For the first time, the complete list of 25 Hudson’s Bay Company (HBC) store leases that British Columbia billionaire Ruby Liu (Weihong Liu) and her company, Central Walk, are seeking to acquire has been publicly revealed through legal documents — albeit unintentionally.
Yesterday, numerous documents and emails were added to the court-appointed monitor’s publicly accessible service list, entailing confidential materials that were released by the court.
This major release of materials was triggered by Liu’s direct letters earlier in July to the judge presiding over HBC’s Creditors Arrangement Act (CCAA) proceedings, including the disposal of the retailer’s leases. She was sharply rebuked by the court and warned that any further correspondence would be deemed as harassment.
Although the released materials were partially redacted, they provide new details and context about the ongoing tug-of-war — not only between Liu and the landlords, but also between Liu and HBC’s law firm, which has repeatedly threatened to terminate her lease purchase agreement and seize her deposit, equal to 10 per cent of the purchase price.
This includes an email attachment from Central Walk listing all 25 store locations, which Liu plans to use as the foundation for launching a new modern Canadian department store chain.
Five locations are in B.C., including four in Metro Vancouver and one in Kelowna. Separately, last month, out of the original May agreement with HBC to acquire up to 28 store leases, the court approved Liu’s purchase of three HBC store leases at mall properties she owns in B.C., including Tsawwassen Mills, Mayfair Shopping Centre, and Woodgrove Centre.
Another five locations are in Alberta, with three in Calgary and two in Edmonton, including one at West Edmonton Mall.
The remaining 15 locations are in Ontario, including eight in the Greater Toronto Area, three of which are in Toronto proper.
Other than the three locations she owns, here is a complete breakdown of the 25 HBC store leases that Liu is seeking to acquire under the agreement:
Kelowna — Orchard Park Shopping Centre
Store size: 127,290 sq. ft.
Number of floors: 1
Estimated cure cost: $992,613
Landlord/owner: Primaris REIT
Richmond — CF Richmond Centre
Store size: 169,692 sq. ft.
Number of floors: 2
Estimated cure cost: $1,323,265
Landlord/owner: Cadillac Fairview
Surrey — Guildford Town Centre
Store size: 174,462 sq. ft.
Number of floors: 2
Estimated cure cost: $1,360,462
Landlord/owner: Ivanhoe Cambridge
Coquitlam — Coquitlam Centre
Store size: 120,086 sq. ft.
Number of floors: 2
Estimated cure cost: $936,436
Landlord/owner: Morguard Investments/Pensionfund Realty
Langley — Willowbrook Shopping Centre
Store size: 131,146 sq. ft.
Number of floors: 2
Estimated cure cost: $1,022,682
Landlord/owner: QuadReal Property Group
Calgary — CF Market Mall
Store size: 200,000 sq. ft.
Number of floors: 2
Estimated cure cost: $1,559,608
Landlord/owner: Cadillac Fairview
Calgary — Southcentre Mall
Store size: 164,514 sq. ft.
Number of floors: 2
Estimated cure cost: $1,282,887
Landlord/owner: Oxford Properties
Calgary — CF Chinook Centre
Store size: 206,514 sq. ft.
Number of floors: 2
Estimated cure cost: $1,610,405
Landlord/owner: Cadillac Fairview
Edmonton — West Edmonton Mall
Store size: 164,250 sq. ft.
Number of floors: 2
Estimated cure cost: $1,280,828
Landlord/owner: Tripe Five Group
Edmonton — Southgate Centre
Store size: 236,551 sq. ft.
Number of floors: 2
Estimated cure cost: $1,844,634
Landlord/owner: Ivanhoe Cambridge
Toronto — CF Fairview Mall
Store size: 152,420 sq. ft.
Number of floors: 2
Estimated cure cost: $1,188,577
Landlord/owner: Cadillac Fairview
Toronto — CF Sherway Gardens
Store size: 223,477 sq. ft.
Number of floors: 2
Estimated cure cost: $1,742,683
Landlord/owner: Cadillac Fairview
Toronto — Centerpoint Mall
Store size: 122,502 sq. ft.
Number of floors: 1
Estimated cure cost: $955,276
Landlord/owner: Morguard Investments/Revenue Properties Company
Richmond Hill — Hillcrest Mall
Store size: 136,915 sq. ft.
