Hudson's Bay doesn't have to pay €40 mil. to landlord of failed Amsterdam flagship store
Hudson’s Bay does not have to compensate the owner of the Amsterdam building it launched its Dutch flagship store in for costs incurred to get a new tenant, the court in Amsterdam ruled. The owner of the building on the Rokin, the Swiss insurance company Zurich, had claimed 42 million euros from the Canadian department store chain, RTL Nieuws reports.
Hudson’s Bay opened a series of department stores in the Netherlands from 2017, starting with the flagship store on the Rokin. But it soon became apparent that there wasn’t much of a market for the department store chain in the Netherlands. In 2019, the Canadians closed the stores and had the Dutch subsidiary declared bankrupt.
Recently, the Amsterdam court ruled in a case brought against Hudson’s Bay by Zurich over the building on the Rokin in Amsterdam. The landlord incurred costs to get a new tenant in the building and wanted to claim them from Hudson’s Bay.
According to RTL Z, payment company Ayden signed a lease for the property in April 2020, but only after Zurich spent tens of millions of euros to lure the new tenant. Ayden didn’t have to pay rent for nearly two years, Zurich covered the bill of a 20 million euro renovation, and the property owner paid 2 million euros in furnishing costs.
Zurich wanted to recover those costs - 42 million euros in total - from Hudson's Bay. According to the property owner, the costs were necessary to re-let the building - something that saved the Canadian retail giant money because it didn’t have to fulfill the ten-year rental agreement.
Hudson’s Bay refused and brought the matter to court. The court in Amsterdam ruled in the retail chain’s favor. According to the court, Hudson’s Bay’s rental contract with Zurich does not state that the retail company is obliged to pay redevelopment costs or cover a rent-free period. If that had been Zurich’s intention, it should have explicitly included it in the contract.
Hudson’s Bay only has to pay Zurich for the two months between stopping paying rent and Ayden signing a lease. The amount is not yet clear. Zurich had demanded over 1 million euros for that period. But according to the judge, Hudson's Bay is entitled to the coronavirus discount that applied in early 2020.