Retail landscape strong despite Toys “R” Us, Hudson’s Bay failures: RioCan

TORONTO – The head of RioCan Real Estate Investment Trust says the recent financial troubles of retailers like Toys “R” Us and Hudson’s Bay are not representative of the wider retail landscape.

Chief executive Jonathan Gitlin said RioCan had only one location leased to Toys “R” Us, and that it had terminated it before the toy retailer filed for creditor protection at the start of February.

“On an overall basis, there’s no impact on RioCan, and I don’t think that Toys “R” Us serves as a leading indicator on the health of retail in general,” said Gitlin in an interview.

“I think they were a troubled brand that was purchased by, I would say an operator that didn’t have a good vision or capital to make it work, and ultimately it was not a big surprise that it failed.”

Ancaster, Ont.-based Putman Investments bought the business from Fairfax Financial Holdings Ltd. in 2021. The company, which also owns HMV, Sunrise Records and other retailers, was also behind a short-lived home goods venture called Rooms + Spaces. 

RioCan also took hundreds of millions of fair value losses last year after its joint venture with HBC collapsed as part of the retailer’s bankruptcy.

But the wider retail landscape is looking strong as grocers and others expand, especially, in discount offerings, said Gitlin.

“We’re seeing a significant shortage of good retail space even in the face of those HBC vacancies,” he said.

He said big grocers are expanding their discount brands, including by being more flexible on criteria like size, parking spaces and frontage as they grow in different ways than the past.

“Tenants are getting a lot more flexible, and a lot more creative with the types of space they take,” said Gitlin.

Tight vacancy levels across the retail market helped RioCan report a 37.3 per cent jump in new leasing rates. When combined with renewal rates, the blended leasing spread was 21.1 per cent in the fourth quarter.

RioCan reported a net income of $128.2 million for the quarter ending Dec. 31, up from $125.6 million in net income in the same period a year earlier.

Profits for the year amounted to $69.3 million, down from $473.5 million in 2024, due largely to writedowns related to the HBC collapse. 

RioCan says it has largely dealt with the properties it held in a joint venture with HBC, either by selling or foreclosing, with only its Yorkdale Mall location in Toronto still in contention. 

A judge earlier in February blocked RioCan’s plans to transfer the lease of the former HBC store at Yorkdale to discount department store Les Ailes de la Mode.

Oxford Properties had challenged the transfer, saying Les Ailes de la Mode was not suitable for its luxury mall.

Gitlin said the company is still considering next steps.

“You can never predict a court’s outcome, and that’s why we were being quite prudent and conservative in taking these provisions in advance of that ruling. So whatever happens, it’ll have no material impact on RioCan one way or the other.”

This report by The Canadian Press was first published Feb. 18, 2026.

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