TORONTO — Hudson's Bay insiders, including its head honcho Richard Baker, have until the end of Monday to declare whether they're interested in making a bid for any of the ailing company's assets or leases.
Twin processes underway to uncover interest in the company's physical and intellectual property force the department store's parent company, its subsidiaries and its leaders to reveal whether they're eyeing an investment in the business or a purchase of its remaining treasures.
Everything from leases to the rights to the company's famed Stripes brand and even its art collection may be up for grabs, though the company nor its court filings have detailed precisely what's on the table.
Hudson's Bay declined to comment on whether it or its affiliates, including executive chairman Baker, will seek any of the assets.
If they plan to make an offer for leases, Alvarez & Marsal, a third-party appointed by the court to guide Hudson's Bay through creditor protection, and real estate broker Oberfeld Snowcap Inc. must both be alerted. Neither replied to a request for comment asking whether they'd received word of a bid.
If the insiders want other assets, Alvarez & Marsal and Reflect Advisors, Hudson's Bay's financial advisor, must be told. Adam Zalev, Reflect's managing director, said in an email, "at this time it is not appropriate for us to provide comments to the media."
In general, insiders at companies under creditor protection make bids for assets because they can get the property "at a heavy, heavy discount," said Insolvency Insider newsletter editor Dina Kovacevic.
"It's a way to buy the assets for less than they would be worth were they not being sold as part of an insolvency process and especially to absolve the company of its liabilities," she said.
Any bid from Baker, who once told media he plans to run the company until he dies, could extend his reign, which began when his National Realty and Development Corp. Equity Partners bought Hudson's Bay in 2008 from the widow of late South Carolina businessman Jerry Zucker for $1.1 billion.
Some experts like Joanne McNeish, an associate professor at Toronto Metropolitan University specializing in marketing, have characterized Baker's Hudson's Bay acquisition as "the point at which the company began its slow death."
"Investment firms are like house flippers ... A house flipper rarely deals with the underlying business issues," she said in an email in mid-March.
Under Baker, the company went public in 2012 and then private through a takeover bid that had to be boosted twice to earn shareholder approval in the weeks before Canada was hit with COVID-19 pandemic lockdowns.
Shareholders were difficult to appease in part because Baker presided over HBC while its stock was dropping — but many thought the company could use its vast real estate to turn things around.
Baker sold off much of the real estate and last summer, purchased rival Neiman Marcus and its Bergdorf Goodman for US$2.65 billion. He combined the luxury department stores with the Saks Fifth Avenue and Saks Off 5th chains he already owned in a new entity called Saks Global, effectively setting the stage for Hudson's Bay's creditor protection case.
Liza Amlani, Retail Strategy Group co-founder, reasons the assets Hudson's Bay has to offer would be attractive to a vast array of investors and businesses because they still carry a lot of value and may come at reduced prices because of the company's distressed state.
"The intellectual property and loyal customer following could be a cash cow for a new buyer if they strategically invest in these assets," she said in an email, naming leases, the stripes, housewares brand Gluckstein and discount banner Zellers as potential purchases.
While the clock is ticking for Bay affiliates to declare their interest in obtaining assets, companies and individuals not linked to the beleaguered department store have more time.
Hudson's Bay and its affiliates have to express their interest in making investments or bids well before others to ensure the sales processes are fair and don't favour insiders.
Until these parties declare they won't make a bid, the court ordered Alvarez & Marsal, Oberfeld Snowcap and Reflect Advisors to "limit the sharing of information" with them "to ensure and preserve the fairness" of the sales processes.
Once outsiders wanting to buy Hudson's Bay assets declare an interest, they will be asked to sign non-disclosure agreements to get access to financial information helping them assess whether they want to advance a deal.
Landlords can often bid on leases through such processes to regain complete control over who fills their vacant spaces, Kovacevic said.
Anyone internal or external interested has until April 30 to make a binding bid for Bay assets. Binding bids for leases are due May 1. These bids must be accompanied by a refundable deposit of 10 per cent of the purchase price.
Hudson's Bay, Alvarez & Marsal, Oberfeld Snowcap and Reflect Advisors will assess the bids and decide which is most attractive to take and may choose to auction off assets if several parties have come forward.
The court must approve any sales. In the overall asset sales process, its approval must be sought by May 30. Leases that are not bid on or terminated must be disclaimed by July 15.
This report by The Canadian Press was first published April 6, 2025.
Tara Deschamps, The Canadian Press
