The Decibel - The B.C. billionaire fighting to take over Hudson’s Bay stores

Episode Date: July 8, 2025

On June 1, Hudson’s Bay – the iconic department store brand whose operation predates the founding of Canada – sold its last striped blanket. Struggling under $1.1 billion in debt, the company was granted court protection from its creditors in the spring. Since then, it’s cleared the shelves in liquidation sales, sold its brand identity and laid off more than 8300 people.Now, the courts are selling off what’s left, including the leases to nearly 100 massive store locations left sitting empty. B.C. billionaire Ruby Liu is set on buying 28 of those leases – but nearly every landlord involved is trying to stop her.The Globe’s retailing reporter, Susan Krashinsky Robertson has been reporting on the collapse of Canada’s oldest retailer. She’ll tell us all about who Ruby Liu is, what she plans to do with all of these stores and why she’s facing such dramatic opposition.Questions? Comments? Ideas? E-mail us at [e-mail]

The Hudson's Bay Company has sold its last striped blanket. In June, the iconic department store shut down for good after 355 years. And toward the end, it was really struggling financially. With more than $1 billion in debt, Hudson's Bay was granted court protection from its creditors in March. Since then, it's cleared the shelves in liquidation sales, sold its brand identity to Canadian Tire, and laid off more than 8,000 people. Now, the courts are divvying up what's left.

That includes auctioning off remaining art and artifacts, like the company's founding charter from 1670. The end of Hudson's Bay takes a piece of the country's history with it, and it also leaves a lot of empty retail space behind. Leases for nearly 100 locations across Canada are up for grabs. And one BC billionaire has her eye on dozens of those storefronts. Susan Krishinski-Robertson is the Globe's retailing reporter. She's been covering the company's collapse, and she'll introduce us to billionaire Ruby Liu, what Liu's plans are for all that retail space, and why nearly everyone involved is

trying to stop her. I'm Adrian Lee, and this is The Decibel from the Globe and Mail. Hey, Susan, thanks for joining us. Thanks for having me. Okay, so when you were last on the show back in March, the Hudson's Bay Company was facing a financial crisis. And since then, things have obviously gotten a lot worse. Now to cover its debt, it's selling off everything, which includes the leases to its retail locations across the country.

And the scale of this is huge. So Susan, can you walk us through the Bay storefronts that are back on the market? Yeah, so Hudson's Bay at the time that it filed for creditor protection, operated 80 of the Hudson's Bay stores across the country, as well as two Saks Fifth Avenue and 13 Saks Off Fifth stores. So nearly 100 stores all across Canada. And all of those have now been closed. So this represents a huge swath of empty retail space that's coming back on the Canadian market.

The average Bay store, it's humongous. These stores are around 300,000 square feet on average, much bigger than your average retail store. Some of them are even larger than that, depending on the space. There was a lease monetization process, which really just means they were asking for bidders to come forward and pay to take over

some of those store leases. And these leases are being sold as is, right? Whoever takes them over would have the same deal the Bay had with its landlords? Yeah, and that is actually why they hold value because the conditions that these leases have basically are sort of a vestige of a time when department stores were a lot more important than they are now. Department stores were known as anchor tenants in malls. And the meaning of that is simply that they were drawing people into these malls and the

other retailers in the malls were supposed to benefit from having that Hudson's Bay at the end of the hall because the Hudson's Bay brought shoppers in, and then they would explore the other retailers. Well, over the last decade or two, that situation has really flipped, where people aren't coming to the mall for Hudson's Bay anymore. And if anything, as these stores started generating a lot less traffic and also started basically going into disrepair.

These anchor tenants went from being an anchor that drew people in to being like an anchor that was dragging the malls down. Landlords even told me retailers who had stores adjacent to Hudson's Bay locations would bother the landlords for like, can I please move somewhere else in the mall? It was sort of that dank of an experience in some cases to be next to these failing stores.

So the conditions under these leases, as I say, were from a time when the anchor tenant was very important and because of that Hudson's Bay had the right to pay below market rent, cheaper rent, at least on the per square footage basis than a retailer elsewhere in the mall would be paying. That's one huge advantage of these leases. There are other conditions under the leases that are really valuable to a retail tenant. For example, anchor tenants often have the right to approve or disapprove of a landlord's plans for redevelopment in the mall. So if a landlord wants to do any kind of big construction

project on the site, they need to get approval from that anchor tenant. And those conditions are even so valuable that sometimes that anchor tenant can generate money from them. Hudson's Bay in the past has negotiated payments from its own landlords for the right to do these kinds of redevelopments.

