Judge blocks department store from moving into former HBC space at Yorkdale mall
TORONTO — A legal victory for mall landlord Oxford Properties! Judge Jessica Kimmel has ruled against the proposed takeover of the former Hudson's Bay store at Yorkdale Shopping Centre by discount department store Les Ailes de la Mode. The judge's decision highlights a potential lack of commercial viability, making it challenging for the court to support the lease transfer.
The plan was initially proposed by FTI Consulting Canada Inc., overseeing a joint venture between HBC and RioCan Real Estate Investment Trust for 12 properties, including the three-floor former HBC space at Yorkdale. FTI and RioCan saw the lease transfer as a way to mitigate the impact of the department store's creditor protection filing last March, leading to receivership in June.
Receivership is a legal process where a neutral third party, FTI, takes control to recover creditor amounts. RioCan holds a $75-million mortgage on the HBC lease and faces a significant financial risk if a new tenant isn't found by August, when the property could revert to Yorkdale owner Oxford Properties.
Oxford Properties strongly opposed the plan, arguing that Les Ailes de la Mode is not a financially stable retailer with temporary-looking stores. This contradicts Yorkdale's luxury image. Oxford's vice-president, Nadia Corrado, emphasized the potential harm to Yorkdale's existing tenants and Oxford's decades of investment.
Les Ailes de la Mode, a Canadian department store born in the 1990s, now operates a few shops selling deeply discounted clothing. Owned by business mogul Isaac Benitah through Fairweather, the company has also run home goods chains and apparel retailers. In recent months, they revived the Zellers brand, acquired from the defunct HBC.
RioCan argued that Fairweather had the necessary expertise and arrangements to operate the Ailes store at Yorkdale, but recent court filings revealed plans for two more department stores in Quebec City and Montreal in the first half of 2026.
The proposed Yorkdale store would be a mid- to high-end department store, offering a mix of branded and private-label merchandise, according to RioCan. However, this contradicts Fairweather's current value-oriented focus.
This legal battle highlights the challenges of balancing commercial interests and maintaining the prestige of prestigious shopping malls. As the story unfolds, the impact on Yorkdale's tenants and Oxford Properties' investment remains to be seen.
