Deadline Looms for Hudson's Bay Insiders: Time to Declare Asset Interests

TORONTO — Those with inside knowledge at Hudson’s Bay, such as its top executive Richard Baker, must express their interest in acquiring some of the struggling firm's assets or leases by the deadline on Monday evening.

Two parallel efforts aimed at gauging interest in the company’s tangible and intangible assets compel the parent corporation of the department store, along with its affiliates and top executives, to disclose their intentions regarding potential investments in the enterprise or acquiring what remains of its valuable holdings.

All aspects of the business, including leases, the rights to the company’s renowned Stripes brand, and even its art collection might be included, although neither the firm nor its legal documents have specified exactly what assets are being considered.

The Hudson's Bay Company chose not to comment on whether it or its subsidiaries, including executive chairman Baker, intends to pursue any of these assets.

Should they decide to submit an offer for the leases, both Alvarez & Marsal — a third party chosen by the court to oversee Hudson’s Bay Company during creditor protection proceedings — and real estate brokerage firm Oberfeld Snowcap Inc., would need to be informed. However, neither entity responded when asked about receiving notice regarding such a potential bid.

If the insiders seek additional assets, Alvarez & Marsal along with Reflect Advisors, which acts as Hudson’s Bay’s financial advisor, should be informed. In an email, Adam Zalev, who serves as the managing director at Reflect, stated, “currently, we find it inappropriate to offer comments to the press.”

Generally, individuals within organizations undergoing creditor protection tend to submit offers for company assets as they have the opportunity to acquire them at significantly reduced prices, noted Dina Kovacevic, who edits the Insolvency Insider newsletter.

"It’s a method to acquire the assets at a price lower than their value outside of an insolvency proceeding, particularly allowing the company to shed its debts," she explained.

A proposal from Baker, who has previously stated to the press that he intends to lead the company till his last breath, might prolong his leadership tenure. This period started back in 2008 when his firm, National Realty and Development Corp., acquired Hudson’s Bay Company from the heirs of the late South Carolina entrepreneur Jerry Zucker for $1.1 billion.

Some experts like Joanne McNeish, an associate professor at Toronto Metropolitan University specializing in marketing, have characterized Baker's Hudson's Bay acquisition as "the point at which the company began its slow death."

"investment companies operate similar to property renovators... a property renovator seldom addresses the fundamental business concerns," she stated via email in mid-March.

Under Baker, the company went public in 2012 and then private through a takeover bid that had to be boosted twice to earn shareholder approval in the weeks before Canada was hit with COVID-19 pandemic lockdowns.

Shareholders were difficult to appease in part because Baker presided over HBC while its stock was dropping — but many thought the company could use its vast real estate to turn things around.

Baker sold off much of the real estate and last summer, purchased rival Neiman Marcus and its Bergdorf Goodman for US$2.65 billion. He combined the luxury department stores with the Saks Fifth Avenue and Saks Off 5th chains he already owned in a new entity called Saks Global, effectively setting the stage for Hudson's Bay's creditor protection case.

Liza Amlani, a co-founder of Retail Strategy Group, argues that the assets possessed by Hudson's Bay hold significant appeal for numerous investors and enterprises due to their substantial inherent worth. These assets might also be available at lower costs owing to the company’s current financially troubled condition.

The intellectual property along with the devoted customer base could serve as a significant revenue source for a prospective purchaser who makes strategic investments in these areas," she stated via email. She mentioned leases, the Stripes label, the home goods brand Gluckstein, and the discounted retailer Zellers as possible acquisitions.

As the countdown continues for Bay affiliates to express their interest in acquiring assets, those unconnected with the struggling department store have additional time.

Hudson's Bay and its affiliates have to express their interest in making investments or bids well before others to ensure the sales processes are fair and don't favour insiders.

Before these parties state that they will not participate in bidding, the court instructed Alvarez & Marsal, Oberfeld Snowcap, and Reflect Advisors to “restrict the dissemination of information” to them “to guarantee and uphold the impartiality” of the sale procedures.

After those from outside who wish to purchase Hudson's Bay assets express their interest, they will be required to sign confidentiality agreements in order to obtain financial data that would assist them in determining whether they should proceed with a potential deal.

Kovacevic mentioned that landlords frequently participate in these bidding processes to reclaim full authority over who occupies their empty units.

Any individual inside or outside the company who is interested has until April 30 to submit a binding offer for the Bay’s assets. For lease bids, the deadline is May 1. Each submission requires an accompanying non-refundable deposit equaling 10 percent of the total purchase amount.

The assessments of the bids will be conducted by Hudson's Bay, Alvarez & Marsal, Oberfeld Snowcap, and Reflect Advisors, who will determine which offer is most appealing for acquisition. If multiple parties express interest, they might opt to hold an asset auction instead.

The court needs to authorize all sales. Throughout the entire asset sale procedure, this authorization should be requested by May 30th at the latest. Any leases that do not receive bids or are canceled must be rejected by July 15th.

This report by The Canadian Press was first published April 6, 2025.

Tara Deschamps, The Canadian Press

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