Hudson’s Bay Liquidation and Lessons From it’s Business Model

Death By 1,000 Cuts: Taylors Hudson’s Bay’s Version.

 The bay is out of money! $3M cash on hand vs $1B in debt. A real piece of Canadian history down the drain. But what went wrong?

Hudson’s Bay Company (HBC) aka The Bay is an example of a company that failed to evolve, failed to launch a strategy to keep up with newer consumers shopping online and basically just bad housekeeping for a business it’s size. Perhaps there was no motivation to evolve. The buy Canadian movement would agree on giving The Bay a hard pass.

Hudson’s Bay History with Timelines

I’ll catch you up on the timeline oh how HBC ownership has been tossed between Canada and the Americans like a ping pong ball:

• 1670: Hudson’s Bay (HBC) was incorporated by English Royal Charter in London, England (Canada was still under the Brits).

• 2006:  American Jerry Zucker bought HBC for US$1.1B

• 2008: Jerry Zucker sold HBC to NRDC Equity Partners.

  • Through to 2012, HBC was run through a holding company of NRDC, Hudson’s Bay Trading Company (HBTC).

  • HBTC was dissolved in early 2012. US & Canadian offices became independent with headquarters in Manhattan, NY and Toronto.

• 2019: HBC’s European operations were spanned off.

• 2019: HBC was listed on the Toronto Stock Exchange (TSE) under HBC.TO.

• 2020: American Richard Baker & others took HBC private in March 2020.

• 2025: HBC departs from newly formed Saks Global & begins preparing for creditor protection filing.

  • CFO Jennifer Bewly stated that they were days from not being able to meet payroll.

• 2025, March, 14th: HBC announced it’ll be closing & liquidating all the locations, 355 years since incorporation in 1670.

What Caused Hudson’s Bays downfall?

Failure to adapt to changing consumer preferences

Hudson’s Bay did not evolve as the customer was evolving to digital-first shopping experience.  Agile online retailers like Amazon have reshaped the retail industry, leaving traditional brick-and-mortar stores struggling to maintain foot traffic.

Hudson's Bay, despite its legacy, did not invest early enough in its digital transformation. By the time it ramped up its e-commerce strategy, it was already too late to catch up with more tech-savvy competitors. For small businesses, the lesson is clear: prioritize innovation and flexibility to meet evolving customer expectations.

Over-Expansion and Expensive Real Estate Holdings

Hudson's Bay strategy led to opting for large physical locations in prime real estate areas led to high operating costs, even as revenues from physical retail declined. Expensive long-term leases, property taxes, and store maintenance only exacerbated the issue.

Hudson's Bay’s retail empire grew vast, with multiple department stores across Canada and the U.S. While this helped the brand establish a dominant market presence in earlier decades, the overhead costs became unsustainable over time.

Blame it on Covid

Covid lockdown and store closures aftermath – all brick-and-mortar stores ‘s balance sheet has faced the challenges so this challenge is not unique to The Bay.

Acquisition strategic redirection?

Saks Global strategy seemed to be less focused on Canadian operations. Perhaps in favor of HBC Properties and Investments?

If you’ve been to The Bay the last year or so, you’d see there was no appetite to invest in the stores – broken escalators, weird store hours, scanty number of store associates, no AC in the summer, etc.

Lack of Clear Brand Identity

Luxury Brand or Budget Brand or Mid-budget brand? The Bay scambled to attract shoppers from all ends of the budget spectrum. From Saks to Chanel to Zeller to Forever 21!

Once known as a luxury department store, the brand lost its identity over the years by trying to cater to both high-end and mid-tier consumers. This lack of focus diluted the brand’s image, leaving customers confused about what Hudson's Bay stood for.

In contrast, companies like Nordstrom and Winners have been able to carve out distinct positions in the market, offering value propositions that resonate with specific customer segments. The lesson here is simple: companies need a strong, clear brand identity. Trying to appeal to everyone often results in appealing to no one.

Poor Financial Management

No cash flow, no business: $3M cash on hand vs $1B in debt. A question to the Hudson’s Bay CFO, Jennifer Bewly, is How did we get here? Did we not see it coming (hello cash flow forecasting! ) or were hands tied? Just like you, I have so many questions!

Lessons Other Businesses Can Learn from Hudson’s Bay Failure

Adapt or Perish

The world of business is ever-changing, and Hudson’s Bay’s story reminds us that no company is immune to disruption. As a fractional CFO, I see firsthand how businesses that fail to innovate and adapt quickly can face dire consequences. Be it new technology, shifts in consumer behavior, or broader economic changes, businesses must always be ready to pivot.

Strong Financial Oversight

Hudson’s Bay’s downfall can be partially attributed to poor financial oversight. Businesses must ensure that they have strong financial management practices in place. This includes regularly reviewing financial statements, maintaining healthy cash reserves, and working with professionals—such as fractional CFOs—who can provide strategic financial guidance.

Fractional CFOs can help businesses maintain financial discipline without the high cost of a full-time CFO. They can bring an objective perspective to financial decisions and assist with everything from forecasting to risk management, helping businesses avoid the pitfalls that led to Hudson's Bay's demise.

Cost Control is Key

Monitoring fixed and variable costs, adjusting operations to market trends, and knowing when to downsize or pivot is essential.

For any business, maintaining tight control over costs, particularly in uncertain economic times, is crucial. Cutting unnecessary expenses, renegotiating leases, or even moving to a more flexible, remote-work model can help improve financial resilience.

No cash flow, no business

By March 2025, Hudson’s Bay has only $3M cash on hand vs $1B in debt, cleary the math is not mathing here.

As a business owner, cash flow forecasting and monitoring is key to your business longevity. There’s no much to say here.

Did this catch Hudson’s Bay’s Management By Surprise?

I don’t believe the above disruption in business conditions caught HBC management like the proverbial deer in the headlights.

I don’t believe the problem was inability to take actions but most likely the inability to take appropriate action. Call it managerial stubbornness or failure by design?

 Hudson’s Bay death has been that by 1,000 cuts (insert Taylor Swift’s voice). The writing was on the wall for a while.

Financial struggles, operational failures, debt re-re-restructuring, too many structural issues that can’t be solved overnight.

Will The Bay get past this?