Court Halts Department Store’s Move into Former HBC Space at Yorkdale Mall

The ongoing developments at Yorkdale Shopping Centre have taken a significant turn. Toronto’s Oxford Properties has successfully halted the entry of a discount department store into the former Hudson’s Bay Company (HBC) space. A recent ruling from Judge Jessica Kimmel blocked Les Ailes de la Mode, owned by Fairweather Ltd., from leasing this prominent retail location.

Court Ruling on Les Ailes de la Mode

The court’s decision reflected concerns over the commercial viability of the proposed arrangement. Judge Kimmel expressed doubt about the financial soundness of allowing Les Ailes de la Mode to operate in such a prestigious location.

The Background of the Lease Dispute

The initial proposal for the lease transfer emerged last year through FTI Consulting Canada Inc. FTI was overseeing a joint venture between HBC and RioCan Real Estate Investment Trust, which included the three-story HBC space at Yorkdale. FTI and RioCan viewed the lease transfer as a solution following HBC’s creditor protection filing in March and subsequent receivership in June.

Receivership entails a court-appointed neutral party, in this case, FTI, managing a distressed company to recover outstanding debts. RioCan faces pressure with a $75 million mortgage on the HBC lease. If a new tenant isn’t secured by August, the property will revert to Oxford, allowing them to utilize it as they see fit.

Oxford Properties’ Opposition

Oxford Properties was strongly against the application. They argued that Les Ailes de la Mode’s presence would clash with Yorkdale’s luxury branding. Nadia Corrado, an Oxford vice-president, stated that allowing Fairweather to occupy the prime retail space could undermine years of investment and planning.

About Les Ailes de la Mode

• Les Ailes de la Mode is a Canadian discount department store established in the 1990s.
• It is known for selling discounted clothing through a limited number of locations.
• Isaac Benitah owns the brand, as part of his Fairweather umbrella, which includes several other retail chains.

In a recent court filing, RioCan claimed that Fairweather was equipped to operate the new Yorkdale store. They highlighted their extensive retail experience as a creditworthy asset for this new venture.

Future Plans for Les Ailes de la Mode

Although publicly silent on specific plans for Les Ailes de la Mode at Yorkdale, RioCan disclosed that the retailer would launch two additional stores in Quebec City and Montreal by mid-2026. The envisioned Yorkdale store is aimed at the mid- to high-end market, offering a diverse range of branded and private-label merchandise, including apparel and home goods.

Several suppliers, including well-known brands like Reebok and Laura Ashley, have committed to providing products for the store.

This situation continues to evolve as parties navigate the complexities of retail space utilization in Toronto’s luxury shopping landscape. Updates will follow as the scenario develops at Yorkdale Shopping Centre.