Hudson’s Bay is relinquishing its previous store locations back to landlords, effectively halting B.C. billionaire Ruby Liu’s attempt to acquire the failed retailer’s leases. Franco Perugini, HBC’s senior vice-president of real estate and legal, communicated in an email to The Canadian Press on Monday that the company is disavowing the leases for 25 properties Liu had sought to purchase.
A disclaimer, a legal mechanism that terminates a lease before its expiration, absolving the tenant of responsibilities such as rent payments or property maintenance, will be invoked by HBC unless any landlord challenges it, Perugini explained, leading to the termination of the leases on Nov. 27.
Linda Qin, a representative for Liu, did not provide an immediate response to inquiries regarding the disclaimers. HBC vacated its 80 stores and an additional 16 under its Saks branding during the summer following its filing for creditor protection and merchandise liquidation.
Upon listing its leases for sale, Liu emerged as a potential buyer for up to 28 of them, intending to establish a new department store bearing her name. HBC swiftly obtained court approval for Liu to acquire three leases in B.C. malls she owned, namely Woodgrove Centre, Mayfair Shopping Centre, and Tsawwassen Mills.
However, the remaining 25 leases faced strong opposition from landlords such as Cadillac Fairview, Oxford Properties, and Ivanhoé Cambridge. They rejected Liu’s tenancy offer despite her $69.1 million bid for the leases, citing concerns over her business plan’s adequacy and her lack of experience.
Liu contended that she possessed the resources necessary to fulfill the lease terms, pledging significant investments in hiring, inventory acquisition, and renovation to revitalize the sites. HBC, compelled by the need to repay approximately $1.1 billion to its creditors when it commenced its wind down, saw Liu as a valuable opportunity to recoup some of the owed funds.
Nonetheless, last month, HBC’s efforts were thwarted when a judge ruled in favor of the landlords, expressing reservations about Liu’s capacity to meet the lease conditions she sought. Subsequent to the ruling, HBC did not disclose intentions to appeal the decision, with the lease disclaimer indicating a cessation of efforts to pursue the sale.
Josh Burleton, a spokesperson for Oxford Properties, remarked via email on Monday that HBC’s decision to disclaim the leases “brings some certainty to this lengthy and costly process and allows us to move forward.” Oxford has maintained a focus on safeguarding its assets throughout HBC’s wind down to support employees and pensioners. Oxford is the real estate arm of the Ontario Municipal Employees Retirement System, overseeing the pensions of over 600,000 plan members.