So those are just a couple of examples of why these anchor tenant leases are theoretically valuable Not so valuable that 62 of them didn't go unbid for but There are people who believe that they have value and bidders did come forward for some of those leases, right? So 62 of those locations didn't receive any bids despite sounding pretty attractive as assets go So what's happening with those 62 properties? So those spaces are now being handed back to landlords. And that's extremely significant because we're talking millions of square feet in total of space flooding back onto the market. Not just that, but Hudson's Bay as it lost money completely stopped investing in these

stores for the most part. And so the spaces that are being handed back to these landlords have all kinds of problems, everything from stained ceiling tiles to broken escalators, heating and cooling systems that don't even work anymore. There are going to be massive repairs required on these spaces. And in some cases, these landlords may just knock them down altogether. In other

cases, landlords might have to spend money to basically carve those up to make them more attractive to new tenants who may not need the Hudson's Bay-sized space that is sitting there. Trevor Burrus Okay, so most of those locations are getting returned to landlords. But what about the remaining leases that were up for grabs? So for the remaining properties, this is where a BC billionaire comes in. Her name is Wei Hong Liu. She also goes by Ruby, Ruby Liu. And back at the end of May, Hudson's Bay announced a deal with Ms. Liu to acquire up to 28 of the leases. She has bid on those. And Ms. Liu is the executive chairman of Central Walk, which is a company in BC that's a mall owner. She owns malls, three

malls in BC. And she also made her money owning malls in Shenzhen, China, where she's from originally. Okay. So she's in the mall property business, but not the retail store business. And this is a lot of store she's trying to buy. So what do we know about her plans for all this space? Yeah, she has quite a an ambitious vision for these spaces. Ruby Liu is not someone who has ever operated a retail store before. And she has said that she wants to launch a modern department

store concept in these spaces, which, if you think about it, it's really kind of a stunning plan. She's never been a retailer. And she doesn't just want to open a couple of stores and see if her concept works. She wants to open 28 stores across Canada, going basically from zero to 100. And so this plan has really raised eyebrows, to say the least, among some of the landlords

whose spaces are involved in these bids. She has been successful so far in taking over three of those leases because they are located in malls that Central Walk owns. So there was really no roadblock to that process. She's now taken control. She received court approval. It was very smooth. But as I say, it's raised eyebrows among some of those landlords and it's also led to opposition from some of the other landlords who are saying they really don't want this plan in their properties. So she's dealing with pushback and we'll get back to that in a minute. But first, could you give us a sense of what we know about Ruby and how she's

approaching this process? You know, looking at some of the photos along with your reporting, Ruby Liu stands out as this flamboyant, big personality. Can you just give us a sense of who she is? Yeah, she is a really interesting character. She's been very outspoken throughout this whole process, particularly on the Chinese social media app Red Note, talking about all of her plans to revive this great Canadian institution. You know, she has been known to hold up signs with her designed logo for the stores, which features a red jewel. Obviously her name is Ruby. But the signs themselves are just sort of like 8 by 10 printouts

that she brings to things. When she received this pushback from the landlords, they launched a change.org petition asking people to support her campaign to take over these stores. That's not the kind of thing you usually see when there are disputes, commercial disputes in the retail industry in Canada. So yeah, she's definitely in the retail industry in Canada.

So yeah, she's definitely a different character, very colorful. Even when she exited the courtroom, when she received approval to acquire these three leases, which again are in malls she already owns, so she was never not going to acquire those. She was emerging from the courthouse with her fist raised in the air in victory. She's just a larger than life character. And at the same time, all of those things I think have raised real concerns among some in the retail industry about, you know, is she larger than life and a visionary or is she actually someone who's a big talker but doesn't have any real business plans or doesn't

know how to run a retailer, particularly a retailer of this size. We'll be right back. Okay, so we're sort of seeing this conflict set up here between the landlords and Ruby Liu. The landlords are opposing her efforts to buy these Hudson's Bay leases. What do we know about that pushback? Yeah. So it's landlords representing 23 out of the 25 additional leases outside of the ones in the malls that she owns that she has made bids for. So the majority of the landlords over these leases have all sent letters to Hudson's Bay and to the monitor overseeing this court process

