B.C. billionaire Ruby Liu has divulged a three-tiered plan for opening new department stores in former Hudson’s Bay Company spaces if her proposed purchase of 25 remaining leases is approved.

Liu told CBC that, under the first tier, she plans to open “normal stores,” that do not require much renovation three months after the proposed lease sale closes. Second-tier stores in spaces that require more up upgrades would commence operating six to-eight months after the proposed deal is finalized.

The third tier, featuring “more innovative ideas, high technology, maybe some [virtual reality] and some exciting new shopping elements” would take an unspecified amount of time to complete.

“And, we’ll have fine dining, we’ll have entertainment, we’ll have a kids’ play area,” she told her interviewer. “However, everything will be decided under the condition of getting the landlords’ approval and support.”

Liu wants to acquire 28 Hudson’s Bay Company leases altogether in B.C., Alberta and Ontario as part of her plan to launch a new department-store chain bearing the name Ruby Liu.

She has already secured three leases covering former Bay locations at malls that she owns in Tsawwassen, B.C.; Victoria, B.C.; and Nanaimo, B.C. But landlords will likely have to approve her deal with the Hudson’s Bay Company to purchase the remaining 25 leases.

As the Bay proceeds through the creditor-protection process, Liu faces opposition from 23 of the 25 landlords at malls where she is seeking to acquire leases, according to court-appointed monitor Alvarez & Marsal. The 23 landlords have served notice that they will not approve the leases and will oppose court action forcing their sale to Liu.

The landlords contend that Liu lacks the experience and expertise to run a large chain like the one she is proposing. They have also asserted that she has failed to provide sufficient details on her plans and her financial projections are unrealistic.

She has contended that the landlords want to block the sales in order to reclaim the leases and control of the spaces. Originally signed by the Bay decades ago, the long-term deals contain highly favourable terms and renewal options with rental rates well below modern values.

Many tenants in malls containing former Bay stores are paying much higher rents, commercial real estate experts previously told Connect. If they reclaim the leases, the opposing landlords could also redevelop the spaces as mixed-use assets similar to ones being developed at many aging malls across Canada.

Liu has pledged to provide landlords with more details on her plans.

“With their support and approval, we will have better, detailed, business plans,” she told CBC.

“When the cake is bigger, we’re going to cut half, and we’re going to share it with our landlords.” 

Primaris REIT has confirmed that she bid on the former Bay space in the Conestoga Mall in Kitchener, Ont. That is the only known lease outside B.C. that Liu is seeking to acquire.

Primaris, which owns the mall, has not indicated whether it will accept or reject Liu’s proposed move-in.

Pictured: The since-closed Hudson’s Bay Company store at Conestoga Mall in Kitchener, Ont.

Photo: Shutterstock