The Current - What went wrong at Hudson's Bay?

Episode Date: March 18, 2025

The liquidation of all Hudson's Bay stores could start as early as Tuesday, bringing about the end of a Canadian icon. We dig into what went wrong, and the company’s complicated history as a trading hub that played a key role in colonization.

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But it's time to imagine what we can do with more. Join Scarborough Health Network and together, we can turn grit into greatness. Donate at lovescarborough.ca. This is a CBC podcast. Hello, I'm Matt Galloway, and this is The Current Podcast. At The Bay, our cosmetic and fragrance department is a thing of beauty.

Because we have it all, cosmetic treatments,, fragrances and the best of customer service. Great names like Conique, Oscar DeLaurente, Giorgio Beverly Hills, Cher Uninhibited. I personally guarantee your complete satisfaction. Hi Bob. Hi Cher. Great names at the Bay. Yes indeed there was a time back in the early 90s when The Bay attracted all the big names with stars like Cher appearing in their TV commercials.

The retailer's star power got a whole lot dimmer in recent years though as it struggled financially. Then last week there was news that Hudson's Bay had filed for creditor protection. Yesterday the company was in court asking for approval to liquidate all of its stores. This has stirred up, as you can imagine, a reaction in Canadians across this country. I came here as fast as I could to use my gift card, because I know it's going to be gone next.

We used to come to the Bay and shop just because it was easy with four kids with a stroller. So it's nostalgic for me, but I also feel sad for the staff. I'm sure there's a lot of uncertainty, but they were still lovely. They were still helpful They were still kind. I'm sad to hear you know, but I'm not surprised I'm worried because I'm 66 over more recent years the Bay has been really my go-to store and I would say that probably

60% of the clothes that I buy have been from the Bay. I mean, I think it'll be a game changer, to be honest. Like, it's a big part of Canada's history. A big part of Canada's history indeed. Susan Krasinski-Robertson is the Globe and Mail's retail industry reporter. She's with me in studio. Good morning. Glad to be with you.

This is a company that has a 355-year history. It is, as we heard, a big part of Canada's retail landscape. How would you describe what the Bay has meant to this country? You know, it's funny. The Bay in some ways is more important symbolically to a lot of Canadians than it is as an actual retail operation these days following years of decline. But if you go back, it's had an incredible amount of significance over the history of this country, and going back before Confederation, of course.

You know, the Bay was given this monopoly over a huge swath of what is now Canada back in 1670. So its roots in this land go a long, long way back. And- How did it end up, I mean, if it has that history, and part of that, as you said, is maybe in the mind, not so much in the money that people are spending. How did it end up in such financial difficulty?

That is a story that goes back some years, but less years than you would think. You rewind about 10 or 15 years ago, and the department store model was already a bit of an antiquated model in the retail world, but there was still room for it. And some would argue there is still room for it if it's correctly run.

The Bay was making money and did have assets in this company. But over recent years, it has really declined as they under invested in those stores. There's been sort of a dual pressure going on with the Bay, external factors that have affected all retailers. You think of things like the pandemic, the recent years of inflation and high interest rates that have caused people to pull back on spending, that's affected everyone. E-commerce as well.

Of course, absolutely. But there's also been internal decisions made at the Bay that have contributed to that decline. And one of them was really under-investing in those stores. As traffic to those stores fell, they really shifted their focus away from the brick and mortar operations. And that is still where the Bay makes most of its money.

And if you think about retail fundamentals, you have to create an environment that people actually want to spend time in and spend money in. And that requires investment in staffing in revamping stores in appropriately stocking it with the right merchandise It requires a real focus and that's something that the Bay has lacked for a number of years now And so if you don't put that money in you end up with stores that I mean people might recognize this you go to the store

You can't find anybody to help you. It doesn't have what you want and it feels like it's a construction site Yeah, the escalators might be broken I was just in the Queen Street flagship in downtown Toronto yesterday and they've got a broken escalator there still. That's absolutely the sign of a retailer that is not focused on its operations and that can create sort of a downward spiral, right? You don't invest and traffic falls because nobody wants to be in the store and then you have less money to invest and traffic falls and on and on you go. So I said that it had filed,

the Bay had filed for creditor protection. What exactly is the company's financial situation right now? It's pretty dire. Not only are they carrying some debt, about $1.1 billion worth of debt, they're losing money and have been now for a number of years.

