Mall proprietor in British Columbia seeks acquisition of 25 Hudson's Bay leaseholds; encountered resistance from property landlords, according to documents.
Fresh Take:
Hiccup in Hudson's Bay's Lease Deal:
Landlords are throwing a wrench in B.C. entrepreneur Ruby Liu's modern department store vision, as court filings reveal. Over two dozen property owners, who collectively own leases Liu intends to purchase, are vehemently against her takeover.
Alvarez & Marsal Canada Inc., the court-appointed monitor overseeing Hudson's Bay during credit protection, disclosed in a recent filing that these landlords won't budge on approving the plan. They even vowed to nix any future forced assignments from the Bay.
Both the Bay and Liu have remained mum on the matter, while Liu's ambitious plan involves opening a chain of department stores under her name. These stores would cater to fashion, accessory, and cosmetic needs, while offering play areas for kids, dining options, and entertainment zones.
However, it remains uncertain whether the leases even permit such activities. If not, landlords would need to agree to amendments for Liu to move forward with her vision.
The legal hurdles are mounting, as Hudson's Bay aims to secure court approval for the deal on Monday. Yet, the broader 25-lease agreement is still in the works due to the landlords' resistance. Initially, court documents hinted at landlord concerns but withheld specifics.
Incorporating the enrichment insights, landlord reluctance can be attributed to Hudson's Bay's precarious financial condition, characterized by filing for creditor protection and liquidating numerous stores. Additionally, the transaction's complexity and uncertainties surrounding lease terms and future rental conditions may be dampening landlord enthusiasm.
In addition to the Liu deal, other lease transactions are taking place behind the scenes, as per Alvarez & Marsal's filing. A party is eyeing up to eight leases in various provinces, while a deal with an anonymous landowner for a lease valued at $250,000 is close to being sealed.
Despite these attempts, one agreement has fallen through due to a purchaser refusing to rectify contractual errors.
The push to offload leases comes shortly after Hudson's Bay, Canada's oldest company, filed for creditor protection in March. The retail scene was exceptionally tough for the Bay, leading to the sale of its name and trademarks to Canadian Tire Corp. Ltd. for $30 million and the closure of all stores by the end of May.
According to Alvarez & Marsal, the sale of inventory raked in $349.3 million for the Bay. Around $104 million came from consignment goods, $43.9 million from additional products through a consultant agreement, and $12.7 million from furniture, fixtures, and equipment. Despite exceeding expectations, the sales were somewhat offset by higher than anticipated gift card redemptions and lowered demand for furniture and equipment.
This report, authored by Tara Deschamps for The Canadian Press, was first published June 19, 2025.
- The landlords' resistance to the lease deal with Ruby Liu could potentially impact the entertainment and business sectors, as Liu's vision includes entertainment zones in her department stores.
- The precarious financial condition of the entertainment and finance industry within the retail business, as demonstrated by Hudson's Bay's filing for creditor protection and subsequent lease transactions, may influence future investment and deal-making within the industry.