Hudson's Bay Company

Hudson's Bay Company
Compagnie de la Baie d'Hudson

Type	Private
Founded	May 2, 1670
Headquarters	Toronto, Ontario, Canada
Key people	Richard Baker, Governor and CEO
Revenue	$7.0 billion CAD ( $59.7 million FY 2009)
Owner(s)	NRDC Equity Partners, via Hudson's Bay Trading Company
Employees	70,000
Divisions	The Bay Zellers Home Outfitters Fields
Website	www.hbc.com

The Hudson's Bay Company (French: Compagnie de la Baie d'Hudson), abbreviated HBC, is the oldest commercial corporation in North America and one of the oldest in the world. The company was incorporated by British royal charter in 1670 as The Governor and Company of Adventurers of England trading into Hudson's Bay. Now domiciled in Canada, it has legally adopted the more common shorter name.^[1]

It was once the de facto government in parts of North America before European-based colonies and states were established. It was at one time the largest landowner in the world, with Rupert's Land having 15% of North American acreage. From its longtime-headquarters at York Factory on Hudson Bay, the company controlled the fur trade throughout much of British-controlled North America for several centuries. Undertaking early exploration, its traders and trappers forged early relationships with many groups of First Nations/Native Americans. Its network of trading posts formed the nucleus for later official authority in many areas of Western Canada and the United States.

In the late 19th century, its vast territory became the largest component in the newly formed Dominion of Canada, in which the company was the largest private landowner. With the decline of the fur trade, the company evolved into a mercantile business selling vital goods to settlers in the Canadian West. Today the company is best known for its department stores throughout Canada. The Hudson's Bay Company Archives are located in Winnipeg, Manitoba.

The company is owned by Hudson's Bay Trading Company, the retail arm of the United States private equity firm NRDC Equity Partners, which also owned Lord & Taylor, a high-end department store chain in the U.S. (since acquired by Macy's.)

Contents 1 History 1.1 Early years 1.2 19th century 1.3 Modern operations 2 Rent obligation under charter 3 Corporate governance 3.1 Governors 4 Stores owned and operated by HBC 5 Historic rivals 6 Official Outfitter 7 See also 8 References 9 Further reading 10 External links

History

Early years

In the 17th century, the French had a monopoly on the Canadian fur trade. However, two French traders, Pierre-Esprit Radisson and Médard des Groseilliers, learned from the Cree that the best fur country was north and west of Lake Superior and that there was a "frozen sea" still further north. Correctly guessing that this was Hudson Bay, they sought French backing for a plan to set up a trading post on the Bay, thus reducing the cost of moving furs overland. But, the recently appointed French Secretary of State, Jean-Baptiste Colbert, was trying to promote farming in the colony and was opposed to exploration and trapping.

Radisson and des Groseilliers approached a group of businessmen in Boston, Massachusetts to help finance their explorations. The Bostonians agreed on the plan's merits, and brought the two to England to elicit financing. In 1668, the English commissioned two ships, the Nonsuch and the Eaglet, to explore possible trade into Hudson Bay. The Nonsuch was commanded by Captain Zachariah Gillam and accompanied by des Groseilliers, while the Eaglet was commanded by Captain William Stannard and accompanied by Radisson. On June 5, 1668, both ships left port at Deptford, England, but the Eaglet was forced to turn back off the coast of Ireland.

The Nonsuch continued to the southern portion of James Bay, where its explorers founded Fort Rupert at the mouth of the Rupert River. Both the fort and the river were named after the sponsor of the expedition, Prince Rupert of Bavaria. After a successful trading expedition over the winter of 1668–9, the Nonsuch returned to England.

