Hudson’s Bay is getting a second life with a new owner—Canadian Tire Corp. Ltd.
Canadian Tire said Thursday that it will pay $30 million for intellectual property belonging to the retailer, which is Canada’s oldest company.
The sale includes the overarching Hudson’s Bay brand, its iconic, multi-coloured stripes motif, its coat of arms and other brand trademarks.
The deal allows products under these names to be sold by Canadian Tire, which also owns SportChek, Party City, Mark’s and Pro Hockey Life, at their 1,700 stores.
The exchange includes houseware brands Gluckstein and Distinctly Home, as well as discount brand Zellers and apparel line Hudson North, said a source familiar with the deal, who is not being named because they were unauthorized to speak about it.
Canadian Tire CEO Greg Hicks said the fall of the Bay is “disheartening to witness” but the deal his company reached is meant to be both “strategic” and “patriotic.”
“Some things are just meant to stay Canadian and we are honoured to welcome many of HBC’s leading brands – including the iconic HBC coat of arms and the Stripes – into our Canadian Tire family.”
The sale still needs court approval and companies that make purchases through creditor protection processes are under no obligation to make use of the brands they buy, but it’s likely Canadian Tire will capitalize on any acquisitions.
Its stores cover much of the same territory as Hudson’s Bay, making it easy to integrate Gluckstein, Distinctly Home and Zellers items into Canadian Tires and Hudson North into Mark’s and SportChek shops.
Canadian Tire’s brands would also be a natural fit for the Bay stripes—likely the most valuable asset being acquired. The green, red, yellow and indigo motif dating back to 1779 has emblazoned clothing and blankets but also cookware, canoes, pet collars and patio furniture, which Canadian Tire sells.
The proposed handover comes after Hudson’s Bay filed for creditor protection in March, saying it was having significant trouble paying its bills because of factors including a slow recovery from the pandemic, lower downtown traffic and the tariff war with the U.S.
Unable to secure funding to keep its 80 Bay stores and 16 others under the Saks banners alive, it started liquidating the shops and searching for a way to avoid the complete death of its brands.
At stake was more than the legacy of the 355-year-old department store chain, because the company has also played a pivotal role in Canadian history. It was founded in 1670 as a fur-trading business that controlled much of the country’s land, economy and Indigenous relations.
While it started as a way to exchange goods such as beaver pelts, animal furs and point blankets, Hudson’s Bay eventually morphed into a department store Canadians could count on for housewares, apparel and more. Consumers flocked to Bay locations to outfit their first homes, set up wedding and baby registries and take in holiday window displays.
When Hudson’s Bay started soliciting buyers for its brands, companies could seek to rebuild the business as a modern department store or just pick up and reimagine its brands.
The company ultimately received 17 bids. Canadian Tire’s focused on the intellectual property but also includes a bid for “a handful of lease locations.” It is unclear whether the company intends to run those locations as Bay stores or use them for its other brands.
Hicks said on a recent earnings call that Canadian Tire was not contemplating an acquisition of the Bay’s entire operations because “that is just not a good fit for us right now, given all the things we have going on.”
Questions about the company’s Bay offer emerged after The Canadian Press reported that two sources said Canadian Tire had bid on the intellectual property.
Neither Hicks nor Canadian Tire confirmed the offer, but he said on the call, “we have always considered attractive tuck-ins and brands and this time period is no different on that front.”
The time period was also opportune for another reason: Canadian Tire had just made a big sale that would free up cash to make a major purchase.
The retailer founded in 1922 announced earlier in the year that it was selling sportswear business Helly Hansen to Kontoor Brands. The almost $1.3 billion deal with the U.S. owner of clothing labels Wrangler, Lee and Rock & Republic boosted Canadian Tire’s balance sheet with the kind of cash it would need for a Bay deal.
While the Bay’s brands have found a home at Canadian Tire, its massive leases in prime shopping neighbourhoods are still in play.
Twelve parties have made bids for a total of 39 leases, with some bidders making a play for the same locations, recent court filings have said.
Aside from its leases, Hudson’s Bay is also looking for new owners for 4,400 pieces of art and artifacts including the royal charter that birthed the company in 1670. They are expected to be sold through an auction run by Heffel Gallery.
