'A long, slow, deepening decline': The company has withdrawn plans to open a store at the new Oakridge shopping centre, while its flagship downtown store has struggled to keep elevators and escalators working
Author of the article:Joanne Lee-Young
Published Dec 22, 2024
On a recent weekday afternoon, Christmas music gently played in the background of Hudson’s Bay’s downtown Vancouver flagship store, which was adorned with festive decorations and a few holiday-themed window displays.
But two out of four elevators, and multiple escalators, were out of service and lineups at cash registers were non-existent.
It’s been a tough year for many HBC stores across the country with some closing and others struggling to keep up with repairs.
And retail analysts are predicting 2025 likely won’t be any better.
Recently, Hudson’s Bay officially withdrew its plans to have a new store at the Oakridge Park shopping centre under construction in Vancouver. It had been slated as an anchor tenant in a 140,000-sq.-ft. space.
“HBC continuously looks at opportunities to optimize its real estate portfolio on a market by market basis,” the company told trade publication Retail Insider. “We have recently completed an agreement with QuadReal Properties for our location at Oakridge Park and will not open within that redevelopment.”
The company said it would instead focus on its presence in downtown Vancouver.
However, Vancouver-based retail analyst David Ian Gray, who has been following Hudson’s Bay’s troubles, doesn’t believe that giving up on Oakridge means Hudson’s Bay will be reinvesting any time soon in the downtown Vancouver location.
He thinks, instead, that Hudson’s Bay’s parent company is focused on completely different ventures elsewhere.
In July 2024, HBC LP announced a major new corporate direction known as Saks Global, which aims to acquire luxury brands and major U.S. real estate assets, but leaves out Hudson’s Bay and its Canadian locations.
The deal to create Saks Global included buying luxury department store chain Neiman Marcus, which went bankrupt in 2020, for US$2.65 billion and was backed by investment from online retailer Amazon, software company Salesforce and others with the goal of reaching affluent shoppers buying luxury products online.
“The Bay, sadly, is in a long, slow, deepening decline,” Gray said. He said the existing store in downtown Vancouver is being viewed as real estate to be sold.
“They are not now seeking new locations. They are not reinvesting much at this point, rather they are focusing on their Neiman Marcus acquisition and the integration with Saks. There has been significant senior-level (management) turnover in the midst of all this.”
The department store segment within the retail industry has been in decline for awhile, as it’s not reflective of how newer generations shop, said Bruce Winder, a Toronto-based retail analyst, in an email.
He agreed that The Bay is a “brand in decline.”
“I think The Bay should reduce their store count and focus on a handful of stores (one per major city in Canada and mostly downtown) to offer better, but fewer, stores to its customers.”
Tiffany Bourre, Hudson’s Bay’s vice-president of communications, PR and heritage, declined to provide details about the company’s plans in Vancouver, saying more would be made public in the new year.
“Hudson’s Bay has a long history and continued commitment to the Vancouver market. HBC is excited to reinvest in the Vancouver community and is focused on investments in and the redevelopment of its flagship location on Granville Street in downtown Vancouver,” she said in an email.
The downtown Vancouver store location has been earmarked for redevelopment since HBC announced in 2022 a mixed-use project that would retain the outside of the heritage building at West Georgia and Seymour streets, reimagine the retail space inside and add a 1,000,000-sq.-ft., 12-storey office tower on top.
At the time, HBC executives from New York and Toronto loosely estimated the redevelopment cost at $700 million. But soon after, the downtown Vancouver office vacancy rate started rising to higher levels, even though it stayed lower than in other major cities and has since dropped.
There has been some unofficial talk about pivoting the project to other uses such as residential or hotel, but the reality of rapidly escalating construction costs and a very tight financing market has kept a lid on any solid plans.
In the meantime, some shoppers continue to visit the downtown location — with mixed reactions.
Given that their local Hudson’s Bay store shut down at Lougheed mall in Burnaby last year, Ahmed Mollaa and his wife decided to venture downtown last week to check out the flagship store.
But they emerged from the store empty-handed. Prices, for the most part, were out of their range.
“We find only the exclusive brands here,” Mollaa said. “She was looking for something in the mid-range. We just entered half an hour ago and now we are out.”
While friends Asha Virdee and Ekko Bonder also didn’t buy anything, they said they still liked the experience of walking through the store. At a time when online shopping is all the rage, it’s nice to be able to try on clothes.
“You want to know how the material feels,” Virdee said.
Bonder appreciated the flagship store’s historical architecture — like its ornate Corinthian columns — and landmark status. Their only suggestion would be to maybe freshen up the place — “it looks kind of old-fashioned,” Virdee said — and get the elevators working.
With files from Douglas Quan and John Mackie
jlee-young@postmedia.com
