As Hudson’s Bay Co. restructures through the creditor protection process, a retail expert is calling Canada’s oldest company’s struggle “very sad to see,” with little hope for long-term survival.
E3 Consulting retail executive, Rocco Matteo, joined Global News Morning in Montreal on Wednesday and said he believes this is the beginning of the end for the iconic 355-year-old brand.
“Department stores are a thing of the past. People are not shopping there anymore,” he told Global’s Laura Casella. “A lot of retailers have replaced the Bay and have taken away their market share. And it’s such a costly investment to turn this big ship around. And they’ve tried.”
The restructuring process for the company, which dates back to 1670, began Friday after it filed for creditor protection to avoid bankruptcy.
In a statement, the company said it has been facing significant pressures, including subdued consumer spending, trade tensions between the U.S. and Canada and post-pandemic declines in downtown store traffic.
The retail chain’s president and CEO, Liz Rodbell, called it a “very difficult but necessary” step in the March 7 press release.
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Hudson’s Bay said it was exploring several strategic options to strengthen its business and said it would not make promises but was committed to preserving jobs where possible.
Missed chance to ‘target the new market’
Matteo says he believes the Bay will do its restructuring to salvage short-term business, but in the long run, department stores will need to aggressively reinvent themselves to survive.
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He says shoppers flock to specialty retailers for their needs, and that Hudson’s Bay has never “created a concept or a destination for the younger generation.”
“It has never taken the time to reinvent itself and really target the new market. They kind of missed that boat completely. They haven’t taken the opportunity to bring (those shoppers) back.”
He added that it will be difficult for the company to tackle the over $300-million debt it has accumulated in the last year. “It’s significant.”
The company’s footprint spans 80 Hudson’s Bay locations that sell everything from apparel and housewares to cosmetics and furniture.
Through a licensing agreement, it also owns three Saks Fifth Avenue stores and 13 Saks Off 5th locations in Canada, which will continue to operate.
Saks Global, which owns U.S. Saks locations as well as Neiman Marcus and Bergdorf Goodman stores, is not connected to the creditor protection filing.
–with files from The Canadian Press
