A mix of bidders will likely take over the remains of Hudson’s Bay Company (HBC) following its court-supervised liquidation, according to a leading retail analyst.

David Ian Gray, principal of DIG360 Consulting, told Business in Vancouver that HBC’s decline was the result of its failure to adapt to changing retail dynamics, and that no single buyer is likely to acquire the company’s full suite of assets.

“My guess would be that what we see in June, on the other side of this, is a division of assets going in different directions,” Gray said in the interview with BIV. “It’s not my belief that one buyer is going to absorb all of the Hudson’s Bay Company, and I couldn’t justify why anyone would make that particular bid.”

According to reports, B.C. billionaire mall owner Weihong Liu placed a binding bid with a 10% for 25 HBC store leases before the April 30 deadline. Other reported bidders include Toronto’s Urbana Corp. and an undisclosed offer from Canadian Tire.

Gray believes that, even if HBC’s intellectual property is preserved, the department-store model is outdated and would require significant reinvention.

“There’s more financially at stake than simply winning the bid to then take over ownership of that portion of the business,” he told BIV. “That is one major hurdle, but the next hurdle is to succeed with that. That’s going to take a lot of working capital to kind of refresh everything.”

Gray emphasized that HBC failed to innovate after losing key advantages from suburban expansion, exclusive brand partnerships, and a lack of competition in earlier decades. The rise of specialty retailers and e-commerce only worsened the company’s position, according to the analyst.

“By the end of the ’80s, there wasn’t a lot of new growth, and so now they’re left managing what they’ve built, and they weren’t entrepreneurial,” Gray told BIV. “Anything they were innovating wasn’t really an innovation, it was just trying to play with what they already [had.].

“And so, I think the writing was on the wall. For me, it was always a question of when, not if.”

Court-appointed monitor Alvarez & Marsal is co-ordinating HBC’s advance through the creditor-protection. All stores are no in the process of liquidating and closing.

Pictured: Sign on a Hudson’s Bay store in Toronto.

Photo: ACHPF / Shutterstock.com

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