Basically saying we don't want this and we will oppose it and in fact at a recent court hearing that I attended in Toronto lawyers for a couple of major Landlords Oxford properties and Cadillac Fairview among them Rose in court to essentially say we don't think that this is appropriate, and we don't want this. So there's been quite a bit of pushback. And we reported on meetings that Ms. Liu held with the landlords in early June

and heard about how those meetings went. And these letters that the landlord sent essentially described Ms. Liu being unable to answer basic questions about her business plans for the spaces, including things like who her suppliers would be to actually stock the shelves with products, whether she planned to open a warehouse in Canada or had a plan for distribution to these 28 stores across the country, which is a pretty complex network of stores to distribute products to,

who would run the operations, what her experience was, if any, in retailing, were just some of the concerns that these landlords raised. But I also spoke with another source who described a letter Ms. Liu sent to the landlords following those meetings, laying out in more detail some of her plans. And so there's a real back and forth here between what the landlords are saying and

what Ms. Liu has said, which is, no, no, no, I'm working on that. No, I don't have retail experience, but I plan to hire experienced retail executives to run this. And I have been working on setting up a network of suppliers to stock the stores, and I have set aside money to up a network of suppliers to stock the stores. And I have set aside money to invest in these stores. She has apparently put millions of dollars aside to invest in the repairs that are needed at these stores. Some of the landlords say that the money she described

investing would be insufficient given the kind of work that's needed on these stores. But that's another source of conflict. And so there are conflicting accounts here, the landlord saying essentially she has not presented anything like a real business plan. And Ms. Liu and her team saying, no, we are working on that and we're very serious. Is it normal for landlords to be asking for all this information? What's usually expected in a situation like this?

Well, so the CEO of Cadillac Fairview, which is one of the largest mall owners in Canada, think about the Eaton Center in Toronto, for example, that's theirs. They own and operate a number of properties across Canada. And the CEO sent us a statement saying that these kinds of questions are the sort of thing that any retail tenant should be able to answer and it is absolutely the normal course of

operations if you have a new retail tenant to stress test essentially whether they'll be successful. You can see why landlords would want to do that right because again think back to what I described about the Hudson's Bay being a drag on these malls. When you have a failing retailer in a mall an unsuccessful retailer the mall itself suffers. Malls are very careful about their mix of tenants and ensuring that they have the kind of stores or operations that are really going to draw people in,

because they need to offer that kind of value to tenants in order to draw the kind of rent they want to charge, in order for their malls to be successful. So this is really a very careful dance that these landlords do. And they really do care about whether the retailers that they're bringing into a mall are going to be successful. That's absolutely part of their business calculations.

And so the CEO of Cadillac Fairview, in order to press this point in his statement, said, we have not received any evidence of retail management expertise, established supplier relationships, logistical or e-commerce capabilities or robust and realistic financial projections. And he said that these were elements that would be foundation for even a single retail store, let alone a network of 28. So that's the kind of pushback that Miss Liu is receiving.

So have these landlords said what they're looking for instead? Because they do have these leases. Something's probably got to go in there. I guess I'm just wondering if her using these spaces is really worse than potentially having them sit empty. Jess Rauk Well, there is also a commercial reason why these landlords may want to push back. These landlords most likely want these spaces back. They are prime candidates for redevelopment. And yes, as I mentioned before, that's going to mean quite a bit of investment on the landlord's

part, but it's investments that it sounds like for the most part they're willing to make. And in fact, Ms. Liu has pushed back on some of the resistance that she has faced by accusing the landlords of essentially trying to stymie this court-supervised auction process so that they can get these leases back for themselves and do what they want with them. And she has basically said, if they wanted these leases so much, well, there was a process to bid on them.

And why don't they bid on them themselves? These leases do have value, because don't forget, as an anchor tenant, the Bay really had a sweetheart deal, particularly in the kind of rent it was paying. So these landlords, if they can take this space back, spiff it up, get it ready for either building something totally new. Think of an office tower, a condo tower.

Those are the kinds of developments that are happening in many commercial real estate spaces across Canada right now. Or rejigging that space and getting new retail tenants in there. Either way, they're going to make more money on that space. And so that would be Ms. Liu's argument as to partly why there is pushback here. Those landlords are hoping to have those spaces back for themselves. And how much has Ruby put down exactly for these 28 locations? Yeah, she has first of all paid six million dollars for the three leases that she's now taken over. That was the bidding amount on those three leases.