But also in addition to that, they have had a real problem finding support to take on more debt, to continue to prop up those operations. And that is support that has been there for them in recent years. This is not the first time that they've gone out into the market with their hand out. Just a couple of years ago, one of their biggest landlords Cadillac Fairview kicked them $200 million because they were in a liquidity crisis then as well. We reported back in 2023 that they were falling behind on payments to their vendors, the people

who stock their shelves and supply their stores. That's always a sign of danger. And they've gone out, as I said, for that help. But more recently, that help has seemed to dry up. We heard in court just yesterday that in February they were in talks to secure financing and those talks fell apart just hours before they filed for creditor protection

last week or the week before last, late, the week late before last. So they were in court asking for approval to liquidate the stores. That could begin as early as today, is that right? They're waiting on court approval for that, so we don't know exactly when it's going to begin. It will depend on when the court approval comes.

And it will also depend on whether some kind of an alternative emerges. You know, the discussions in court yesterday were quite animated and the judge really encouraged the parties, the landlords, the retailer to kind of go back to the drawing board and see if they couldn't find some kind of alternative solution. Because of course the landlords don't

want these liquidation sales either. You know, this is a, it's the kind of thing that can harm a mall if you've got a clearance sale going on, it harms other tenants trying to sell full price merchandise. And then eventually if that store closes down, it creates a big hole. And that was a really big problem.

If you go back to the, uh to the liquidation of Target in Canada, of Sears, those boxes in industry terms being empty were a huge problem for landlords across the industry. It's not easy to fill those spaces and it takes money to carve them up for other uses. And so no one really wants these stores to go away. They want them to survive. This is, as we've said, kind of part of Canadian history in many ways. It's a Canadian retail icon, whether it's successful or not. Now, it exists in the mind and the memory of many Canadians.

We're going to talk more about that coming up in a few moments, but the owner currently, the current owner is an American. Yes, yes. Is there the opportunity, and I don't know how you would work that, for a Canadian to swoop in and say, you know what, this matters, the Bay matters, we're gonna try to figure out a way to keep this thing afloat. I think that's the $1.1 billion question, certainly.

Who has the deep pockets or the big bag of money? That is the big question. And I think that there, you know, look, there are people out there who wanna save the Bay, the question is just who has the money and who has the wherewithal to come forward. But also is there a business case, to your point, if there are all these other opportunities,

the way that people shop is different, and whether that's going to small stores, if you're going to bricks and mortar places, or buying online, as so many people do, is there the need for a giant department store anymore? I don't think there is a business case for the Bay as it exists today. Is there a business case for a Bay that is smaller, that is well run, that is staffed

appropriately, that potentially operates on a smaller footprint? Possibly. Yeah. And you know, it's funny, this is something that impacts not just the Bay, not just their shoppers, but also small businesses across this country.

You know, I talked about them falling behind on payments to those vendors. I spoke with one vendor in Thunder Bay who was facing a situation where he was out $80,000 for some rolls of, you know, those little rolls of paper that go in the debit and credit machines. He sold those to the Bay, thought he'd won a great big client, was this wonderful opportunity for his business to expand and come to find out, you know, he has to chase them for months on end, more than a year to get paid. He's one of those vendors that they fell behind on.

And this frustration for him was particularly keen because he's an indigenous business owner and knows very well the problematic history of the Bay and indigenous peoples in Canada and was feeling just hurt and upset that he was dealing with this in 2025, told me that that's money, essentially, he told me that they took out of my pocket.

