Hudson’s Bay Co. is seeking approval to change its corporate entities’ names as part of a $30-million deal to sell its intellectual property to Canadian Tire Corp. Ltd. Corp. A move likely intended to protect the value of the Bay’s brands, which Canadian Tire is hoping to maximize. The new name must be distinct from the historic name, which was shut down following the closure of its department stores.

Hudson’s Bay also revealed that it has hit a snag in a deal with Weihong Liu, chairwoman of Nanaimo, B.C.-based real estate investment company Central Walk a billionaire B.C. mall owner who is seeking to acquire as many as 28 of its store leases.

While Ontario Superior Court judge Peter J. Osborne approved the sale of three leases for stores in malls Liu already owns, lawyers for other landlords whose leases she’s also bidding on blasted a “very troubled” process and lack of information.

Liu estimates she can have at least 20 locations up and running within 180 days of signing leases and has budgeted $84 million to revamp the properties and another $96 million has been allocated for inventory over the course of eight months.

However, lawyers for mall owners Cadillac Fairview and Oxford Properties criticized the sale process.

Cadillac Fairview, said it has not received any “evidence of retail management expertise, established supplier relationships, logistical/ecomm capabilities, or robust and realistic financial projections — elements that are foundational for even a single retail store, let alone 28 stores of this size.”

New court filings show that landlords who own 23 of the properties are overwhelmingly opposed to her moving in. The court filing is from Alvarez & Marsal Canada Inc., a court monitor appointed to help the Bay through creditor protection.

The document says landlords representing 23 leases in a group of 25 Liu purchased won’t approve the plan and “would oppose any potential future forced assignment.

According to court documents, executives from Central Walk met with landlords between June 2 and 4, along with representatives from Hudson’s Bay, the court monitor and the advisers who ran the sale process for the company’s leases. Central Walk also sent letters to the landlords on June 6, describing the business plan for each of the locations.

“Certain Landlords have sent letters to the Company outlining their information requests and concerns,” according to an affidavit sworn on Monday by Hudson’s Bay chief operating officer and chief financial officer Michael Culhane. “The Company is actively engaging with Central Walk to address these information requests and concerns in a timely manner and is hopeful that all matters can be resolved consensually.”

The court-supervised process to sell off the company’s leases drew 12 bidders; 62 of the properties received no bids, and Hudson’s Bay is preparing to hand those locations back to landlords.

Liu wants to use the properties to open a chain of modernized department stores she will name after herself.  In an interview she indicated her belief that today’s young people are increasingly absorbed in the internet and spending less time in physical spaces, and she hopes her future malls built on Hudson’s Bay leases can change that.

Lui said her plan is to fill her future malls with “fun” activities, such as interactive role-playing games, to attract young people. The locations will sell makeup, jewelry and apparel but will also have play spaces for children, dining areas and entertainment space.

The push to offload leases comes months after Hudson’s Bay, Canada’s oldest company, filed for creditor protection in March because it was unable to deal with mounting debt.

Sources:

The Toronto Star
Financial Post
The Globe and Mail
The Toronto Star
The Toronto Star