Canada’s oldest company has started liquidating most of its stores—but what sorts of deals could shoppers find?
As of Monday, Hudson’s Bay started selling off its inventory at all but six stores, including the flagship in downtown Toronto, as well as the branches at Yorkdale mall and in Richmond Hill’s Hillcrest Mall. The remaining three stores are in Quebec, including one branch in downtown Montreal.
The historic company operates 80 stores, as well as three Saks Fifth Avenue stores and 13 Saks Off 5th branches through a licensing agreement.
The retailer aims to finish liquidation by June 15, but anyone who wishes to use their gift card has until April 6 to do so. Anyone who held a Hudson’s Bay Mastercard cannot view, earn or redeem any of their points, however.
“Once the liquidation sale begins, all sales will be final,” the Bay said in a release.
What could the liquidation sales look like?
“Hudson’s Bay is trying to get as much money as it can from the sale of its inventory, and that’s in order to pay creditors—those that they owe money to,” Daniel Tsai, adjunct professor of law business at Toronto Metropolitan University told CTV News Toronto in an interview Tuesday.
Tsai adds that the retailer will want to recover as much money back as they can from their sale, so they won’t necessarily go “hog wild” at the start and offer steep discounts.
“Realistically, the way they start with liquidation is usually fairly nominal discounts, like 10 to 20 per cent for the first few weeks,” retail analyst Bruce Winder told CP24.
Then, as the weeks carry on, the sales will likely get steeper the closer to the end date of business, Tsai says, when they have to shut down. In that time, Tsai says the court-appointed trustee will get involved with the liquidation process and start accelerating the sales and discounts—but these higher mark-offs won’t happen right away.
“It’s going to take a bit of time for them to eventually liquidate at the big discounts that people are going to be expecting,” Tsai said.
But, it might not pay off to wait. Heavier discounts typically pop up when shoppers aren’t buying what’s left, Tsai notes.
“Usually by the end—when it gets really nice at like 50, 60 or 70 (per cent)—there is not much left anyways. So it has some impact, but perhaps not as much as you would think,” Winder said.
That said, anyone seeking for some deals on luxury items and designer goods may want to wait.
“You’re going to start small in order to encourage early sales without destroying or damaging and too deeply cutting into your margins,” Jenna Jacobson, an associate professor at the Ted Rogers School of Management at the Toronto Metropolitan University, explained.
Whatever is left over in the sale will likely be sold off to third-party sellers or treated as a complete loss—meaning it is in the Bay’s best interest to sell off as much of their inventory as they can, Tsai said.
There are currently 32 Hudson’s Bay stores in Ontario, 16 in B.C., 13 in both Alberta and Quebec, and two in Manitoba, Nova Scotia and Saskatchewan.
Will the sales be different at Saks Fifth Avenue?
“It could be that the Saks Fifth Avenue and the (Saks Off) stores might actually be packaged differently, and there might be an effort to try to sell those stores to a different buyer,” David Soberman, professor of marketing at the Rotman School of Management at the University of Toronto, told CTV News Toronto.
Every company has a different approach to the liquidation process, Jacobson says.
But she said that the retailer’s strategists will work to determine what will work best for their existing shoppers.
“I wouldn’t anticipate that you would have the exact same sales across the board, but rather, looking to see how that could—how you could best meet the consumers of the various companies,” Jacobson said.