The Governor and Company of Adventurers of England Trading into Hudson's Bay was incorporated on May 2, 1670, with a royal charter from King Charles II. The charter granted the company a monopoly over the Indian Trade, especially the fur trade, in the region watered by all rivers and streams flowing into Hudson Bay in northern Canada. The area was called Rupert's Land after Prince Rupert, the first director of the company and a first cousin of King Charles. This region constitutes 1.5 million square miles (3.9 million km²) in the drainage basin of Hudson Bay, comprising over one-third the area of modern-day Canada and stretching into the north central United States. The specific boundaries were unknown at the time.

The company founded its first headquarters at Fort Nelson at the mouth of the Nelson River in present-day northeastern Manitoba. The location afforded convenient access to the fort from the vast interior waterway systems of the Saskatchewan and Red rivers. The English quickly built other posts around the southern edge of Hudson Bay in Manitoba and present-day Ontario and Quebec, such as at Fort Severn, built in 1689. Called "factories" (because the "factor," i.e. a person acting as a mercantile agent and frequently specializing in one or a small number of commodities, did business from there), these posts operated in the manner of the Dutch fur trading operations in New Netherland.

The Hudson's Bay Company's second inland trading post was established by Samuel Hearne in 1774 in Cumberland House, Saskatchewan.^[2]

During the spring and summer, First Nations and Métis trappers did the vast majority of the animal trapping and pelt preparation. They travelled by canoe and were received at the fort to sell their pelts. In exchange they typically received metal tools and hunting gear, often imported by the company from Germany, the centre of inexpensive manufacturing in that era. Many Métis were better known as voyageurs during this era.

The early coastal factory (trading post) model contrasted with the system of the French, who established an extensive system of inland posts and sent traders to live among the tribes of the region. After war broke out in Europe in the 1680s between France and England, the two nations regularly sent expeditions to raid and capture each other's fur trading posts. In March 1686, the French sent a raiding party under Chevalier des Troyes over 1300 km (800 miles) to capture the company's posts along James Bay. The French appointed Pierre Le Moyne d'Iberville, who had shown extreme heroism during the raids, as commander of the company's captured posts. In 1697, d'Iberville commanded a French naval raid on the company's headquarters at York Factory. On the way to the fort, he defeated three ships of the Royal Navy in the Battle of the Bay, the largest naval battle in the history of the North American Arctic.

D'Iberville's depleted French force captured York Factory by a ruse; they laid siege to fort while pretending to be a much larger army. York Factory changed hands several times in the next decade. It was finally ceded permanently to what was by then the Kingdom of Great Britain (following the union of Scotland and England in 1707) in the 1713 Treaty of Utrecht. After the treaty, the company rebuilt York Factory as a brick star fort at the mouth of the nearby Hayes River, its present location. In 1782, during the American Revolutionary War, a French squadron under Jean-François de Galaup, comte de La Pérouse captured and demolished the fort.

In its trade with native peoples, the Hudson's Bay Company adopted issued wool blankets, called Hudson's Bay point blankets, in exchange for the beaver pelts trapped by aboriginal hunters. The number of indigo stripes (aka points) woven into the blankets identified its weight and size. A occasional misconception is that the number of points was related to its trade value.^[3]

A parallel may be drawn between HBC's control over Rupert's Land and the trade monopoly and government functions enjoyed by the Honourable East India Company over India during roughly the same period.

19th century

In 1821, the North West Company of Montreal and Hudson's Bay Company merged. Their combined territory was extended by a licence to the North-Western Territory, so it reached to the Arctic Ocean on the North and the Pacific Ocean on the West. Before the merger, the employees of the HBC, unlike the North West Company, did not participate in its profits. After the merger, with all operations under the management of Sir George Simpson (1826–1860), the company had a corps of commissioned officers, 25 chief factors and 28 chief traders, who shared in the profits of the company during the monopoly years. Its trade covered 7 770 000 km² (3,000,000 square miles), and it had 1,500 contract employees.^[4]:8–23