They have 9,000 employees, the pay does, or more than 9,000 employees. More than 9,300. So they are also watching this very closely. Absolutely. This is their livelihood. Is this the end of the department store? I mean, I'm old enough to remember there's a long list that I wrote down, Sears, Eaton's, Simpson's, Zeller's,

the list goes on and on and on. Those are all gone now in many ways. Is this the death of the department store? That's a really big question. The answer to those kinds of questions are almost never as simple or as clear as we would like. You know, you think about another Canadian retailer, Simon's, they operate- Does very well.

Yes, they operate a department store, and they're opening more. They're building more because the demand for their department stores is there. So is it the death of the department store? No. Is the department store industry shrinking? I think that's undeniable.

But I think if you look at Simons in the mid-range and some of the department store examples at the higher end, like Harry Rosen or Holt Renfrew, you can see a place in the market for these stores if they're properly operated and I think that's the key point. And so if somebody is to come back into this sector and try to resuscitate the bay, they need to in your words properly operate it and fund it and make it a place that people

want to go to. Absolutely. And you know, there's another key point that happened with The Bay, another key misstep, which is they did this bizarre sort of restructuring a little while back where they split off the e-commerce operations from their brick and mortar stores. You talked about e-commerce and, you know,

even department stores, even retailers that make the bulk of their money from physical stores, they have to invest in their digital operations. The Bay made this very strange decision to hive those off. It created all these inefficiencies. You have different teams doing different things in businesses that really should be integrated. So that's another point to make. Not only do you have to operate those stores correctly, but you also have to create a structure around those stores, a corporate structure that works and that isn't debt-ridden, that is operating properly, integrating e-commerce and brick and mortar, and that has a chance

for a future. That's certainly not where the Bay is today. We will watch to see what happens with the Bay. Susan, thank you. Thank you. Susan Krzyzinski-Robertson is the Globe and Mail's retail industry reporter. She was here with me in our studio in Toronto. In Scarborough, there's this fire behind our eyes. A passion in our studio in Toronto. when anyone could imagine. But it's time to imagine what we can do with more. Join Scarborough Health Network and together,

we can turn grit into greatness. Join it at lovescarborough.ca. At Desjardins, we speak business. We speak startup funding and comprehensive game plans. We've mastered made to measure growth and expansion advice, and we can talk your ear off about transferring your business when the time comes.

Because at Desjardins Business, we speak the same language you do, business. So join the more than 400,000 Canadian entrepreneurs who already count on us and contact Desjardins today. We'd love to talk business. The liquidation of the Hudson's Bay Company is potentially the final chapter for an institution that was, as we've said, foundational to Canada as we know it today. We brought together a couple of people with thoughts on the company's history and its ongoing legacy. Stephen Bowne is a

research, pardon me, a historian and author of the company, The Rise and Fall of the Hudson's Bay Empire. Negan Sinclair is a professor of Indigenous Studies at the University of Manitoba. He's the author of Winnipeg, Visions of Canada from an Indigenous center. Good morning to you both. Good morning. Stephen, what did you think given your work in researching the history of the Bay when you heard that this company was planning to liquidate? the history of the Bay when you heard that this company was planning to liquidate? Well, I mean, as a historian, my preoccupation was always in the early history of the Bay and how it transformed the North American economy and culture, et cetera. So I haven't shopped there very much,

like most Canadians in the last several years, But I think the loss of these iconic buildings in the big downtown locations in all the major cities would just be a sad thing for Canadians in general, the loss of an iconic business that dates hundreds of 255 years ago, simply because those buildings are a tangible reminder or a tangible portal into understanding the past and the relationship that Canada's European indigenous peoples had. And I feared that the loss of the physical reminder might lead to a loss of the, a loss of the interests, a loss of our interest in the history. I'm going to come back to that in a moment.

