The Fall of Hudson’s Bay: How a Canadian Icon Lost Its Way
- Garrett Gaudet
- Jun 4
- 7 min read
In March 2025, Hudson's Bay—Canada's oldest department store—filed for bankruptcy, announcing the closure of all of its remaining locations. The collapse of a company with over 355 years of retail history shocked the nation, even among those who hadn't shopped there in years. But for those paying close attention, the writing had been on the wall for more than a decade. As a marketing and customer experience consultant and a college professor teaching the next generation of business leaders, I've been vocal about my criticisms and analysis with students and peers regarding where Hudson's Bay went wrong. What follows isn't a financial post-mortem, but a deep dive into the customer experience and retail missteps that led to its demise.
A Legacy Untapped
Hudson's Bay predates Canada as a nation. And yet, despite its historical cachet, the brand failed to establish a compelling modern identity. In stores, there were no nods to Canadian heritage, other than the iconic HBC coloured stripes, no pride in its history, and certainly no emotional connection to its roots. It had the opportunity to be a symbol of national pride and community, the way Canadian Tire or Tim Hortons have become. Instead, it let its legacy fade into irrelevance.
Despite having more history than every Canadian company, Hudson's Bay felt sterile. There were no visual cues, signage, branding, or thematic design elements to reinforce its Canadian identity. Different companies have leveraged this identity (especially in the "Buy Canadian" movement) to foster deep customer loyalty; however, Hudson's Bay had barely incorporated this competitive advantage.
International Expansion Misfires
One of the most notable failures occurred with Hudson's Bay's brief expansion into the Netherlands from 2017 to 2019. The company spent over $350 million (CAD), acquiring 20 leases from Dutch retailer V&D and launching 15 retail stores. But the expansion lacked vision and customization for the Dutch market. The stores were well-designed and had a premium appearance. Still, they were indistinguishable from their predecessor V&D. Dutch consumers, already loyal to established stores like de Bijenkorf, saw no reason to switch. The stores lacked personality, felt overpriced, and worse, failed to communicate any sense of Canadian identity — a critical miss, given the historical friendship between the two nations post-WWII. If you're going to introduce a legacy Canadian brand to a foreign market, you need to present a compelling story of your brand to introduce yourself to the new consumers. Hudson's Bay offered nothing distinctive, especially to a market that already had a soft spot for Canada and Canadians. It was just another unremarkable department store and indeed not a competitor to De Bijenkorf. The panic button should've been hit after this spectacular collapse in the Netherlands.
A Failed Customer Experience
Retail lives and dies on customer experience. For Hudson's Bay, that experience had long since deteriorated. Walking into many locations felt like stepping back in time — not in a nostalgic way, but in a frustrating, neglected way. Carpets were stained. Ceiling tiles were discoloured. The lighting was poor. The technology was shockingly outdated, with green and blue text terminals straight out of the early 1990s still in use at checkouts. Even signage often featured obsolete logos. And the service? Often nonexistent. Finding a staff member to assist you was rare, and when you did, interactions were frequently disengaged. For a store that tried to market premium brands, there was none of the premium attentive customer service to match the expectations of a luxury shopper.
Identity Crisis: Who was Hudson’s Bay For?
Was it a luxury store? A mid-range department store? A budget-friendly option?
In reality, Hudson’s Bay tried to be all of them and ended up being none. You could find $1,000 jackets alongside brands like Chaps, which most millennials and Gen Z shoppers barely recognize. There was no precise brand positioning. This left consumers confused, and worse, disinterested and disconnected from the legacy brand. Younger generations, who now hold the majority of consumer spending power, saw Hudson’s Bay as their parents' store — or more commonly, the store you walked through to get to the mall.
"The store you walked through to get to the mall"
Never Evolved with Consumers
One of the biggest sins in retail is failing to evolve with your audience. Hudson’s Bay made its money off boomers and Gen X, but did little to court millennials and Gen Z.
Retailers like Abercrombie have successfully reinvented themselves back into relevance with younger shoppers. Hudson’s Bay didn’t. Its brand mix felt outdated. It lacked trend-focused marketing. And there was no compelling reason for new generations to build loyalty to a brand that they did not identify with. Many stores still featured outdated product lines, slow shipping, high delivery fees, and clunky websites — all major turn-offs in the age of Amazon and Instacart.
