The Bay store in Coquitlam closed Saturday as the company’s financial disputes with landlords continue to grow across Canada and in the U.S.
Landlords of several Hudson Bay Co. ULC locations — including a former Home Outfitters store in Nanaimo — say the company stopped paying rent early in the pandemic.
A notice posted at the entrance to the Bay in the Coquitlam Centre by mall owner Morguard Investments Limited states the company defaulted on rent payments.
“The premises has been re-entered and the lease has been terminated by the landlord for default in the payment of rent,” the notice says.
The department store has 30 days to dispute the existence of the default, it says.
Spokespersons for Morguard and the Hudson’s Bay Co. were not immediately available for comment.
No staff were in sight in the Coquitlam store and the lights were off, save for the odd Christmas tree.
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 rent to eight landlords in Ontario, Quebec, British Columbia and Florida.
The landlord of a Nanaimo property previously housing a Home Outfitters store has been granted a garnishing order for more than $500,000 for what it said is unpaid rent and other costs.
Under the B.C. Supreme Court order, the money is to be obtained from two banks — the Royal Bank of Canada and the Toronto-Dominion Bank — and deposited with the court.
This is an interim step in a court battle between landlord Dover Pointe Centre Ltd. and Hudson’s Bay Co. ULC, parent company of Home Outfitters. The case was filed by Dover Pointe in August.
HBC signed a 15-year lease, expiring Oct. 26, 2020, with the predecessor of the current landlord for the store at 6950 North Island Highway, Dover Pointe’s court document said.
In January of this year, HBC gave notice that it did not intend to extend its lease.
Dover Pointe said HBC stopped paying rent, operating costs and other expenses required under the lease in April. In June, Dover Pointe sent HBC an eviction notice and sought $542,634.
The garnishing order granted in October totals $542,889, representing the amount Dover Pointe said it is owed, plus a court filing fee.
Currently, the former Home Outfitters site is vacant and another tenant in the shopping centre is planning to move in.
The Bay store in the Bay Centre in downtown Victoria has gone to B.C. Supreme Court seeking a refund for rent paid since April to landlord, TBC Nominee Inc., which is affiliated with Manulife.
It is also asking to be allowed to discontinue payments until its dispute with the landlord over the building’s condition is resolved.
Manulife has not commented.
HBC said it paid its Bay Centre rent under protest.
Company records filed in court state that sales were down by $11 million between March and October this year, compared to the same months in 2019.
In Penticton, Cherry Lane Holdings, also connected to Manulife, is trying to evict the Bay. It said in a court document that HBC has not paid rent since April and that it refuses to give up the premises.
Last week, 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, court was told.
“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 would “prevail.”
Ian Putnam, president and chief executive officer of HBC Properties and Investment, said in a statement 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.”
— With files from The Canadian Press
