TORONTO — When Hudson's Bay started liquidating all of its stores and searching for a potential new owner, Ruby Liu, a British Columbia mall owner, was determined to prevent Canada's oldest company from disappearing. She initially made an offer to acquire the company in hopes of restoring it to its former glory. However, Canadian Tire was eventually selected to purchase its name and trademark stripes, pending court approval, thwarting Liu's plan.
Undeterred, Liu negotiated a deal to take over up to 28 leases held by Hudson's Bay and its sister Saks businesses across Alberta, British Columbia, and Ontario, with the ambition of transforming these locations into "a new modern department store." Despite her persistence and the substantial financial backing she reportedly possesses, transitioning this vision into reality presents considerable challenges.
Jenna Jacobson, the Eaton Chair in Retailing at Toronto Metropolitan University, emphasized the complexities involved, stating, “There is a lot of research, a lot of planning, a lot of capital, a lot of logistical challenges, inventory, branding, and people that need to be figured out.” One of Liu's primary tasks will be to convince landlords who own the large retail spaces to support her initiative; otherwise, court approval for her plan may not be forthcoming.
Several landlords have indicated to The Canadian Press that they are awaiting more details before making decisions regarding Liu's proposal. Don Gregor, an executive vice-president at Aurora Realty Consultants, believes securing their approval could be challenging. He noted that landlords prefer to maintain control and often resist having tenants chosen for them, especially in the case of "trophy leases" that come with deep concessions.
Many of the leases Liu is targeting have historical significance, dating back to the inception of the malls or properties in question. Gregor suspects that these leases include rent charges that are "well-below market" and may have clauses restricting what other tenants can establish nearby. He remarked, “(Landlords) would have loved if HBC had gone bankrupt… and just get the space back because all the restrictions that anchor tenant held in that old lease would have gone away.”
As a seasoned businesswoman, Liu has a wealth of experience. She reportedly made billions through real estate developments in China before moving to Canada. In Canada, her company, Central Walk, acquired several prominent properties, including Tsawwassen Mills, Mayfair Shopping Centre, Woodgrove Centre, and Arbutus Ridge Golf Course. These shopping centers feature a mix of Canadian mall staples and unique attractions such as Bass Pro Shops and L.L. Bean.
Despite the potential Liu brings to the table, Gregor suggests that she will need skilled legal assistance to navigate the complexities of such a significant and intricate deal. One advantage Liu might have is that landlords generally dislike leaving substantial portions of their properties vacant, as noted by retail strategist Lisa Hutcheson from J.C. Williams Group. If landlords approve of Liu's proposal, they would benefit from her willingness to undertake necessary repairs—repairs that Hudson’s Bay failed to address—potentially alleviating their own burdens.
However, the financial demands are steep. Gregor estimates that it would cost about half a million dollars to repair the HVAC system at one of Hudson's Bay's larger locations, while elevator fixes could take up to a year. He also believes that Liu will need to invest between $100 to $150 per square foot merely to remodel the spaces, with each store being several hundred thousand square feet in size, complicating the repositioning process.
Hutcheson pointed out that La Maison Simons is currently spending around 18 months transforming some former Nordstrom locations in Toronto. Achieving a similar turnaround will require Liu to devise a new concept capable of competing with established department stores like Simons and Holt Renfrew and the vast array of online options available.
Liu has committed to prioritizing previous suppliers and vendors associated with Hudson's Bay while emphasizing the hiring of former Bay employees, whose numbers totaled 9,364 before the company’s collapse. Nonetheless, Hutcheson warned of a potential gap between Liu's planning and the opening of her new stores, during which many past employees may find other jobs.
Despite these formidable challenges, Jacobson believes that if Liu leverages this opportunity to emulate the successful overseas department store model—such as incorporating new brands, supermarkets, restaurants, and diverse digital experiences—she could revolutionize the Canadian retail landscape. Jacobson remarked, “If you look at the Chinese department stores, they often act like more of a destination in and of themselves than what we typically see in a Canadian or North American market.”
Ultimately, Liu's undertaking reflects both a revival effort for a storied name and a potential transformative venture within the Canadian retail industry.