Zellers Revival: A Nostalgic Fumble
When Hudson’s Bay announced it would revive Zellers, there was hope and tremendous excitement among Canadian consumers for a resurrected brand. But the execution was dismal. Instead of standalone stores or a significant reimagining, Zellers became a small department within Hudson’s Bay locations. There was no excitement, no value-driven products, and no identity. The Bay had all this hype, banking on the commodity of nostalgia to bring customers into the store, but it didn't work. A brand can only go so far on nostalgia.
Missed Opportunities for Reinvention
What I would have done if I were the CEO of Hudson’s Bay:
Downsize: Shrink store footprints from massive 100,000+ square feet to intimate 3,000-square-foot formats focused on curated collections of products.
Franchise Model: Empower local entrepreneurs to run stores that reflect their communities.
Go Local: Dedicate space to regional Canadian brands and Indigenous owned businesses, creating a sense of community and purpose.
Embrace Canadiana: Incorporate murals, iconic imagery, and historical storytelling to reinforce its identity.
Technology Overhaul: Invest in modern POS systems, data analytics, and omnichannel shopping.
Experience-First Retail: Introduce cafes featuring coffee and products from local roasteries, community spaces, or personalized shopping experiences.
AI has generated concept renderings. *
What's next for Hudson's Bay?
In June 2025, Canadian Tire acquired the intellectual property of Hudson’s Bay, including its logos, store brands and trademarks. It’s unclear what they plan to do next, but if they hope to resurrect the brand, they must fundamentally rethink what Hudson’s Bay is and who it serves.
This is a unique opportunity to reimagine what Canadian retail can look like. Done right, it could be more than a store. It could be a movement. Done wrong, it will be forgotten entirely.
TLDR: learning outcomes for business owners from the fall of hudson's bay
Legacy Without Innovation Is Not Enough
A rich history doesn’t guarantee future relevance. Brands must continually adapt to changing consumer expectations, regardless of how iconic their legacy may be.
Customer Experience Is Everything
Poor in-store experiences—characterized by outdated technology, inadequate service, and uninspiring environments—directly drive customers away. Premium products demand premium service. In the 2020s, retailers must continually provide compelling reasons and foster strong relationships with customers.
Know Your Identity and Audience
Hudson’s Bay failed to define whether it was a luxury, mid-range, or discount retailer. Without clear positioning, it alienated all segments. Understand your identity and invest in developing the personas of your consumers.
Evolve With Generational Shifts
Retailers must evolve alongside consumer demographics. Ignoring Millennials and Gen Z, who will dominate spending into the next decade, leads to guaranteed irrelevance and does not future-proof your business.
Nostalgia Isn’t a Strategy
The Zellers revival shows that simply invoking memories isn’t enough. Nostalgia must be paired with modern value and relevance that resonates with consumers.
Localization and Community Engagement
A missed opportunity was not tailoring stores to local needs or embracing Canadian and Indigenous brands that could build deeper, meaningful connections. Speak with the locals to better understand the market, demands and needs to fill the gaps or the underrepresented wants of the community. This process of customer discovery will shape a more insightful and accurate persona.
Failed International Expansions Can Damage Brand Equity
Expansion without cultural relevance or differentiation, as seen in the Netherlands, wastes resources and damages credibility, also provoking the question of whether the same fate in Canada was only a matter of time. If you are entering a market with existing competition, ask yourself what is distinctive about your business and what new concepts you are bringing to the market.
Technology Isn’t Optional—It’s Foundational
In the era of Amazon, seamless digital and in-store experiences, updated systems, and data-driven personalization are critical. Customers expect to be able to use their smartphones and digital communication tools to receive hyper-personalized content based on their consumer behaviour. Delivering a customized experience for each customer is possible with a dynamic CRM (Customer Relationship Management) and a strategic plan for leveraging the data.
Reinvention Is Possible—but Requires thinking differently
Hudson’s Bay could have downsized, franchised, or repositioned itself. These opportunities were missed due to the lack of strategic vision or thinking outside the big box store to reevaluate what Hudson's Bay could become. It started as a small trading post. Why not return to the roots of what made the brand successful?
The Hudson’s Bay story is a cautionary tale for businesses across all sectors: evolve or risk extinction.
Listen to the full episode of the Garrett Gaudet Podcast: Why Hudson's Bay Failed: The Downfall of a Canadian Icon
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About the Author: Garrett Gaudet is a college professor and marketing/customer experience consultant. You can follow him on Instagram at @GarrettGaudet or visit GarrettGaudet.com for more insights and consulting opportunities.
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