The progression for officers, together referred to as the Commissioned Gentlemen, was to enter the company as a fur trader. Typically, they were men who had the capital to invest in starting up their trading. They sought to be promoted to the rank of Chief Trader. A Chief Trader would be in charge of an individual post and was entitled to one share of the profits of the company. Chief Factors sat in council with the Governors and were the heads of districts. They were entitled to two shares of the profits or the losses of the company. The average income of a Chief Trader was £360 and that of a Chief Factor was £720.^[5]:690

Although the HBC maintained a monopoly on the fur trade during the early-mid 19th century, there was competition from James Sinclair and Andrew McDermot (Dermott), independent traders in the Red River Colony. They shipped furs by the Red River Trails to Norman Kittson^[4]:60–72 a buyer in the United States. In addition, Americans controlled the Maritime Fur Trade on the Northwest Coast until the 1840s.

Throughout the 1820s and 1830s, the HBC controlled nearly all trading operations in the Pacific Northwest, based out of the company headquarters at Fort Vancouver on the Columbia River. Although authority over the region was nominally shared by the United States and Britain through the Anglo-American Convention of 1818, company policy, enforced via Chief Factor John McLoughlin of the company's Columbia District, was to discourage U.S. settlement of the territory. The company's effective monopoly on trade virtually forbade any settlement in the region. It established Fort Boise in 1834 (in present-day southwestern Idaho) to compete with the American Fort Hall, 483 km (300 miles) to the east. In 1837 it purchased Fort Hall, also along the route of the Oregon Trail, where the outpost director displayed the abandoned wagons of discouraged settlers to those seeking to move west along the trail.

The company's stranglehold on the region was broken by the first successful large wagon train to reach Oregon in 1843, led by Marcus Whitman. In the years that followed, thousands of emigrants poured into the Willamette Valley. In 1846 the United States acquired full authority of the most settled areas of the Oregon Country south of the 49th parallel. McLoughlin, who had once turned away would-be settlers as company director, then welcomed them from his general store at Oregon City and was later proclaimed the "Father of Oregon". The company retains no presence today in what is now the United States portion of the Pacific Northwest.

During the 1820s and 1830s, HBC trappers were deeply involved in the early exploration and development of Northern California. Company trapping brigades were sent south from Fort Vancouver, along what became known as the Siskiyou Trail, into Northern California as far south as the San Francisco Bay Area. These trapping brigades in Northern California faced serious risks, and were often the first to explore relatively uncharted territory.

Between 1820 and 1870, HBC issued its own paper money. The notes, denominated in pounds sterling, were printed in London and issued at the York Factory, Fort Garry and the Red River colony.

The Guillaume Sayer Trial in 1849 contributed to the end of the HBC monopoly. Sayer, a Métis trapper and trader, was accused of the illegal trading of furs. The Court of Assiniboia brought the company to trial, before a jury of HBC officials and supporters. During the trial, a crowd of armed Métis men led by Louis Riel Sr. gathered outside the courtroom. They were ready to support their Métis brother peacefully or by force if necessary. Although Sayer was found guilty of illegal trade, having evaded the HBC monopoly, Judge Adam Thom did not levy a fine or punishment. Some accounts attributed that to the intimidating armed crowd gathered outside the courthouse. With the cry, Le commerce est libre! Le commerce est libre! ("Trade is free! Trade is free!"), the Metis loosened the HBC's previous control of the courts, which had enforced their monopoly on the settlers of Red River.

Another factor was the findings of the Palliser Expedition of 1857 to 1860, led by Captain John Palliser. Although he initially recommended against settlement of the region the report sparked a debate. That ended the myth publicized by the Hudson's Bay Company that the Canadian West was unfit for agricultural settlement. In 1863, the International Financial Society became the majority shareholders of the HBC.

In 1870 the government abolished the HBC monopoly and opened trade in the region to any entrepreneur. The company relinquished its ownership of Rupert's Land under the Rupert's Land Act 1868, enacted by the Parliament of the United Kingdom.

