The court must reject the sale of Hudson’s Bay Store to billionaire Ruby Liu, Monitor ronts

The plan to sell 25 former Hudson’s Bay store locations to BC billionaire Weihong (Ruby) Liu has hit a roadblock. The monitor overseeing the sale has recommended that the court reject the deal, citing concerns about the viability of Mrs. Liu’s business plan.

Alvarez & Marsal, the monitor, submitted a report to the Ontario Superior Court of Justice stating that Mrs. Liu’s plan to launch a chain of department stores under her own name is not well-developed or realistic. The monitor raised doubts about the new retail activities being able to succeed in the short term.

While Mrs. Liu has successfully taken over three Hudson’s Bay lease agreements in shopping centers owned by her real estate investment company, Central Walk, the $6 million deal faced no opposition. However, the proposed deal for the remaining 25 stores, for which Mrs. Liu offered $69.1 million, has faced significant opposition from landlords and some lenders.

Mrs. Liu’s plan to open ‘Ruby Liu’ department stores in Ontario, Alberta, and British Columbia has been met with skepticism. The monitor described her team as a start-up organization without brand recognition or retail experience. Despite Mrs. Liu’s efforts to hire former Hudson’s Bay executives, the monitor noted that the team’s lack of experience at the leadership level poses a risk to the operational viability of the new chain.

Landlords, including prominent companies like Cadillac Fairview and Oxford Properties, have objected to the deal, citing concerns about the budget for store repairs and renovations. The monitor also expressed doubts about Mrs. Liu’s timeline for opening the stores and her ability to acquire sufficient inventory on time.

The hearing on the case is scheduled to begin on August 28, where the court will consider whether Mrs. Liu and her team are capable of fulfilling the obligations of the deal. The monitor’s report has cast doubt on the suitability of handing over the lease contracts to Mrs. Liu, raising questions about the future of the proposed deal.