Toronto (Rajeev Sharma): — A legal battle over prime retail space at Toronto’s upscale Yorkdale Shopping Centre has ended in favour of mall owner Oxford Properties, preventing a discount department store from moving into the former Hudson’s Bay location.
In a ruling delivered Monday, Justice Jessica Kimmel denied approval for Les Ailes de la Mode — a retailer owned by Fairweather Ltd. — to assume the lease of the vacant Hudson’s Bay store. The judge raised concerns about the commercial viability of the proposed arrangement, stating there appeared to be a “lack of commercial soundness” in the transaction, making it difficult for the court to support the transfer.
The proposed lease assignment was introduced last year by FTI Consulting Canada Inc., which is overseeing a joint venture between Hudson’s Bay Company (HBC) and RioCan Real Estate Investment Trust. The partnership includes 12 properties, among them the three-level former HBC space at Yorkdale.
Hudson’s Bay filed for creditor protection in March 2025, leading to the joint venture being placed under receivership in June. Receivership is a court-supervised process in which a third party — in this case, FTI — is appointed to manage a financially troubled entity and attempt to recover funds for creditors.
RioCan, which holds a $75-million mortgage tied to the HBC lease at Yorkdale, had supported the deal as a way to reduce financial losses stemming from the department store’s collapse. Without a new tenant secured by August, control of the property could revert fully to Oxford Properties.
However, Oxford strongly opposed the proposed tenant, arguing that Les Ailes de la Mode did not align with Yorkdale’s high-end brand positioning. In court filings, Oxford representatives described Fairweather as financially unstable and suggested its stores lacked the premium presentation expected at the luxury shopping destination.
Nadia Corrado, a vice-president at Oxford, stated in an affidavit that allowing Fairweather to occupy such a prominent space — potentially for decades — would undermine years of strategic investment and negatively impact other tenants at the mall.
Following the court’s decision, Oxford spokesperson Daniel O’Donnell expressed satisfaction with the outcome. Fairweather declined to comment, while FTI indicated it could not provide statements due to its role as a court-appointed officer. RioCan did not immediately respond to media inquiries.
Les Ailes de la Mode, founded in the 1990s, operates a limited number of stores specializing in discounted apparel. The brand is controlled by retail executive Isaac Benitah through Fairweather Ltd. The Benitah family has also managed several other retail chains, including International Clothiers and home décor brands such as Bombay and Bowring. Recently, they acquired the rights to the Zellers trademark and have begun relaunching the brand.
RioCan had maintained that Fairweather possessed the operational capability and supplier relationships necessary to run a revamped mid- to high-end department store at Yorkdale. According to court documents, the proposed store would have featured branded and private-label products, including apparel for men, women, and children, footwear, home goods, accessories, and confectionery items. Suppliers such as Reebok, Chaps, Billabong, and Laura Ashley were reportedly prepared to provide merchandise.
The ruling leaves the future of the prominent retail space uncertain, as stakeholders continue efforts to mitigate the financial fallout from Hudson’s Bay’s restructuring.
