Opinion: Reasons for Hudson’s Bay Collapse Reveals Retail’s Brutal New Reality

When I heard Hudson's Bay announcing the liquidation of its entire business in Canada, I wasn't surprised. As arguably the largest department store in Canada with a 350-year history, its closure sends shockwaves through the Canadian retail landscape. However, to understand the significance, we must investigate what happened behind the scenes.

1. A Failure to Evolve

The most glaring factor behind Hudson's Bay's demise was its inability to adapt to modern consumer preferences. The company struggled with painfully slow e-commerce adoption while competitors raced ahead. Other department stores successfully integrated independent brands, popular D2C offerings, and created engaging in-store activations. Hudson's Bay did none of this effectively or at scale.

Their merchandising strategy became increasingly disconnected from reality. Walking through their stores in recent years felt like stepping into a retail time capsule – dreadful, empty, sporadic, and unorganized. Perhaps this worked for shoppers over 45 seeking their annual Christmas fragrance in that familiar spot on the third floor, but for everyone else, it offered nothing worth visiting for.

I haven't personally shopped at Hudson's Bay for nearly a decade. The one time I tried buying a Polo jacket from their inventory (requested on someone's Christmas list), they didn't even have it in-store. I had to order it online for delivery – which perfectly illustrates their broken omnichannel experience.

2. Digital Transformation Failures

Their e-commerce operation was particularly disastrous. The website made a fundamental error: it wasn't user-friendly for Canadians despite being a Canadian retail institution. When shopping on thebay.com (notably not thebay.ca), you couldn't easily determine if prices were in Canadian or US dollars.

The shipping experience was completely uncompetitive. Adding a $45 eyeshadow palette to my cart triggered an additional $15 shipping charge – a deal-breaker when competitors offer free or low-cost shipping. What's worse, when I checked the direct-to-consumer site for the same brand, they offered the identical product at a discount.

This raises the question: what advantage did Hudson's Bay offer online shoppers? The answer appears to be none. They implemented an omnichannel approach so poorly that it became a liability rather than a strength. Online retail isn't just about having a website; it's about providing the conveniences customers expect – free shipping, fast delivery, and competitive pricing.

3. Disconnected From Their Core Market

The US ownership of this Canadian icon created an additional layer of disconnection. Despite proudly waving its Canadian heritage in marketing, the operational reality felt foreign. The pricing structure, delivery times, and shipping fees didn't meet Canadian customer expectations.

To Canadian shoppers like myself, Hudson's Bay appeared to be simply price-gouging us. The company failed to communicate its ownership structure and pricing model, leaving loyal Canadian customers feeling betrayed. It was like they sold out to their Canadian market without even throwing a farewell party.

4. Missing the Generational Shift

Hudson's Bay fatally misunderstood what younger shoppers wanted to buy. Their merchandise catered primarily to men and women over 45, while completely missing the needs of younger generations who now control most spending power in apparel and accessories.

The younger demographic seeks relaxed, casual, transitional pieces that work from workday to evening out. They want universal, versatile items that match their personal style. Hudson's Bay completely missed major trends like athleisure and the comfort-wear revolution accelerated by COVID-19. The mismatch between their merchandise and new consumer preferences became impossible to overcome.

5. The Real Estate Paradox

As foot traffic declined, so did the value of Hudson's Bay's prime retail locations. Commercial real estate values are directly tied to the customers a store attracts. When shoppers stopped coming, these once-valuable properties became increasingly worthless.

The ripple effects will be substantial. Hudson's Bay functioned as an anchor in malls and shopping districts. Their departure will create vacant spaces that risk turning vibrant retail areas into ghost towns. We'll likely see two divergent outcomes: either further retail closures in affected areas, or a transformative wave of new businesses – successful D2C brands expanding to physical locations, or food, restaurant, and entertainment businesses filling the void.

What emerges will likely be niched, specialized, and customer-focused than the generic department store model Hudson's Bay represents.

6. Supply Chain Collateral Damage

The liquidation will impact numerous suppliers who relied on Hudson's Bay's distribution network. According to vendors, the company had already struggled to pay suppliers on time in recent years. Many brands had already pulled their merchandise from Hudson's Bay stores due to payment issues and concerns about theft (for which brands often had to absorb the losses).

The liquidation process will likely further delay any outstanding payments, with suppliers falling into a priority queue. Unfortunately, many vendors waiting on payments may never see that money now that formal liquidation has been announced.

Lessons for Retail Survivors

The collapse of Hudson's Bay marks the end of an era in Canadian retail. Its 350-year legacy couldn't save it from the rapid transformation of consumer behaviors.

The key lesson is clear: Brand name no longer guarantees customer loyalty. Product offerings now trump brand heritage.

Retailers who want to avoid Hudson's Bay's fate must focus intensely on understanding what customers want now – not what they wanted months or weeks ago. The companies winning in today's market are those tapping directly into existing consumer desires rather than trying to dictate them.

The power dynamic has fundamentally shifted. Traditional fashion cycles where designers and retailers dictated trends are disappearing. Even luxury designers are skipping fashion weeks, recognizing their diminished influence. Why create collections hoping people will like them when you can simply figure out what people already want and deliver it?

Consider the current bag charm trend that emerged organically through social media. Brands like Balenciaga, Coach, and Prada quickly incorporated these charms into their product lines. They recognized that customers will go where the products they want are available, regardless of the brand name on the door.

The Future of Department Stores

For Canadian department stores, the writing is on the wall. The data doesn't lie—younger shoppers are telling us these stores aren't necessary. The new generation craves temporary pop-ups that create FOMO (fear of missing out). They want reasons to visit physical stores: limited-edition items, founder meet-and-greets, and influencer events.

The successful physical retail spaces of tomorrow must be interactive and constantly evolving. Permanent spaces need impermanent, ever-changing offerings – new products, collaborations, and events. If retailers can't maintain this pace of innovation, they should stick to direct-to-consumer e-commerce.

The Hudson's Bay liquidation is a warning sign of a fundamental shift in how Canadians shop. The retailers who survive will be those who listen most closely to what customers actually want, rather than what they've historically provided. In today's market, adaptation isn't just important – it's everything.