Ruby Liu will face several hurdles as she attempts to move swiftly and revise the legacy of the Hudson’s Bay Company and many of its former department stores, say retail industry experts.

Liu, chairwoman of Vancouver-based Central Walk and the owner of three major malls in B.C., has acquired the right to assume select leases of former Bay and Saks-branded stores in Alberta, B.C., and Ontario. Her goal is to launch a refreshed department-store chain—but without complete control the historic company’s real estate assets, the challenge begins with securing landlord approval for each location. According to the experts, there is no guarantee that she will succeed in that quest.

“There is a lot of research, a lot of planning, a lot of capital, a lot of logistical challenges, inventory, branding and people that need to be figured out,” Jenna Jacobson, the Eaton Chair in Retailing at Toronto Metropolitan University, told CP.

Don Gregor, executive vice-president at Aurora Realty Consultants, warned that Liu will be negotiating with landlords who may not be eager to work with a preselected tenant.

“[Landlords] would have loved if HBC had gone bankrupt and hadn’t just fallen apart totally and they just get the space back,” he said in an interview with CP, referring to the fact that the 355-year-old firm’s business is winding down. “Now, there’s going to be a negotiation, like a dance between the two parties.”

Many of the leases Liu is targeting date back decades and include restrictive clauses and low rents. Gregor estimates costs of $100 to $150 per square foot to reposition stores that are several hundred thousand square feet in size. Repairs to neglected systems—such as HVAC and escalators—could add hundreds of thousands dollars in additional expenses.

“In some ways, she makes it easier for them to not have to be worrying about how they’re going to fill that large square footage,” retail strategist Lisa Hutcheson told CP, adding that landlords may be more willing to strike a deal if Liu is prepared to shoulder deferred maintenance.

Liu is attempting to build trust with former Hudson’s Bay vendors and staff, promising to give them priority in her new venture.

Despite the steep learning curve, Jacobson believes Liu could modernize the Canadian department store model by drawing inspiration from overseas retail experiences.

“If you look at the Chinese department stores, they often act like more of a destination in and of themselves … which is going to be needed in order to have a successful model moving forward,” Hutcheson told her interviewer.

Meanwhile, in major a development Tuesday tied to the Bay’s ongoing insolvency proceedings, an Ontario judge approved Canadian Tire Corporation’s $30-million purchase of the company’s trademarks, including the Hudson’s Bay name, coat of arms, stripes, and brands.

Justice Peter Osborne described the deal as “the best possible outcome given the circumstances,” according to CP.

At the same hearing, he approved RioCan REIT’s application to push a receivership application for a joint real estate venture involving the Bay into receivership and issued a declaration allowing the company’s 9,364 terminated employees to apply for compensation under the Wage Earner Protection Program Act.

CP reported that Osborne called the full closure of the company’s 96 Bay and Saks stores “a milestone, albeit an unhappy one” and “the end of an era.”

Photo: Sign on the Bay’s former store in downtown Toronto.