Negan, from your perspective, what is the potential end of the Hudson's Bay Company and the Bay as we know it mean to you? There's no tears lost for the end of the Bay, particularly where I'm sitting is just out here on the prairies. The Hudson Bay Company started with profits from slavery from African slaves. Prince Rupert used funds from the profits of slaves to come and build a fur trade economy that exploited indigenous peoples, that took money from the local economy, continues as you heard with continuing to owe Manitoba businesses and businesses across

the country, when it finally wasn't able to make enough profit and exploit people, whether it was back in the day when they refused to let indigenous families marry into fur traders' lives or letting indigenous peoples trade anywhere but the forts or even operating forcibly in English. That's a big company, has always been a company that hasn't always been friendly to the communities in which it works in and there's really not a lot of love lost. Even downtown here in Winnipeg, there's a huge Goliath building which is now the rest of us have to deal with after they've taken all the profit and exploitation from this

area and we now have to figure out what we're gonna do with this Goliath building in the downtown of Winnipeg. Tell me more about that. I mean, what do we know about the societies that the Hudson's Bay Company traders encountered when they arrived in 17th century North America? I think a fallacy that often exists is that the Hudson Bay Company somehow instituted

or created the fur trade. They entered a massive international industry that was already taking place in North America amongst indigenous peoples. The Hudson Bay Company upon arriving, and the British were quite xenophobic. They didn't make relationships easily, not like the French who had woven quite nicely, and the Northwest Company, the French company here in Manitoba, had woven quite nicely into that industry, into those indigenous trading networks that had been

in operation in the 17th century. It was the Hudson Bay Company who came in quite stringently, quite strongly, forcing certain operations to only occur under British prices, under British law, under British social norms. Even though none of that really was enforceable, the Hudson Bay Company came in quite like a very strong force and began to impose their will quickly and by the 17th century had started to create a foot hold in the indigenous fur trading networks because they were trying to produce cheap goods for profit back in the Commonwealth. Stephen, your book looks in detail at the early history of the Bay and the role that

indigenous people played in building the Hudson's Bay Company. Tell me a bit more about that. Yeah, I mean just a point of observation that Hudson's Bay Company, you know, it was in existence for 150 years before the Northwest Company was even in existence for. So there's a lot of history to look at in the intervening time period. When the Hudson's Bay Company was formed, it was a very, very small enterprise. There were a few dozen of employees and a rented ship that would go back and forth across the Atlantic once a year in the spring and the fall to service what began as a single and then evolved into a small handful of, you know, basically log fort outposts along the frigid rim of Hudson's Bay. And for those people that cultural integration

was as much of their business practice as the commerce. They learned local languages, they married into local indigenous societies, and for really a hundred years they never ventured inland or explored any of the land around them. They operated these what I call wholesale distribution centers and the retail aspect of the trade was managed by indigenous trading captains, some of them who were quite famous such as a fellow named Atikashish who for many many years had a multi-year business circuit that extended all the way to the Rocky the you know, occasionally he would take someone on his journeys with him, such as Anthony

Hende, and everyone talks about the Anthony Hende expedition as if it's, you know, something that was initiated by Anthony Hende or the company or whatever. Really, Anthony Hende was just taken with a tickish shush on his journey, and he mentions that in his journal, but it's become distorted in how we perceive the interior of the continent to talk about some of the famous explorers as if they were on their own doing this instead of being taken through the lands that these people already operated in.

So it was only after 120 years, I believe, when a smallpox epidemic that came up from Mexico was completely devastating to many of the interior peoples of the continent that the Hudson's Bay even shifted from being wholesale into retail. And that's when it became its, perhaps its more famous era when, you know, people imagine the Hudson's Bay Company as having, you know, a huge degree of power and a whole bunch of forts sprinkling the western and northern part of the continent. That didn't begin until the 1780s.

