Workers brace for the inevitable as Hudson’s Bay liquidates

That was the norm — until 2023, when online orders dried up.

Reassigned to handling inventory shipments to retailers, Grell watched as demand, again, vanished.

Then, after nearly eight years with the company, he was laid off — then recalled — thrice, with the longest period of unemployment lasting seven months.

He was excited to be called back in early March, only to learn the devastating news — Canada’s oldest retailer was teetering on bankruptcy with more than 9,000 jobs at stake.

“My plan was to retire there,” said Grell, 61, who just sold his fishing and paintball gear to scrape together rent. “It’s the oldest company in North America, so you figure this is gonna be here forever.”

On Friday the Ontario Superior Court approved the beleaguered retailer’s plans to liquidate all but six of its stores beginning Monday. 

The company had initially asked to liquidate all of its locations, which include 80 Bay stores, three Saks Fifth Avenue stores and 13 Saks Off 5th stores, and nearly half a billion dollars worth of inventory, after the company failed to secure financing to restructure the $1 billion in debt owed to nearly 1,900 creditors.

To pay down some of that debt, the 355-year-old retailer will also put all of its leases with landlords up for sale and seek last-minute buyers and investors to acquire its intellectual property and parts of its footprint. 

The six locations the company will keep — at least temporarily — are its flagship store at Yonge and Queen streets in Toronto, the Yorkdale mall store, one at Hillcrest Mall in Richmond Hill, as well as three Quebec locations in Montreal, the Carrefour Laval mall and Pointe-Claire. 

The heartbreaking news means the end of an era for Marissa Loewen who worked at the Calgary and Edmonton stores for 10 years as a retail salesperson.

Loewen started working as a 20-something in 2000, and remembers the mornings coming alive as customers gathered at the Bay Cafe for coffee and breakfast.

In the evenings, the cosmetics area of the store hosted special events, transforming into a hub of fashion, food, and community, with the sound of a grand piano filling the space.

“They really did build stores around what the community needed,” said Loewen, “in terms of, what the products were and what you could buy.”

Those days are long gone, now, with retail outlets resembling ghost towns, never quite recovering from the fall in foot traffic during the pandemic.

“Each store was very much like a family,” said Loewen, who counted the store as her favourite place to work as the owner of an event pop-up company she started after her time at Hudson’s Bay. “They actually had an incredible culture of support for their employees. 

In the early 2000s, Loewen said salespeople went through a three-day training boot camp called ‘Yes, we can’ — a company tag line reminding employees to be where the customers need them.

“These are lessons that I’ve learned,” said Loewen, “and used multiple times in my current career path.”

At the Edmonton store, Loewen recalled curating clothes choices for families from the Northwest Territories and Yukon who would fly in for a big shopping trip.

But in the years leading up to 2010, she began seeing an erosion in company culture and standards. ‘Yes, we can’ was scrapped, employees had to wear uniforms instead of personalized Bay clothing, and there was precious little staff training, forcing veterans to teach new hires on the fly.

“I don’t know if that was because they were sold,” said Loewen, referring to the Hudson’s Bay takeover by U.S. real estate investor Richard Baker in 2008. “They were no longer a Canadian company.” 

Over the past decade, the once-beloved company has undergone a radical change under the new leadership.

In 2011, Baker sold most of the leases of Zellers, which Hudson’s Bay had acquired in 1978, to U.S. retailer Target for $1.8-billion.

The company then went public in 2012, raising $365 million, only to be taken private again eight years later in 2020 as the retail giant’s stock price plummeted in lockstep with sales.

In 2019, Hudson’s Bay exited its European foray and sold the operations of its American department store chain, Lord & Taylor.

Just one week after the company went private, COVID-19 struck, sending the retailer into crisis mode to deal with lockdowns and a scramble to e-commerce.

And while the retailer received two court orders to pay its landlords millions in unpaid rent and was forced to close its Bloor and Yonge Street location in 2022, online sales were booming.

The company’s “aggressive e-commerce expansion,” included investing $130 million into infrastructure, logistics and marketing between 2021 and 2022 with more than 500 employees hired to keep up with demand. Optimism, however, was short-lived.

“Despite the scale of these investments,” read a court affidavit from Hudson’s Bay CFO Jennifer Bewley, “the strategy did not yield the anticipated financial returns.” 

In order to offset the “new wave of economic and operational setbacks,” the company launched a series of cost-cutting measures in 2023 and 2024, including laying off hundreds of employees and borrowing $200 million from an affiliate of Cadillac Fairview and a subsidiary of the Ontario Teachers’ Pension Plan.

Those efforts also failed to turn things around, with the company behind on payments to some landlords and suppliers for months. Court documents said the inability to secure more financing amid the U.S.-Canada tariff tensions earlier this year became the final blow, leading to the creditor protection filing.

“We’re losing a part of our nostalgia, but also we’re losing a spine of how our communities are changing and adapting,” said Loewen. “Future retailers will be able to take a lesson from the Bay and say, ‘what used to work … how can we start to bring people together and not just shop, but actually have an experience?’” 

Grell first lost his job in December 2023 and was called back three weeks later as online orders temporarily surged and then dried up again, leading to another round of layoffs in March.

The second layoff lasted seven months, during which time Grell searched in vain for work.

“It’s very distressing,” he said, “mentally and financially.” 

With liquidation starting Monday, Grell says everyone in his department is worried about losing their jobs in the coming days or weeks.

While the company reassured them that their pensions were safe, they were told severance pay was unlikely given the company’s debt load.

Grell’s co-worker, Mei (whose full name is not being used by the Star because she is not authorized to speak to the media), said she also went through several rounds of layoffs last year when her husband was the sole breadwinner, dipping into savings for mortgage payments.

This year is her eighth with Hudson’s Bay.

She injured her lower back a few years ago at work and is still undergoing physical therapy.

Due to reduced staffing, she’s had to take on more lifting tasks which causes her wrists and lower back to ache more often.

Mei never imagined she would lose the job she once considered stable. Now, she’s dusting off her accounting skills, hoping to carve out a new career path.

Grell, for his part, is reaching out to temp agencies for work, but U.S.-Canada tariff war uncertainties are making things difficult.

“I’m gonna be 62 in two months. It’s harder for the older people in the company to get a job than the younger people,” Grell said. “That’s the brutal truth.”