R
ichard Baker's Legacy: A Tale of Two Hudson's Bays

    Behind the iconic storefronts of Hudson's Bay lies a complex web of financial engineering and failed retail strategies. As executive chairman, Richard Baker has extracted billions from the company's real estate portfolio, but his inability to revive the department store chain has left it on the brink of liquidation.

    Baker's private-equity background has been both a blessing and a curse for Hudson's Bay. He brought a shrewd investor's mindset to the table in 2008, paying $1.1 billion for the company and promptly monetizing its assets. The sale of Zellers leases to Target Corp. netted him $1.8 billion, while subsequent property sales to landlords like Cadillac Fairview and RioCan generated hundreds of millions more.

    However, Baker's focus on extracting cash from Hudson's Bay properties came at a cost: the company's retail operations suffered. Stores fell into disrepair, suppliers went unpaid, and employees dwindled in number. The once-iconic department store chain became a shadow of its former self, unable to compete with online retailers or attract new customers.

    As Baker divided his empire between Saks Global and Hudson's Bay, it became clear that one division represented his future, while the other was his past. Successful journeys through bankruptcy require goodwill and sacrifices from all parties involved – something Baker is finding in short supply.

    With lenders owed $1.1 billion, including landlords like RioCan, Hudson's Bay needs support to survive. Instead of helping its partner, RioCan's lawyers are opposing a restructuring plan that would divert funds away from joint venture entities and towards secured creditors.

    Baker's 17-year tenure as governor has left Hudson's Bay with a legacy of financial engineering but little else. As the company teeters on the edge of liquidation, it's clear that his focus on extracting cash from real estate came at the expense of its retail operations. The once-venerable department store chain may soon become a relic of history, a victim of Baker's failed strategy and inability to adapt to changing consumer habits.

    Share your memories and thoughts about Hudson's Bay

    The Hudson's Bay Co. has been a staple of Canadian retail for over three centuries, with many people growing up with the iconic striped merchandise and memorable shopping experiences. Do you have a strong memory involving The Bay that you'd like to share? Perhaps you registered for your wedding or made a meaningful purchase there, worked at a location, or simply recall a different time for department stores. We want to hear about it. If you'd like to send us a photo related to your submission, email [email protected] with "Bay memories" in the subject line.