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The store plaque at Toronto's downtown Hudson's Bay store, Friday, Oct. 28, 2005. U.S. (CP Photo/Derek Oliver)
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INDEPTH: THE BAY
The Hudson's Bay Company
CBC News Online | July 16, 2008
It's the oldest corporation in Canada - the second-oldest in North America. And it now has another American owner, NRDC Equity Partners, the parent of upscale U.S. chain Lord & Taylor.
The company was incorporated on May 2, 1670, when King Charles II signed the charter granting the company exclusive trading rights to all the land in the Hudson Bay watershed – a mass that amounts to about a third of present-day Canada.
Two explorers were instrumental in getting the company off the ground. Pierre-Esprit Radisson and Médard des Groseilliers learned from the Cree that there was land much further north of the traditional territory the French had focused on for the fur trade.
They figured the land bordered on Hudson Bay – and they wanted to take the fur trading industry there. Having access to open water would make it much cheaper to transport furs to lucrative European markets than dragging their goods overland to ports on the St. Lawrence River.
But Radisson and Des Groseillers couldn't get France to finance their plans. So they went to the English.
The company's first major place of business was established at Fort Nelson, at the mouth of the Nelson River in what would become northern Manitoba. Here, the company offered tools and blankets to Indians in exchange for furs. Alcohol was another favoured currency.
By 1684, the company had established trading posts along the shores of Hudson Bay at Moose Factory, Fort Albany, Severn House and York Factory.
The charter that established the Hudson's Bay Company included a monopoly on the fur trading business in the Hudson Bay watershed. The monopoly lasted until 1870, when the company sold the land to the government of Canada.
By 1783, the North West Company had become the major competitor in the fur business for the Hudson's Bay Company. It controlled the trade in land north and west of its competitor's territory. The company's fur depot was located in Lachine, Que., near Montreal.
In 1821, the two companies merged, controlling the fur trade over one-quarter of North America's land mass. That monopoly held for much of the 19th century.
The Hudson's Bay Company didn't get into selling goods to the average Canadian until 1881, when its first mail order catalogue was published. Three years later, another Canadian company would take the mail order catalogue and turn it not only into a way of business, but a way of life. The T. Eaton Company would dominate the catalogue business for the next 100 years – but would not survive long after shipping out its last mail order.
In 1907, the Hudson's Bay Company established a wholesale division and got into the business of selling liquor, tobacco, coffee, tea, confectionary and blankets. Two years later, Richard Burbridge, an executive from Harrods department store in London, toured Hudson's Bay retail stores in Canada. He recommended the company divide its operations into three separate departments: fur trade, land sales and retail.
By 1913, the company was opening big downtown department stores. The first two were in Edmonton and Calgary.
Over the next few decades, the company would expand its retail operations and eventually get out of land sales and – by 1987 – it stopped acquiring fur pelts. Between 1991 and 1997, the company stopped selling furs completely, in response to pressure from animal rights groups. But it reopened its fur salons in 1997, in response to an increased demand for furs.
 Inside a Hudson's Bay store, Oct. 28, 2005. (CP Photo/Derek Oliver)
Other ventures over the years included selling Prairie farmland to settlers, running oil and gas companies, engaging in property development and dabbling in businesses ranging from liquor distilling to travel agencies, credit bureaus and auction houses.
For the first 300 years of the company's existence, its operations were run from head offices in London. It wasn't until 1970 that Canada's oldest company officially moved its headquarters to Winnipeg, to run the company closer to where it conducted its business. Seven years later, the headquarters moved again, this time to Toronto.
The 1970s marked a period of retail expansion for The Bay. It bought companies like Ottawa retailer A.J. Freiman, Shop-Rite catalogue stores, Zeller's, Fields and Simpson's. In the 1990s, it acquired the Towers group, Vancouver-based Woodward's department stores and Kmart Canada.
The Bay responded to changes in the retail environment by launching specialty stores such as Home Outfitters and Designer Depot.
When Eaton's went under in 1999, the Bay was the last of the big Canadian department stores still in business.
In recent years, it has been struggling. HBC shares were worth as much as $38 in 1997. By 2003, they were down to $9. That's when American businessman Jerry Zucker began accumulating shares.
In October 2005, Zucker announced a takeover offer for HBC: $14.75 in cash for each share. Shares soared to $15.35 by the end of that day. In November, the HBC board rejected the offer as too low.
Zucker continued to acquire shares and HBC fielded informal offers from other companies. In January 2006, Zucker had 19.9 per cent of the company's shares and increased his offer to $15.25 per share. The HBC board accepted the offer.
In January 2006, Zucker took control of HBC, and in March of that year he assumed the posts of governor and chief executive officer, becoming the first American to head the Canadian company.
Zucker ran HBC until his death in April 2008 of cancer. The post of governor of HBC passed to his wife, Anna, who became the first female governor in the company's history.
Although Zucker said she would continue to run the company, there was speculation in published reports that HBC might be sold.
In early July 2008, NRDC Equity Partners, the owners of 47-store upscale Lord & Taylor chain, emerged as a possible buyer of HBC.
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