Hudson’s Bay Coquitlam defaults on rent, has lease terminated

The Hudson’s Bay Company’s location at Coquitlam Centre was shuttered Saturday, Nov. 21, one of at least eight locations across Canada and the U.S. where the company has refused to pay rent since the start of the pandemic.

 

A hallmark of the Canadian retail world has had its lease terminated at Coquitlam’s biggest mall after it failed to pay rent.

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The Hudson’s Bay Company’s location at Coquitlam Centre was shuttered Saturday, Nov. 21, even as the mall filled with weekend shoppers. Inside, the lights had gone dark, save for the odd Christmas tree lit up for the pending shopping season.

“Black Friday warm up,” read one sign looking ahead to next week’s major shopping holiday. 

No staff were in sight. A notice posted at the store’s entrance by landlord and mall owner Morguard Investments Limited, stated the company had defaulted on its rent payments. 

“The Premises has been re-entered and the Lease has been terminated by the Landlord for default in the payment of rent,” began the notice dated Nov. 21.

The letter notes the department store has 30 days to dispute the existence of the default. 

A spokesperson for HBC told the Tri-City News that the company is working with its landlords across North America to “amicably and logically share the losses incurred during the pandemic.”

“We believe that there are fair solutions to be had as we recover from this public health crisis,” wrote HBC spokesperson Tiffany Bourré in an email. “In this instance, we are eager to reach a fair resolution, just as we have done with other landlord partners.”  

The Tri-City News reached out to the landlord but has not received a response.

Shoppers peer into the Hudson's Bay at Coquitlam Centre after it was shuttered for failing to pay re
Shoppers peer into the Hudson's Bay at Coquitlam Centre after it was shuttered for failing to pay rent. - DIANE STRANDBERG/THE TRI-CITY NEWS

 

The iconic retailer just celebrated its 350th anniversary, but despite its staying power, the pandemic has strained the company’s viability. 

This isn’t the first time HBC has struggled to pay its rent. 

According to a Toronto Star report published Saturday, court records show the company has leases valued at $20 million a month and hasn’t paid any rent to eight landlords across Ontario, Quebec, British Columbia and Florida. 

How the termination of the lease in Coquitlam will play out is not yet clear; however, recent court case suggests it could be a tortuous path.

Earlier this month, an Ontario judge directed the company to pay half the rent — $659,395 — it owed to the landlord of a Toronto-area mall, while at the same time, blocking its eviction. 

Hudson’s Bay Co. hadn’t paid rent for seven months.

"HBC’s aggregate indebtedness to the landlords of the Oxford Shopping Centres ... is extremely large and growing at an alarming rate," Oxford Properties said in court documents in the lead up to the decision.

The spokesperson for the Toronto-area landlord said the order was an interim ruling and that they were confident they will “prevail.” 

A statement from Ian Putnam, president and chief executive officer of HBC Properties and Investment, said the company was grateful the court “has recognized the extraordinary challenges of the global pandemic and how the burden can be shared fairly and lawfully, especially as it relates to non-essential retailers.”

The legal wrangling highlights the challenges facing both commercial landlords and retailers as foot traffic in brick-and-mortar stores continues to lag after widespread closures last spring.

With the second wave of the pandemic intensifying, the coming months could see more disputes emerge as shoppers turn to e-commerce instead of local shopping malls ahead of the busiest shopping season of the year.

— With files from the Canadian Press

 

 

 

 

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