From concerns about losing their homes to regrets about not accepting a previous severance offer that could have potentially paid them three times as much money, there were “a lot of tears” among some of Hudson’s Bay Co. ULC’s roughly 9,000 employees this week as Canada’s oldest departmental store started liquidating its outlets on Monday.

HBC’s constant financial struggles meant the “writing was on the wall,” Jody Nesbit, president of Union Local 240, which represents about 60 Bay employees, said.

However, workers were hopeful the company, founded in 1670, would turn things around. But those hopes were dashed on Friday when a court allowed it to start liquidating 90 of its 96 stores.

“They (the employees) didn’t ever think that the Hudson Bay Company would be gone from Canada,” Nesbit said. “It really took people by surprise.”

HBC went to court on March 7 to get an order that would protect it from its creditors as it struggled to pay its dues to landlords, vendors and service providers. It took the step after a landlord locked it out of a store in Sydney, N.S., and a team of bailiffs attempted to seize merchandise from a store in Toronto’s Sherway Gardens mall.

The move was supposed to provide the company, which struggled to cope with the shift towards online shopping, with “breathing room” as it looked for financing. That plan, however, didn’t work out, as trade tensions between the United States and Canada pushed potential financiers to the sidelines, it said.

Nesbit said that reality is “slowly setting in” for the employees, many of whom have worked at the Bay for almost all their working lives, including one person from her union who was there for 38 years.

She said some of those who declined a $25,000 severance package about 18 months ago during HBC’s previous restructuring attempt may now have to be satisfied with a maximum of $8,800 as per the federal Wage Earner Protection Program Act.

The Bay owes more than $950 million to its creditors, which includes banks, big clothing brands and other businesses, so Nesbit doesn’t expect employees to receive any additional payments.

Andrew Hatney, a lawyer representing several HBC employees, is particularly concerned about the issue of disability payments and said he wrote to the company on Monday to ask whether HBC will continue to pay them.

“We hope this is not going to be a repeat of Eaton’s situation, where the disabled employees had their benefits cut off and they were suffering as a result,” he said.

One such worker, who has been on disability leave since 2021, said she uses her benefits to buy medicine worth thousands of dollars and can’t imagine paying for them if that support is gone.

The 50-year-old employee, who asked to remain anonymous, has worked at the Bay for the past 25 years and expected the retailer’s fall, but the decision to close so many stores at once was a “big shock.”

“I don’t have any other experience,” she said. “I knew the rules and policies inside out, and right now at 50 years old, even if I go off the disability, who the heck is going to even hire me in the future? I don’t know; I really don’t know.”

Aside from workers, certain small businesses, such as Hair Republic HR4 Inc., which has two of its four branches located in Bay stores, are also concerned about receiving payments. Company co-founder John Nguyen said HBC owes it more than $35,000 and he is afraid he may not be a priority.

“Honestly, that’s a lot of money,” he said. “That’s not pocket change for us. If they owe a billion dollars … then there are creditors that are a higher priority for them.”

Nguyen was very excited when his company first got a chance to partner with HBC in 2021. So much so, he thought the email he initially received from Bay officials to explore a partnership was a scam. It was only after a virtual call that he realized it was an authentic opportunity and the company was interested in attracting a younger audience through his hair salon.

The partnership worked well for the first two years, but he said payment delays started in 2024. Payments would usually be made within 40 days, but that rose to at least 60 days last year.

The last time Nguyen’s company got paid was in February and that was for the months of November and December, which is usually its most profitable time due to the holiday season. He said he had to get HBC executives involved to make sure he got paid.

Despite the troubles, he said he appreciates getting a platform at such a big store. Just six months ago, he was even in discussions with HBC about opening more branches of his hair salon, but the uncertainty surrounding the company made him “drag his feet a little bit,” which he said saved him from a “major loss.”

The feeling of uncertainty seems to be a recurring theme among HBC workers as well, Nesbit said. She said it has been hard to provide members of her union with concrete answers since there are no clear answers as to how long it will take to sell all the inventory and when HBC will close its doors.

“It’s so difficult for our members,” she said. “Rip the Band-Aid so that they know what they are headed for.”

• Email: nkarim@postmedia.com

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