Hudson’s Bay, one of Canada’s oldest retail chains, has paused its loyalty program amid its decision to file for creditor protection as it grapples with financial challenges.
The company made the announcement on March 7, revealing plans to restructure its operations in an effort to stay afloat.
As Hudson’s Bay navigates through the creditor protection process, the company said in its press release that it is exploring “strategic alternatives and engaging stakeholders” to find ways to preserve and boost its business.
As part of this move, Hudson’s Bay has paused its loyalty program, according to court documents.
As of Feb. 1, the court filing shows more than eight million Canadian customers had outstanding reward points worth more than $58 million.
“Loyalty points is giving product away. They just don’t have that luxury at the moment,” Lisa Hutcheson, managing partner of retail consulting firm J.C. Williams Group, told CTVNews.ca in a phone interview Wednesday.
However, Hutcheson says gift cards have value to the company and people tend to spend more when they use one.
Retail experts warn customers holding onto the company’s gift cards to use them sooner rather than later. Hudson’s Bay said it is currently honouring outstanding gift cards – as of Feb. 1, that amounts to $24 million.
“I think by still accepting gift cards, they’re wanting people to come in and get some traffic into the stores,” Hutcheson said.
As for the department store model, Hutcheson said it’s in decline.
“We’ve already lost Eaton’s, Simpsons, Sears and more recently Nordstrom.”
Hutcheson cited the role of department stores changing and the lack of Canada’s population density to support these types of stores.
“Industry experts have just been wondering when this day was going to come,” Hutcheson said. “Why is the escalator not working and broken? Why are the lights burn out? Why are sections closed in the store with no merchandise? Those have been warning signs for months, if not years,” she added.
When asked whether they could recover, Hutcheson said it’s not impossible, but will be “very difficult.”
Forty Hudson’s Bay locations out of the 80 across the country could be closed as part of a restructuring deal, which could affect thousands of jobs, The Canadian Press reported Monday. The company currently employs more than 9,000 people.
“Getting rid of that first 50 per cent they talked about seems reasonable. We’ve seen some brands that have been acquired and use this creditor protection time to reposition and re-strategize,” Hutcheson said. She cited Mastermind Toys and The Body Shop Canada.
CTVNews.ca wants to hear from you.
Do you have unused Hudson’s Bay points? How does the pause on the loyalty program affect your shopping habits? Are you planning to continue shopping at Hudson’s Bay? Does Hudson’s Bay’s paused rewards program make you reconsider your loyalty?
Share your story by emailing us at dotcom@bellmedia.ca with your name, general location and phone number in case we want to follow up. Your comments may be used in a CTVNews.ca story.
With files from CTV National News’ Andrew Johnson, CTVNews.ca’s Christl Dabu, The Canadian Press