Number of floors: 1
Estimated cure cost: $1,067,669
Landlord/owner: Oxford Properties
London — CF Masonville Place
Store size: 84,928 sq. ft.
Number of floors: 2
Estimated cure cost: $662,272
Landlord/owner: Cadillac Fairview
Ottawa — Bayshore Shopping Centre
Store size: 180,696 sq. ft.
Number of floors: 3
Estimated cure cost: $1,409,075
Landlord/owner: Kingsett Capital
Ottawa — St. Laurent Shopping Centre
Store size: 145,074 sq. ft.
Number of floors: 2
Estimated cure cost: $1,131,293
Landlord/owner: Morguard Investments
Kitchener — Fairview Park Mall
Store size: 184,714 sq. ft.
Number of floors: 1
Estimated cure cost: $1,440,407
Landlord/owner: Westcliff Management
Newmarket — Upper Canada Mall
Store size: 142,780 sq. ft.
Number of floors: 2
Estimated cure cost: $1,113,404
Landlord/owner: Oxford Properties
Burlington — Mapleview Centre
Store size: 129,066 sq. ft.
Number of floors: 2
Estimated cure cost: $1,006,462
Landlord/owner: Ivanhoe Cambridge
Oshawa — Oshawa Centre
Store size: 122,624 sq. ft.
Number of floors: 2
Estimated cure cost: $956,227
Landlord/owner: Primaris REIT
Waterloo — Conestoga Mall
Store size: 130,580 sq. ft.
Number of floors: 2
Estimated cure cost: $1,018,268
Landlord/owner: Primaris REIT
Brampton — Bramalea City Centre
Store size: 131,438 sq. ft.
Number of floors: 2
Estimated cure cost: $1,024,959
Landlord/owner: Morguard Investments
Hamilton — Lime Ridge Mall
Store size: 125,307 sq. ft.
Number of floors: 2
Estimated cure cost: $977,149
Landlord/owner: Primaris REIT
Markham — CF Markville
Store size: 140,094 sq. ft.
Number of floors: 2
Estimated cure cost: $1,092,459
Landlord/owner: Cadillac Fairview
All of these store leases are located in suburban-style malls, with none involving HBC’s massive flagship buildings with immense historic value.
These 25 locations amount to a takeover of about 3.85 million sq. ft. of commercial retail space.
The smallest is the 84,928 sq. ft. Hudson’s Bay store at CF Masonville Place in London — the only site among the 25 that is under 100,000 sq. ft. The largest are the Hudson’s Bay locations at Southgate Centre in Edmonton (236,551 sq. ft.) and CF Sherway Gardens in Toronto (223,477 sq. ft.). However, out of all 28 locations identified in the main agreement, the smallest location is about 33,000 sq. ft. at Tsawwassen Mills, which was previously a Saks OFF 5th outlet store — the only non-Hudson’s Bay department store location.
Among the multi-location landlords, Cadillac Fairview (CFCL) oversees seven of the sites, Primaris REIT oversees four, Morguard Investments oversees four, Oxford Properties oversees three, and Ivanhoe Cambridge oversees three.
Central Walk’s estimated “cure cost” for each location is essentially the amount required to bring the lease into good standing, so the landlord can no longer object on the grounds of non-compliance.
The combined total estimated cure cost is exactly $30 million, as of June 25.
However, in a July 5 letter to Liu, HBC’s law firm stated that these estimated figures do not provide a sufficient level of detail. The firm instead requested an itemized breakdown of all cure costs that it claims are, or will be, owed under each lease as of the closing date.
HBC’s advisors indicate they have done a lot to help the buyer, Liu, such as introducing them to Canadian retail experts, setting up meetings with landlords, helping create financial plans, reviewing letters sent to landlords, and contacting former Hudson’s Bay suppliers who might work with Liu’s new department store chain in the future. Despite this help, they claim Liu has not made enough effort to get the required landlord approvals, which is holding up the court process for finalizing the deal.
“Liu is making this up as she goes”
Through their respective law firms, the landlords have voiced strong opposition to the proposed lease takeover, citing a profound lack of confidence in Liu and her strategy. Until now, news media reports have only captured this dissatisfaction in brief summaries included in court motions. However, yesterday’s release of document — prompted by Liu’s emails to the judge — brought to light a series of letters exchanged between the landlords’ law firms and HBC’s lawyers, offering a far more detailed look at their concerns.
