Hudson’s Bay has decided to return its former stores to landlords, effectively putting an end to B.C. billionaire Ruby Liu’s attempt to acquire the leases of the collapsed retailer.
Franco Perugini, the senior vice president of real estate and legal at HBC, confirmed in an email to The Canadian Press on Monday that the company is disclaiming the leases for 25 properties that Liu had sought to purchase.
A disclaimer is a legal procedure that terminates a lease before its expiration, freeing the tenant from responsibilities such as rent payments and property upkeep. Perugini mentioned that unless any landlord raises objections, the HBC leases will be terminated by November 27.
Linda Qin, a representative for Liu, did not provide an immediate response to requests for comments regarding the disclaimers.
HBC vacated its 80 stores and an additional 16 under its Saks banners during the summer after filing for creditor protection and selling off its inventory. Liu had expressed interest in acquiring up to 28 of these leases to establish a new department store bearing her name.
While HBC supported Liu’s plan and quickly gained court approval for her to purchase three leases in B.C. malls she owned, the remaining 25 leases were fiercely contested by landlords such as Cadillac Fairview, Oxford Properties, and Ivanhoé Cambridge. They were reluctant to accept Liu as a tenant, citing concerns over her business plan and lack of experience, despite her $69.1 million offer for the leases.
In response, Liu maintained that she had the resources and capabilities to fulfill the lease requirements, pledging substantial investments in hiring, inventory procurement, and site renovations to revive the locations.
With a significant amount owed to creditors totaling about $1.1 billion at the onset of its wind-down, HBC viewed Liu as a potential avenue for recovering some of these funds. However, the recent court ruling favored the landlords, expressing doubts about Liu’s ability to meet lease terms.
Following this decision, HBC did not indicate whether it would appeal but the lease disclaimer suggests it will not pursue the sale further.
Josh Burleton, a spokesperson for Oxford Properties, expressed on Monday that HBC’s decision to disclaim the leases brings clarity to the process and enables them to proceed. Oxford’s priority throughout HBC’s winding down has been safeguarding assets that support employees and pensioners. Oxford is the real estate arm of the Ontario Municipal Employees Retirement System, which manages the pensions of over 600,000 members.