Modern operations

Hudson's Bay Company Stores first operated from the trading posts that were established across northern Canada. Today, this is the only part of the company operation remaining, in the form of department stores under the name The Bay. The first department store opened in Winnipeg, Manitoba in 1881 (this building is considered the flagship store). Others soon followed. Until quite recently, many Hudson's Bay Company stores were the only stores in remote towns. More recently, the stores in major downtown locations have been transformed into boutiques.

In 1970, on the 300th anniversary of the company, head office functions were transferred from London to Winnipeg. As the company expanded into the East, head office functions were moved to Toronto.

Since the Designer Depot was sold for lagging sales performance, today the company has four retail divisions: The Bay, Zellers, Home Outfitters, and Fields. Northern Stores are no longer operated by HBC, but by a corporation organized in 1987 under the name The North West Company. Simpson's department stores, which were acquired by Hudson's Bay Company in 1979, were converted to The Bay stores in 1991. In the 1970s and 1980s, HBC operated a chain of catalogue stores under the name Shop-Rite. In these stores, little merchandise was displayed; customers made their selections from catalogues, and staff would retrieve the merchandise from storerooms. This form of retailing, now largely disappeared, was referred to as "catalogue showroom".

The legacy of the HBC has been maintained in part by the detailed record-keeping and archiving of material by the Company. Before 1974, the records of the HBC were kept in the London office headquarters. The HBC opened an Archives department to researchers in 1931. In 1974, the Hudson's Bay Company Archives were transferred from London to their Canadian headquarters in Winnipeg. They granted public access to the collection the following year. In 1991 the archival records of the company were donated to the Archives of Manitoba in Winnipeg, Manitoba.

In 1987, HBC sold off its Canadian fur-auction business to Hudson's Bay Fur Sales Canada. (This company is now known as North American Fur Auctions). In 1991, the Bay agreed to stop selling fur in response to complaints from people opposed to killing animals for this purpose. In 1997, the Bay reopened its fur salons to meet the demand of consumers. Animal rights groups,, such as Freedom for Animals have been campaigning to get the Bay to stop selling furs.

In 1994, the HBC donated the Company records to the Province of Manitoba. The appraised value of the records was nearly $60 million. A foundation, funded through the tax savings resulting from the donation, was established to support the operations of the HBCA as a division of the Archives of Manitoba, along with other activities and programs. More than two kilometres of filed documents, as well as hundreds of microfilm reels, are now stored in a special climate-controlled vault in the Manitoba Archives Building.

In December 2003, Maple Leaf Heritage Investments, a Nova Scotia-based company created to acquire shares of Hudson's Bay Company, announced that it was considering making an offer to acquire all or some of the common shares of Hudson's Bay Company. Maple Leaf Heritage Investments is a subsidiary of B-Bay Inc. Its CEO and chairman is American businesswoman, Anita Zucker, widow of Jerry Zucker. He was the head of The InterTech Group Inc., a conglomerate that is the second-largest private firm in the state of South Carolina. Zucker had previously been the head of the Polymer Group, which acquired another Canadian institution, the Dominion Textile Company.

On January 26, 2006, HBC's board unanimously agreed to a bid of $15.25 CAD/share from Jerry Zucker, whose original bid was $14.75 CAD/share, ending a prolonged fight between HBC and Zucker. The South Carolina billionaire financier was a longtime HBC minority shareholder. In a March 9, 2006 press release, HBC announced that Jerry Zucker would replace George Heller as the new Governor and CEO, to become the first US citizen to lead the company. After Zucker's death from brain cancer, the board named his widow Anita Zucker as HBC Governor and HBC Deputy-Governor Rob Johnston as CEO.^[6]

In 2007, the Hudson's Bay Company Archives became part of the United Nations "Memory of the World" project, under UNESCO. The records covered HBC history from the founding of the company in 1670. The records contained business transactions, medical records, personal journals of officials, inventories, company reports, etc.

