HALIFAX — Retail experts say the looming demise of Hudson’s Bay Co. as a national presence would be a “historic loss” but not surprising, given the retailer’s inability to draw customers into stores.
“The Bay in particular … really struggled to adjust to changes in consumer shopping habits, preferences and the demand for goods,” Jamie Hyodo, an assistant professor of consumer behaviour at Western University, said in a recent interview.
Founded as a fur-trading company in 1670, Hudson’s Bay’s modern heyday was in the 20th century when the store served as a one-stop shop for Canadians looking for quality clothing, cosmetics and home wares, Hyodo said.
But as the retail landscape changed — discount retailers started to become more prevalent in the 1960s and '70s and luxury brands opened stand-alone stores where they could sell directly to consumers without a department store as the middleman — it meant Hudson’s Bay “lost both the low end and upper end of their clientele,” Hyodo said.
“We also saw the rise of category-specific retailers that are still very successful today, organizations and brands like Best Buy and Home Depot that just dominate an entire product category,” Hyodo said.
"The breadth and depth of product they offer within that category can’t really be matched."
Hudson’s Bay financial struggles came to a boiling point on March 7 when it filed for creditor protection. The retailer attributed its challenges to subdued consumer spending, Canada-U.S. trade tensions and post-pandemic drops in downtown store traffic.
On Friday, the company was granted permission to liquidate all but six of its 80 Hudson's Bay stores as well as three Saks Fifth Avenue stores and 13 Saks Off 5th locations in Canada that it owns through a licensing agreement.
It's not the first time Canada has seen a major department store struggle.
Eaton's shuttered in 2002, Sears Canada stores closed in 2018 and American retail giant Nordstrom left Canada in 2023.
Despite the current affinity for the Hudson's Bay brand — as seen with customers dashing to stores this week in a scramble for its iconic striped products — the retailer is plagued by being too big of an operation that has failed to adapt to customer demand for online shopping and experiential stores, experts say.
Lisa Hutcheson, managing partner at J.C. Williams Group, said Hudson's Bay has had "no real clear strategy" over the last 10 years or so.
"Customers want to shop in physical stores, and want pretty stores, they want experiential stores, and there wasn't a compelling reason to come into a Hudson's Bay store anymore," she said in an interview.
As an example of brick-and-mortar retailers getting it right, she pointed to Aritzia and beauty behemoth Sephora. Both have offerings similar to the The Bay's but offer shoppers interesting in-store experiences.
"They know their customers very well," she said, noting window displays and coffee shops in some Aritzia locations draw in customers while Sephora's range of selection and service makes going into a department store "redundant."
TJX Companies stores also stand out in Canada, with Hutcheson attributing their success to smaller store sizes that require less staff and cater more to the average consumer who is concerned about getting value for their dollar than shopping in an upscale environment.
“The consumer has got budget issues and ... (is) very thrifty and mindful of their disposable incomes, so they would migrate to a Winners or a Marshalls," Hutcheson said.
Even if Hudson's Bay wanted to cater more to budget-conscious shoppers before its troubles, it may have been too late, Hyodo said.
Hyodo said attempts to pivot to a more sustainable business model should have happened “decades ago” by narrowing down its inventory range, decreasing store sizes and better targeting customers.
“It’s very difficult to have a value offering that is appreciated by everyone because then you’re not the most appreciated by anyone,” Hyodo said.
Experts also noted Hudson's Bay struggled to adapt to a retail landscape where customers were flocking to online shopping.
Hyodo said the retailer was a late mover with their digital strategy compared with others, and lost out on the opportunity to build a clientele that was drawn to their brand but didn't have time to shop in person.
"By the time they recognized this was the way all retailers were shifting, they had lost out," he said.
Diane Brisebois, president and CEO of the Retail Council of Canada, said that although shortly before the pandemic Hudson’s Bay tried to cater more to a generation of younger shoppers that bought online, it didn’t help that the company’s primary market for a long time was an older demographic.
“It wasn’t obvious that people would just jump online,” she said in an interview.
Brisebois also noted their effort was tempered by COVID-19 lockdowns and an already competitive online market.
Hutcheson added the company lost sight of giving customers a positive in-store shopping experience while it pivoted to a less-than-ideal e-commerce model.
"It was confusing," she said.
The company's online platform wasn't well-integrated with its physical stores, didn't focus on the unique products the company offered and failed to fully mesh its online platform with store offerings like competing retailers did, she said.
"The customer doesn't think 'I'm going to shop only on my computer or in the store.' They want to be able to do it on the fly, integrated with social media," Hutcheson said.
"Other businesses came along and did that."
— With files from Tara Deschamps in Toronto.
This report by The Canadian Press was first published March 21, 2025.
Cassidy McMackon, The Canadian Press
