After nearly making it four centuries and being the world’s oldest corporation, Hudson’s Bay Company is shutting its doors.
The business was founded in 1670, 355 years ago, and its closure is more than just a corporation going out of business; it’s the extinction of a massive living artifact of North American history that once shaped Canada’s economy, geography, and identity.
The closure was driven by the company being nearly $1 billion in debt and failing restructuring attempts. Nearly 10,000 employees will be let go, and any remaining stores will be quickly liquidated, even its iconic downtown Toronto flagship store.
A Legacy
HBC started as a fur trading monopoly that controlled huge parts of what would become Canada. They changed from trading beaver pelts for striped wool blankets to having over 200 department stores across the country in their prime, including iconic locations like Hudson’s Bay, Saks Fifth Avenue, and Saks Off 5th.
The influence that HBC had was far more than just commerce, but also on settlement patterns and the development of Canadian infrastructure.
The company outlasted countless wars, the fall of empires, and revolutions, showing its remarkable longevity in an ever-changing world, all up until now.
Downfall
There have been relentless pressures not just for HBC but for many companies in the retail sector. Factors like e-commerce disruption, pandemic aftershocks, inflation, and trade tensions between nations have all had a substantial effect on businesses.
Traditional department store shopping was the company’s bread and butter, but now times have changed, with many customers shifting to the internet space of online shopping.
HBC tried its best to adapt and rebound through store closures and partnerships and modernize through digital investments, but all of this was too little and too late. Nostalgia is a strange commodity in the modern era, and wasn’t enough to keep the company alive.
Debt
The biggest factor behind the downfall of HBC was a financial one. The company owes nearly $1 billion to around 2,000 creditors. It even owes money to global brands and Canadian institutions, making its payback list large.
The company used a few million dollars on hand to try to restructure the company, but these efforts were undermined by the enormous pressure of owing $950 million in outstanding debts, which contributed significantly to mortgages.
Store closures and selling off property were not enough to generate capital, forcing HBC into creditor protection and liquidation.
The Impact On People
With the company closing its doors, nearly 10,000 employees are being let go effective immediately. Many of these employees may never see full severance as unsecured creditors in bankruptcy.
Others will also be affected, such as malls that rely on the rent from HBC stores, which will now be liquidated.
Beyond just the stores themselves disappearing and thousands of people being out of jobs, the lose of the company is the loss of a piece of the Canadian identity, where around 12 generations came and went while the company was around, and now the next generation won’t know what HBC is, breaking the cycle.
Couldn’t Come Back
While the downfall of HBC is brutal and will be painful for many people, the company has been declining for a long time. There were warning signs, with outdated stores, poor customer experiences, and no or late innovation.
HBC was merely working on borrowed time, and their days were numbered as soon as they fell behind other stores.
Prolonging their closure would have wasted more resources and put them further into debt. The market is unforgiving, and HBC’s fall may make way for more agile businesses in their wake.
What This Means For Retail
HBC’s closing could accelerate the transformation of Canadian retail. With 355 vacant gaps in the retail sector, people will scramble to grab prime real estate and fill the void, most likely leading to mixed-use developments or experiential tenants.
Retail businesses that were HBC’s biggest rivals may see a surge in new customers who were once loyal to the generational giant.
These will only be short-lived, however, as people spread out and become part of the usual customer base. Malls will be hit hard by a sudden absence of tenants, leading to a loss of revenue.
Other Effects
With the legacy that HBC had, it wouldn’t be surprising if Canada puts new policies into effect to protect their image in the future by protecting “legacy” Canadian businesses that have a cultural impact on the country.
A new debate about foreign investment could come out of this, and what kind of role it can have in Canadian retail, especially when such a large workforce that contributed to the economy has now been displaced.
HBC’s closure could be a catalyst for change that no other business closure has ever had in Canada.
Corporate Heritage
With HBC’s oldest artifacts, such as 17th-century ledgers to iconic blankets, being all auctioned off, questions may be raised about the preservation of corporate heritage.
Many of HBC’s locations will most likely be sold off to new businesses or rented to new tenants, but many may not be similar stores. HBC’s prime locations may become data centers, urban housing, or digital showrooms.
While it is the end for HBC, a nearly four-century-old business, the door is also opening for new companies that could last an equal amount of time and contribute to the identity of Canada. It is time for a new business to step in and take that opportunity.
A Goodbye
Hudson’s Bay Company’s closing its doors is a lesson in the dangers of inertia and how retailers need to adapt quickly to a changing consumer base.
It will hold the record for the longest-running business in Canada and may even be kept in the minds of the oldest living generation that has nostalgia for its stores.
The closure is a blow to Canadian heritage, but it showcases the cost of clinging to legacy at the expense of innovation. As Canada’s oldest company slowly fades out, others will take its place and reinvent rather than reminisce.
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