Court-appointed monitor Alvarez & Marsal overseeing Hudson’s Bay’s creditor protection case opposes the requirement for landlords to accept a B.C. billionaire, Ruby Liu’s, bid to purchase 28 of the retailer’s leases. Liu’s $69.1 million deal to acquire the leases has faced resistance from major lenders and most landlords, who are concerned about the feasibility of Liu’s plans to introduce dining, entertainment, and recreational spaces within the department stores.
Landlords argue that Liu’s proposed timelines and budgets are overly optimistic, given the extensive repairs and upgrades needed in the properties. Liu, however, contends that the properties were previously operated by Hudson’s Bay without the renovations and is willing to undertake the necessary repairs, even if they exceed her current budget.
The matter is set for a court hearing where arguments from both sides will be presented before a ruling is made by Judge Peter Osborne. Alvarez & Marsal, the final party to provide input on Liu’s deal, based its decision on an assessment of her business plan and various court filings.
The monitor raised concerns about Liu’s limited involvement in preparing the business plan, noting her lack of English proficiency and the late translation of the document into Mandarin. Central Walk, Liu’s company seeking to acquire the leases, was described as a start-up with no operational history or brand recognition in the retail sector.
Alvarez & Marsal highlighted the lack of experience in Liu’s leadership team and the incomplete efforts to hire former Hudson’s Bay executives. The monitor emphasized the risks associated with launching and managing 25 large department stores within the proposed timeline due to these factors.
Liu aims to open 19 stores within six months and the remaining six within 12 months, allocating $120 million for repairs and renovations. However, concerns were raised about her decision to no longer use J2 for supply chain management and the potential challenges in meeting the business plan’s demands.
Ultimately, Alvarez & Marsal’s report concluded that the ambitious timeline and inventory requirements pose significant risks to the successful execution of Liu’s proposed business plan.
