson's Bay says it plans to be around for another 350 years despite recent troubles
As the key Christmas shopping season was kicking off, Hudson’s Bay Co. ULC found itself shut out of a mall in Coquitlam, B.C. It turned out that the retailer hadn’t paid rent in months and the landlord opted to lock the doors to the store in the middle of the night.
The dispute between HBC and the landlord in late November was not an isolated one. Property firms behind prominent shopping malls in North America have fought several high-profile court battles in recent months against the department store chain, looking to claim rent arrears that total in the millions of dollars when added all together.
The resulting attention to the unpaid rent didn’t exactly inspire confidence that HBC was on sound financial footing, something the 350-year-old company is all too aware of. In a lawsuit filed to regain access to its store at the Coquitlam Centre Mall, the retailer told the Supreme Court of British Columbia that its reputation was on the line.
“Hudson’s Bay’s evidence is that this state of affairs may signal to the world that it is in severe financial difficulty, something that Hudson’s Bay denies,” Justice Shelley Fitzpatrick wrote in an interim decision.
The judge agreed with HBC, and ordered the landlord to allow HBC back into its store. But Fitzpatrick also ordered HBC to repay half of the hundreds of thousands of dollars in arrears and half its rent going forward until “a more fulsome hearing” could be held.
Judges in other cases, including ones in Ontario and Quebec, have given similar interim orders for HBC to pay some of what it owes, at least until the cases can be heard on their merits.
In the meantime, landlords, industry watchers and consumers are left to wonder whether HBC is actually in “severe financial difficulty,” or, as the company suggests, it’s only been made to look that way.
Ian Putnam, one of HBC’s top executives, is clear on this point: Canada’s oldest and most storied department store chain will survive.
“We’re not a distressed retailer,” the chief executive of HBC’s property development arm said in December. “There is no doubt that Hudson’s Bay emerges at the end of this pandemic as a strong retailer and will continue for another 350 years or more.”
This latest legal drama, he said, isn’t about a retailer that can’t pay its rent. It can. Instead, HBC believes it’s a story about a major department store chain fighting for a fair deal on rent during a pandemic, only to be unjustly cast as another downward-spiralling retailer headed for the same demise as some of its one-time competitors.