You don’t have to be a genius or a member of Mensa to assess the current state of the American shopping mall.
If you’ve been to one recently — or, really, if you’ve just switched on the news — you’re probably aware that they’re on the decline.
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Once the central hubs for shopping and commerce, most shopping malls around the country are struggling with a laundry list of issues.
For one, foot traffic at most malls is declining. That’s especially true in rural or less-affluent areas, where access to discount chains and online shopping providers is on the rise.
And with the loss of many key anchor stores, like JCPenney, Lord & Taylor, and Sears, there’s less of a draw. This causes something of a domino effect throughout the entire mall, and many smaller stores close as a result.
In fact, recent estimates suggest that nearly 90% of shopping malls in the U.S. could shutter within the next 10 years.
Hudson’s Bay is getting a savior.
Image source: Bloomberg/Getty Images
Department stores are slow movers
Part of the reason malls have been struggling over the past couple of decades is because they are giant apparatuses with a lot of moving parts.
The average mall is between 400,000 and 800,000 square feet. Most host between 50-100 tenants. And despite the rapidly evolving shopping landscape, tenant turnover is relatively slow.
More closings:
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This means that malls themselves are incredibly slow to adapt to any change — big or small.
Change moves at a glacial pace at the massive department stores located in and around malls, too.
JCPenney is a great example. The department store used to represent the pinnacle of shopping convenience; there were very few places you could get furniture and formalwear all under one roof in the 1980s, after all.
But with the rise of online shopping, discount retailers, and more conveniently-located shopping plazas, JCPenney struggled to adapt nimbly thanks to high operating costs, a lot of inventory, and a reluctance to accept the evolving times.
Iconic department store gets a lifeline
The same can be said of Hudson’s Bay.
The oldest department store in North America, which is based out of Canada, announced plans to close down all stores and liquidate all of its upscale inventory in April.
But in May, it was reported that Hudson’s Bay had some interested buyers, none of which were insiders.
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And now, it’s been revealed that Hudson’s Bay will sell its intellectual property (IP) to Canadian Tire Corporation for about $21.4 million — or $30 million Canadian dollars.
The sale includes the following brands and trademarks:
Hudson’s BayThe BayMulticolored HBC StripesGlucksteinHudson NorthDistinctly Home
It may seem like a mismatched deal for an automotive company to purchase a department store brand, but Canadian Tire views the deal as a patriotic bet on Canadian business.
And it’s no stranger to collecting other brands. It currently owns the following:
Party City CanadaMark’sSportChek
“It’s disheartening to witness the final days of another great Canadian retailer, and while the circumstances are unfortunate, we’re proud to step in for customers,” Canadian Tire Corporation CEO Greg Hicks said of the deal.
“Ultimately, customers are at the core of all we do, and by Canadians’ reaction to recent rumours of this news, it is clear they see us as a great home for HBC’s heritage. We are proud to steward these iconic brands into our – and their – next century.”
The deal is expected to go through by summer 2025.
