Analysis of what went wrong at Hudson's Bay

Donoreo

including a flawed rewards program,
poor online delivery system,
a disastrous online marketplace.
issues with store maintenance,
customer service,
mishandled credit card transition,

https://retail-insider.com/retail-insider/2025/03/can-hudsons-bay-survive-a-loyal-shopper-shares-insights/

g121

Donoreo
also consider that the old school standard department store concept maybe just doesn’t work today ..
in Canada:
-eatons - gone
-simpsons - gone
-sears - gone
-zellers - gone
-kresge/kmart - gone
-woolworth’s - gone
-towers - gone

urbanriot

Donoreo

Analysis of what went wrong at Hudson’s Bay

Easy. The bigges tthree issues were:

malfunctioning web site, slow to refresh at times
overpriced goods in-store when they weren’t on sale
confusing sales prices in the store

They use the same customer service department as Macy’s US and I found it to be ‘okay’ when I had issues with the web site, they were pretty good at helping me so I’m not sure why “customer service” is on that list.

Overall I liked Hudson Bay as an idea but they weren’t at the top of their game in the big areas. If they resolved their web site issues, had better prices on their goods, and made their sale prices more prominent in store they’d be in much better shape.

Thane_Bitter

Donoreo Would be easier to state what they did correctly (if anything). It’s too bad but with this much load on them I do not see a comeback and that is a shame. IMHO they had high costs because of their choice of retail locations and declining sales, increasingly limit stock, all the sales they had but often had nothing in many sizes, and so on. Also they used to have exceptional service, people that knew their stuff and offered wonderful assistance, that died off when the work became another mcjob.

Urban I agree with you, Sears had all the parts in place except a usable website until just before it died. With a mail order operation its not much different than amazon, it should have been able to keep going. One issue they had (and amazon has) was the returns, as I recall Sears started to issue a cost for returning an item to help curb those that would order loads of product and return all or most of it. Having a showroom with changing rooms should have helped with the issue of sizing as well as offer deals rather than selling lots off as amazon does. Even back when Amazon sold only books Sears would have great sale stuff, though selection was always constrained.

I don’t see a fix now, everyone loves online shopping though I find the selection of goods is getting smaller, and perhaps am of a generation that wants to see a product before he buys it in person. If a company offers direct sales that can be useful but being here in Canada even before “current day rapidly changing, illogical, idiotic bullshit that shall not be discussed” many companies only want to deal within their national confines.

urbanriot

g121

also consider that the old school standard department store concept maybe just doesn’t work today ..

It can work but they have to be at the top of their game to exist with so many online options. If they’re not agile and dynamically fine tuning how they operate, one small mistake and they’re toast.

I’d also argue that in addition to being on top of their game, that adding a web marketplace conjoined with that experience could elevate them further.

Sears could have been amazing but they failed to recognize that their old model needed an update. Imagine if Sears had pushed out an online storefront in addition to the catalogue? They could have beaten Amazon if they did the right thing at the right time. Unfortunately they clung to their old ways and disappeared.

WalterDnes

I vaguely remember HBC being involved in multiple lawsuits with their mall landlords in recent years. A quick Google search turns up Yorkdale Mall, and Square One in Toronto https://www.cbc.ca/news/canada/toronto/hbc-landlord-lawsuit-1.5779481 and Edmonton City Centre Mall https://edmontonjournal.com/news/edmonton-city-centre-mall-hudsons-bay-co-in-lawsuit-over-rent-covid-measures

px_eliezer_

urbanriot Sears could have been amazing but they failed to recognize that their old model needed an update. Imagine if Sears had pushed out an online storefront in addition to the catalogue? They could have beaten Amazon if they did the right thing at the right time. Unfortunately they clung to their old ways and disappeared.

Same with JC Penney in the US.

A lot of these stores probably thought that their long-time names would be enough, and nobody had a longer-term name than Hudson’s Bay…

urbanriot

Thane_Bitter

everyone loves online shopping

Every time I go to Hudson Bay in Square One is jammed full of people so there are more than enough people to keep the store going but if you look at the prices, they’re insane. It’s like shopping at a high end store.

Somewhat-Reticent

Thane_Bitter they had high costs because of their choice of retail locations

Locations good, but any firm that cannot control property “owners” is doomed.
( Property taxes can reveal ownership mentality. )

Thane_Bitter

urbanriot Yeah, considering they do sell Timex as a brand they should adjust their pricing.

urbanriot

px_eliezer_

long-time

The question needs to be asked, why is Walmart jammed with people while Zellars, K-Mart, etc., have gone out of business. Why is Walmart reporting profits while Hudson Bay is going out of business?

It doesn’t feel that complicated, the first obvious thought that should come to mind is that the Canadian dollar is worth less than toilet paper right now and people are broke, and as such people are looking for value which Hudson Bay doesn’t have.

But at the same time, Zellars was a value store that disappeared so what did they do wrong that Walmart did right? That’s not that complicated a question either, Walmart was bigger and better, they simply had more of the stuff that people wanted or needed. And then Walmart added groceries and decimated everyone else. Crazy thing, you could go buy milk, underwear, novels, and DVDs all at the same place!?