Until that point, the company was, well, just their wholesale distributors. And so, there's multiple phases of the history of the Bay, and when you're talking about an institution that has survived for many centuries. It's really impossible to sum up its actions and its activities in a single, you know, way of understanding there's many, many generations of people have lived their lives within the context of the fur trade as, as run by the Hudson's Bay Company. And yet, it's a very, it's, look, I've written 400 and 500 page book on it and that was cutting short of any part of it. It's a fascinating history, but it can't be

summed up in a simple manner of whether it was good or it was bad or it was ugly. It was all of these things over multiple time periods and with different perspectives from different peoples and points of view, it's a very slippery history. However fascinating. You've mentioned the building in Winnipeg, the giant building in the heart of downtown that was turned over to the Southern Chiefs. When we were there in Winnipeg, I said last year,

there was great excitement about this and what this was going to mean. The Hudson's Bay Company has taken some steps in recent years to acknowledge, as we've talked about, some of the uglier parts of its history. Where is that at now if the company itself is facing extinction? Just further to what my colleague there just talked about, in the late 18th century, the name of my community, the original name of my community, while it's now known as Peguis First Nation, the site in which we were removed,

that we moved to in 1785 was called Naboo in Ossipi, which is Death River. And that's precisely from the, that smallpox epidemic that you're a college, we're talking about. So absolutely the Hudson Bay Company had a massive footprint in the lives of the people who are here, the thousands of indigenous nations that they came into contact with. Now today in the downtown of Winnipeg, there's a massive building that was created eight decades ago in 1926, I guess a little bit longer, 10 decades ago, where a huge palatial building at the time was made out of the largest amount of concrete ever seen in the prairies exists.

It was where the Hudson Bay department store, the iconic department store takes place and it actually takes more amount of money today to rip it down and to build something else than it would be to build something else. It is something in Winnipegers have inherited, rates smack dab in the middle of some of the most complicated areas of the city where many indigenous peoples who are homeless, who have suffered poverty for generations, some of that rot from the exploitation, that colonization, which the Hudson Bay Company has been a part of. Ironically, it is the Southern Chiefs

Organization, an organization of a couple dozen chiefs and First Nations communities who have taken upon themselves to take control of that building and to try to renovate it into a mixed use commercial center for seniors, a health center. They've actually partnered with the Winnipeg Jets to try to bring business to the downtown. The problem, of course, is that renovating this building is a massive undertaking involving hundreds of millions of dollars that may or may not arrive. It's something that is requiring the massive amount of energy for both Indigenous peoples,

businesses downtown, Canadian businesses. And now what we've got is we've got a situation in which it may or may not be after a pandemic a focus of the federal government, of businesses and of First Nations governments who already have their own challenges to be able to invest in such, renovating such a project. So the legacy will, I mean, it will still be felt there in downtown Winnipeg. I mean, even in just in that husk of a building. The Hudson Bay Company is just like the train line created by Sir John A. MacDonald, an

iconic part of every single person's lives on the prairies in Canada. You cannot escape it. It doesn't really matter if a department store ends. There will be the Hudson Bay Company's legacy felt for many, many generations. And one good thing that's happening out of this is the Hudson Bay Archive, which is a bunch of the history of early Canadian, British and First Nations contact, is going to continue. It is an incredible legacy. I invite anybody to come to Winnipeg to check out the Hudson Bay Archive.

It is a remarkable set of understandings, letters, documentation of trade, and much of that is First Nations people who were able to gain employment from some of their time in the Hudson Bay Company. I don't think that in any way sort of makes up for some of the real horrible legacies that the Hudson Bay Company leaves behind, but at the same time, a remarkable story

of Canadian history that exists, and that archive will still continue. It's good to speak with you both about this. It is, in Stephen's words, a complicated history, good, bad and something in between. Thank you both for being here. Thank you. Thank you. Miigwech, thanks so much. Stephen Bowen is an historian and author of The Company, The Rise and Fall of the

Hudson's Bay Empire. Negan Sinclair is a professor of Indigenous Studies at the University of Manitoba and author of Winnipeg, Visions of Canada, from an Indigenous center.