Hudson’s Bay Co. ULC, comprised of Hudson’s Bay and TheBay.com, has announced it has sought bankruptcy protection, although the company’s associated retail operations in the United States won’t be affected by the move.
Hudson’s Bay commenced proceedings under the Companies’ Creditors Arrangement Act pursuant to an initial order for creditor protection from the Ontario Superior Court of Justice. The CCAA process will allow Hudson’s Bay to restructure its operations, streamline costs and refocus on its core strengths, the company stated.
Through a license agreement, Hudson’s Bay Company ULC has a small footprint of Canadian Saks Fifth Avenue and Canadian Saks Off 5TH stores. All Hudson’s Bay stores in the Canadian operation will continue operations. The CCAA proceedings do not affect U.S. Saks Global, a standalone entity created by Hudson’s Bay Holdings after its purchase of Neiman Marcus and distinct from Hudson’s Bay Co. ULC.
Hudson’s Bay is exploring strategic alternatives and engaging stakeholders to explore potential solutions to preserve and strengthen its business, the company added.
Restore Capital, LLC, an affiliate of Hilco Global, together with other lenders, will provide interim debtor-in-possession financing to finance Hudson’s Bay’s operations in the lead up to the “comeback motion” hearing, with a Canadian $16 million advance approved earlier today. Hudson’s Bay will be seeking additional financing to fund its operations during the CCAA proceedings, it indicated.
“Hudson’s Bay has been a vital retailer to Canadians for generations, and this decision was made with the best interests of our customers, associates and partners in mind,” said Liz Rodbell, Hudson’s Bay president and CEO. “While very difficult, this is a necessary step to strengthen our foundation and ensure that we remain a significant part of Canada’s retail landscape, despite the sector-wide challenges that have forced other retailers to exit the market. Now more than ever, it is critical that Canadian businesses are protected and positioned to succeed.”
