Hudson’s Bay was a ‘zombie firm’ that was struggling to keep the lights on for years before its inevitable shuttering, one expert says – and Canada is home to many more.
Source: ‘Zombie firms’: Hudson’s Bay among Canadian businesses that are ‘severe drag’ to economy
from the reddit/r/canada thread:[expand]this is an example of the gold that i find at reddit (or fark, and previously boingboing, etc)[/expand]
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In Brief:
- According to Statistics Canada, the term “zombie firm” is used to describe economically underperforming businesses which are being kept alive by government and bank loans.
- Tom Goldsmith, founder and principal of Orbit Policy told BNN Bloomberg that many retail outlets have not responded innovatively in the face of competition. Goldsmith describes them as “mature firms that persist and are a severe drag to our economy.”
- A StatCan report from 2023 says zombie firms have been increasing over the past few decades in advanced economies like Canada’s, claiming that they influence the national productivity, subdue wages and restrain the growth of healthy firms.
- The report claims that between 5-7% of all Canadian businesses are zombies, which could potentially be the highest in the world.
- “…the share of zombies among publicly traded firms has steadily increased,” the report said, adding that between 18 to 36 per cent are publicly traded firms that fit the description of the zombies – most prevalent in the mining, oil and gas extraction sector.
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insert the standard rant about the text/graphics dichotomy...