Sometimes I wonder if a lot of these companies disappear because that singular man that was successfully running the show or families running the operation sold to hedge fund companies but at the same time, the McDonalds’ brothers sold out ‘to the man’, Walmart hasn’t been run by Sam Walton in ages, and Amazon isn’t run by Bezos and they’re all flourishing so I guess it’s not that either.

… maybe it’s just bad management?

px_eliezer_

urbanriot maybe it’s just bad management?

That was the case when Target came to Canada, as you know.

There are so many factors though.

Also cycles that span decades.

In the USA for a long time, the king was Sears, then Sears was overtaken by K-Mart, then K-Mart was overtaken by Walmart (and in some areas by dollar stores).

One day Walmart will have their reckoning too, like in that Ozymandias poem.

From what I know, the re-birth attempt of Zellers failed due to many bad management decisions, and to the lack of a specific reason to go there as opposed to anywhere else (including online).

Donoreo

px_eliezer_ From what I know, the re-birth attempt of Zellers failed due to many bad management decisions, and to the lack of a specific reason to go there as opposed to anywhere else (including online).

They did not even do what could be called half-assed it, maybe ⅛? 🙂 They did not really try.

Donoreo

The Bay says they are liquidating everything, they could not make a financing deal. Story has details on what is happening next.

https://retail-insider.com/retail-insider/2025/03/hudsons-bay-faces-closure-as-liquidation-looms/

px_eliezer_

Donoreo

What a shame for so many people.

And as I think you had said, this was a long time coming, it cannot be blamed just on recent events.

Thane_Bitter

Donoreo One billion in debt, an insurmountable obstacle.
The end product of these private equity firms, acquire, pump, strip, load up with debt and then kill. Because the company was bought with loans from itself the PEF is not liable for any debts and moves on enriched for running it into the ground.

Hydraglass

Thane_Bitter obstacle.
The end product of these private equity firms, acquire, pump, strip, load up with debt and then kill. Because the company was bought with loans from itself the PEF is not liable for any debts and moves on enriched for running it into the ground.

Same modus operandi that killed Sears and Circuit City and almost did in Toys R Us here and did kill it in the US. Are they the root cause of the failure? Rarely - they don’t usually swoop in until there’s already a problem and possible failure looming in the distance - but do they accelerate the demise and make it almost impossible to turn the ship around and prevent the sinking - just about every time.

px_eliezer_

Hydraglass Same modus operandi that killed Sears and Circuit City and almost did in Toys R Us here and did kill it in the US. Are they the root cause of the failure? Rarely - they don’t usually swoop in until there’s already a problem and possible failure looming in the distance - but do they accelerate the demise and make it almost impossible to turn the ship around and prevent the sinking - just about every time.

It is a cliche but true, venture capitalists are too often vulture capitalists.

koira

I think the Bay ended up with too much focus on $$$ upscale fashion clothing, similar with household items ie your small appliances , dishes , decor too expensive to move the volume. Thats where walmart does well, they have all these same sort of goods except they are affordable lower price. Look at a pair of Levis at the Bay, 79$, 99$, go to walmart levis for 33$, same at costco. Are they the same thing i dunno, but the ones i buy at costco seem pretty good. Jeans used to be thicker cotton, now they are thinner with some flex built in. Bread toasters, the cheapest at the bay is 60$ and up to 349$. Walmart 29$ to 175$.
Then its the real estate, the bay i think the majority are in high rent malls vs walmart is positioned between some are in the malls and then some are in the big box type locations. Like square one has walmart and bay, do they pay the same rent most likely, does walmart move more product, you bet they do based on their product range. I think erin mills town center has both walmart and bay . Now that place is fairly close to sqare one. As far as walmart goes no problem, for the bay the two stores are too close to one another for what they sell the demographic isnt there to move enough volume.
Bottom line the bay has become too expensive for the average suburban consumer for all their department store needs.

urbanriot

koira

I think the Bay ended up with too much focus on $$$ upscale fashion clothing

I partially agree with this, more to the point on the “$$$” and not necessarily the “upscale fashion” sentiment because they didn’t sell what I’d consider upscale fashion, they sold all their clothes at unaffordable prices and didn’t tell anyone when they were on sale. Certainly above Walmart but like i wrote above, they were selling Polo Ralph Lauren cotton sweaters for the same price you could get a cashmere Polo Ralph Lauren sweater for the same price.

Connecting with Thane_Bitter’s post on private equity firms, it was like someone bought Hudson Bay Co. but didn’t care about it, they left it on autopilot and let it run itself into the ground.

KingB71

koira go to walmart levis for 33$

Don’t forget though, Walmart seriously squeeze their suppliers.
it was well known years ago that Levis refused to sell their jeans at Walmart as they couldn’t make any profit at what Walmart wanted to sell them at. Walmart then threatened to pull Dockers clothing from the shelves (owned by Levis). The end result was Levis moved production offshore and started offering cheaper jeans at Walmart that were only available there. They used to manufacture in Stoney Creek or somewhere around Hamilton, but that’s now all gone