Mall landlord Oxford Properties has won a fight to prevent an unwanted tenant from moving into the former Hudson’s Bay store at Toronto’s Yorkdale Shopping Centre.
In her ruling Monday, Judge Jessica Kimmel blocked the discount department store Les Ailes de la Mode, owned by Fairweather Ltd., from taking over the space.
“There is an apparent lack of commercial soundness to this arrangement that, at the very least, makes it difficult for the court to afford deference” to those wanting to sell the Yorkdale Hudson’s Bay Company (HBC) lease to Fairweather Ltd., she wrote.
That takeover plan was initially put forward last year by FTI Consulting Canada Inc., which is now overseeing a joint venture HBC and RioCan Real Estate Investment Trust had for 12 properties, including the three-floor former HBC space at Yorkdale.
FTI and RioCan saw the lease transfer as a chance to lessen the blow caused when the department store filed for creditor protection last March, leading the joint venture to be placed into receivership in June.
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Receivership is a legal process where a neutral third party — in this case, FTI — is appointed by a court to take control of a distressed company in order to recover amounts owing to creditors.
RioCan has a $75-million mortgage on the HBC lease and may experience a significant financial hit if it can’t find a new tenant by August, when the property could be turned back over to Yorkdale-owner Oxford Properties to use as it pleases again.
Oxford opposed FTI and RioCan’s plan, saying Les Ailes de la Mode was not suitable for its luxury mall.
It maintained the company is “not a financially healthy retailer” and its stores “look and feel temporary and down-market,” which is the antithesis of the posh vibe Yorkdale projects.
“I cannot overemphasize how inappropriate and detrimental it would be to have Fairweather occupy the most prominent premises at Yorkdale for even one year, much less the next 50 years as contemplated by the proposed Fairweather transaction,” Nadia Corrado, a vice president with Oxford, argued in a November affidavit.
“This would have the effect of compromising decades of significant investment and planning by Oxford and create a cascading negative effect for Yorkdale’s existing tenants.”
After receiving the judgment Monday, Oxford spokesperson Daniel O’Donnell said the company was “pleased with the outcome.”
The owners of Les Ailes de la Mode declined to comment, while FTI said it can’t provide statements to the media because it is a court officer.
RioCan did not immediately respond to a request for comment.
Les Ailes de la Mode is a Canadian department store started in the 1990s that now exists as a small handful of shops selling deeply discounted clothing.
It is owned by business mogul Isaac Benitah through Fairweather. He and his family members have also run home goods chains Wyrth, Bombay and Bowring, as well as apparel retailer International Clothiers. In recent months, they bought the rights to the Zellers trademarks from the defunct HBC and have revived the brand.
RioCan had argued that Fairweather had the “necessary expertise and operational and commercial arrangements in place to operate the Ailes store” at Yorkdale and was “a creditworthy counterparty.”
While the Benitahs have said little about their Les Ailes de la Mode plans, RioCan recently revealed in court filings that the retailer will also open two department stores in former HBC locations in Quebec City and Montreal in the first half of 2026.
RioCan said the version of Les Ailes de la Mode that Fairweather wanted to launch in Yorkdale would be a mid- to high-end department store, carrying a mix of branded and private-label merchandise, and offering a higher quality of goods than the Fairweather Group’s more value-oriented banners.
Merchandise sold at the store would include men’s, women’s and children’s apparel, women’s apparel, footwear, housewares and home decor, accessories and confectionary, RioCan said.
Suppliers ranging from Reebok to Chaps, Billabong and Laura Ashley had all committed to supplying Les Ailes de la Mode with merchandise, it said.