They allege that Liu has arrived at meetings with landlords poorly prepared, and that they have at times learned more about her plans through news reports and her posts on Chinese social media than from her directly.
“Any business plan for an enterprise of the scale that Ms. Liu is purporting to run would have been significantly more comprehensive and thought out to be taken seriously by any interested parties,” reads a June 11 letter from Cadillac Fairview’s lawyer to HBC.
“CFCL is left with a host of unanswered questions, including, but certainly not limited to, her plans for merchandising, staffing, repairs and renovations, marketing, and financing… It is evident to CFCL that the Proposed Assignee is not able to fulfil the terms of the leases in question or to operate a massive retail operation in the leased locations in question. Nor does the Proposed Assignee have any apparent understanding of the scope and requirements of the undertaking that it proposes. It is apparent to CFCL — including from its most recent meeting with Ms. Liu — that Ms. Liu does not have the wherewithal to act as a retail operator in these leased locations.”
In its letter, Cadillac Fairview disclosed that Liu plans to convert at least some of the stores into large children’s playgrounds, food halls under the Eataly chain, and a “potpourri of eclectic marketplaces and entertainment experiences.” However, Cadillac Fairview argues that these proposed uses do not comply with the terms of the existing leases.
Perhaps most damning in Cadillac Fairview’s letter is the following statement: “CFCL is left with the strong impression that Ms. Liu is making this up as she goes.”
Liu’s three-month timeline to open 28 stores deemed unrealistic
On June 11, a letter by the lawyer for Oxford Properties to HBC’s legal team asserted Liu has a “very limited understanding” of the terms of the leases and the extent of the repairs that are “immediately required” at the store spaces in their properties.
Over the final years of the Hudson’s Bay Company, the retailer was known to have practiced extreme deferred maintenance at many locations to reduce its operating costs amid its growing financial challenges.
Oxford Properties is requesting a high level of detail at this stage, including consultants and contractors retained to evaluate the repairs needed for each location, detailed breakdown of the cost to repair each location, floor plans and concept drawings for Liu’s new department store concept, and list of suppliers and service providers for the new retailer, as well as the name of the department store. It was more recently shared in news media reports that Liu intends to name the retailer after herself.
In a June 12 letter from Primaris REIT’s law firm to HBC’s legal counsel, Primaris outlined its opposition to Liu’s proposed lease takeover, citing her “inability to honour provisions of the lease related to continuous operation, lack of any relevant major department store experience, absence of any existing major department store business operations, absence of brand recognition, projections which are incapable of being met, understatement of repair and maintenance costs, and overstatement of projected revenue in at least years one and two.”
“By way of overview, Ms. Liu’s plans are, in our client’s view, predicated upon hope, optimism and not on experience in respect of the minimum timelines and costs to refurbish 28 locations, in various degrees of disrepair, in three provinces,” reads the letter by the lawyer for Primaris, noting that four store locations owned by Primaris are in a significant state of repair and cannot be conceivably be repaired within Liu’s three-month timeline — given the expected durations needed for planning, approvals, permits, construction, and product supply.
They also cited Target’s short-lived expansion into Canada as a cautionary example. The letter noted that, to their knowledge, there has been no successful case in recent North American history where a brand-new, full-scale department store chain has opened dozens of locations within just a few months — or even within a single year. Typically, new retailers open one or two stores annually, not 28 locations. Target’s entry into Canada was highlighted as an example by Primaris of the risks involved; despite having very strong brand recognition, a massive existing infrastructure with established suppliers and administrative support, and extensive planning, the U.S.-based retailer’s Canadian division still became insolvent and failed within two years.
Liu, in one of her emails to the presiding judge, shared that she has prepared $350 million in cash to undertake the work needed for the new department store openings.
By her own admission in this email, Liu wrote, “If I fail to pay rent within six months of operations, the landlords would have the right to reclaim the stores.”
“We are confident in our ability to succeed,” she added.
But for that confidence to translate into reality, both the landlords and especially the presiding judge must ultimately agree to give her the chance.