And the auction process required that bidders put down a deposit of no less than 10 percent of each of their bids. And we know from court documents that she has made a nine point four million dollar deposit on her bids for those other 25 leases. So that suggests that she's offered up to 94 million dollars for those leases. Or if you throw in also the additional three that she has acquired, she may have bid around 100 million dollars for the full 28 that she has acquired, she may have bid around a hundred million dollars for the full twenty eight that she wants to buy. Okay.

So if the majority of these landlords are opposing these bids, is it is it dead in the water? Is there no chance that it goes through? Not necessarily. So as I mentioned before, this is all happening under a court supervised process because Hudson's Bay has had court protection from its creditors, and now the court oversees everything that happens next with the company, including how the payments are made to the lenders.

The court had to approve the liquidation sales. The court has to approve everything that happens here. And so a judge is going to have to essentially make a decision at some point about what happens with these bids. The lawyers for the landlords have said that if the court tries to do what's called a forced assignment, essentially saying, too bad we're assigning the leases to Ms. Liu, she bid on them fair and square, she gets them, they've said they'll oppose that. And it's not outside of the realm of possibility that the court does not do

that. The court has to consider a number of different factors here, including whether Ms. Liu is a suitable tenant. That's a word that's going to be really important in this process. And in fact, Cadillac Fairview's lawyer got up in court recently. And when the court was approving the three leases that Ms. Liu took over, asked specifically for the judge not to make any statement in his reasoning for that approval

that judged her suitability. Because you can tell that essentially those landlords are most likely planning to raise her suitability as a reason the court should consider not granting those other 25 leases. So part of the reason we wanted to talk to you about all this is that Ruby, she's this bombastic figure. She wants to create her own big department stores in these places where Canada's biggest, most iconic brand

arguably failed. And this is a time where a lot of stores like these are closing. So we have this corporate intrigue. We have this human conflict. The courts are involved. Susan, what does the standoff say about this particular moment in Canadian retail and business? Yeah, and you are right that she's quite a character.

I mean, she's been very vocal on the Chinese social media app Red Note about her plans for the Bay. In fact, she wanted to do more than just acquire these leases. She told me that she had bid also on the intellectual property of the Bay. She wanted that name. She wanted that heritage. Canadian Tire's bid beat her out. But had she won that, she may have opened what she was calling for a little while the new Bay

and tried to basically revive the department store under her vision. So this is really, you're right, a really dramatic situation with a lot of tension and a lot of questions about the credibility of this person who wants to take over these major spaces. In terms of what this says about where we are right now, you could argue that we're really in a moment,

certainly Canadian department stores have failed before. We saw the death of Eaton's. We've seen the death of Simpson's. Sears Canada went down the tubes. Target tried to come here and failed. There are a number of large format department stores that just have not worked in Canada and have been fading over the years. And that's a trend that's happening across North America.

Department stores are struggling, but the death of Hudson's Bay really feels like something different, really feels like a moment when this model is really retreating into the background. The counterpoint to that, of course, is that there is still an appetite for something like this. The Bay was not run well for many, many years as it was failing. But you have seen examples where department stores

have been able to flourish. Quebec-based Simons, La Maison Simons, the department store has been succeeding, at least to the extent that it is building new locations. Now, Simons is a much smaller company. And they also, crucially, make more of their own private label products. So they control more of the design and manufacturing of their products.

So not a directly comparable business, but still something very much like a department store, which is succeeding in Canada. And it's really a question of whether the department store is dead, or whether it's just these dusty, old fashioned department stores that stopped being run and managed well and invested in that

are what are falling by the wayside. And what does it say to you that someone trying to revive this big department store, this legacy model is being blocked and is facing such opposition? Well, it really gets to the heart of just how credible this plan is that it's facing so much pushback. Ms. Liu has said that what she wants to build will feel like a department store, but for the future. She wants to include experiences.

She wants to host events. She wants dining options in the spaces. She wants these department stores to be a kind of a gathering place. All of it sounds really interesting and good, but whether she actually has the know-how to pull it off and make it successful is the open question. Ms. Liu says she does. The landlords say there's absolutely no way. And at some point this is headed for the courts.

It'll be interesting to see how this plays out. So thanks for joining us, Susan. Thank you. That was Susan Krishinski-Robertson, The Globe's Retailing Reporter. That's it for today. I'm Adrian Lee. Our producers are Madeleine White, Michal Stein, and Ali Graham. David Crosby edits the show. Adrian Chung is our senior producer, and Angela Pacenza is our executive editor. Thanks for listening.