HBC proceeds with legal action to reopen its stores in Toronto and the Peel Region

In an effort to contain the spread of COVID-19, retailers operating in Toronto and the Peel Region continue to struggle after the Ontario government announced the closure of non-essential businesses in the weeks leading up to the busy holiday season. 

In response to the government’s provisions, Hudson’s Bay Co. (HBC) has filed a law suit with the hopes that the of the Ontario Superior Court of Justice will overrule this most recent set of lockdown regulations.

Speaking to the Financial Post on HBC’s filing, head of Torys’ Corporate Restructuring and Advisory practice David Bish said that the company’s decision to take legal action towards the expected end of retail closures highlights the deep levels of frustration currently felt throughout the organization. 

“I don’t think this is a ‘Hail Mary’ as much as it underlines how significant the impact of these closures are on HBC and how frustrated they are at a critical time in their annual cycle to see their customers (driving) across the street to competitors’ stores to buy non-grocery items that HBC isn’t permitted to sell,” David said.

David also noted that the legal proceedings may have been sparked by the fear of a potential extension to the current lockdown or future retail closures.

“Even if HBC wins this contest, how many shopping days does this get them? It suggests both the importance of the Christmas shopping season to their business and also possibly of a belief that the ban may be extended or that there may be further bans,” he said. 

To find out more about the impact COVID-19 is having on organizations, listen to the Torys Business Brief podcast “The art of fixing broken businesses” where insolvency lawyers David Bish and Kyle Kashuba discuss how this current financial crisis is different from the 2008 recession, what principal challenges companies are facing, and what management can do to ease the pressure.