On March 2, 2005, the company was announced as the new clothing outfitter for the Canadian Olympic team. The $100 million deal means that The Bay will provide clothing for the 2006, 2008, 2010, and 2012 games. The previous Canadian Olympic wear-supplier, Roots Canada Ltd., ended its involvement with Canada's Olympic teams in 2004. HBC has been criticized for the way the uniforms look and where they are made. Roots ensured that the clothes were made in Canada using Canadian material, whereas HBC is producing the clothes in Canada and China.^[7]

Today's modern HBC has diversified into joint ventures and other types of business products. HBC has credit card, mortgage, and personal insurance branches. These other products and services are joint partnerships with other corporations, similar to what President's Choice Financial brands are to Loblaw Companies Limited. HBC also has other HBC Rewards corporate partners such as: Imperial Oil/Esso, M&M Meat Shops, Chapters/Indigo Books, Kelsey's/Montana's Restaurants, Thrifty Car Rental, Cineplex Entertainment Theatres, etc. HBC Rewards points can be redeemed in house or into corporate partners' gift cards and certificates. Points can also be converted to Air Miles.

HBC is involved in community and charity activities. The HBC Rewards Community Program help fund raise for community causes. HBC Foundation is a charity agency involved in social issues and service. HBC formerly sponsored the annual HBC Run for Canada, a series of public-participation runs and walks held across the country on Canada Day to raise funds for Canadian athletes. The company, however, discontinued this event as of 2009. [1]

The U.S. firm NRDC Equity Partners, LLC, parent company of American department store chains Lord & Taylor and Fortunoff, announced its purchase of the company on July 16, 2008.^[8]

CBC Newsworld did a news story on February 4, 2009, that stated HBC will layoff about 1000 workers to save expenses in the current world economic recession crisis of 2008-2009.

Rent obligation under charter

Under the charter forming the Hudson's Bay Company, the company was required to give two elk skins and two black beaver pelts to the English King, then Charles II, or his heirs, whenever they visit an area that was formerly Rupert's Land. The ceremony was first conducted with the Prince of Wales (the future Edward VIII) in 1927, then with King George VI in 1939, and last with his daughter, Queen Elizabeth II in 1959 and 1970. On the last such visit, the pelts were given in the form of two live beavers, which the Queen donated to the Winnipeg Zoo in Assiniboine Park.^[9] However, when the Company permanently moved its headquarters to Canada, the Charter was amended to remove the rent obligation.^[10] Each of the four "rent ceremonies" took place in or around Winnipeg.

It is, however, a persistent urban legend that the company would lose its charter if it did not give the monarch the rent any time they visit Western Canada, and so, it is alleged, there are furs and blankets stored at a Bay store in each city, with the manager prepared to rush to the airport and present them to the monarch should their plane touch down, even to refuel.

Corporate governance

Current members of the board of directors of the Hudson's Bay Company are:^[1]

• Bonnie Brooks
• Francis Casale
• Richard A. Baker
• Donald Watros
• A. Mark Foote

Governors

From 1670 to 1970 the HBC Governors were British and based in London, England. After 1970, HBC was a Canadian headquartered company with a Canadian as Governor. Since 2006, the HBC has been led by an American and is now American owned.

Stores owned and operated by HBC

The Hudson's Bay Company is a parent company to many different retail and online stores, including:

• The Bay
• Zellers
• Home Outfitters
• Fields
• hbc.com

From 2004 until 2008, HBC also owned and operated a small chain of off-price stores called Designer Depot. Similar to the Winners and Home Sense retail format, Designer Depot did not meet sales expectations, and its nine stores were sold.^[11]

In 2008, after Zucker's death, the company was sold to NRDC Equity Partners, the private equity firm of Purchase, New York-based National Realty & Development Corporation. In the United States, NRDC Equity Partners previously acquired Lord & Taylor, the oldest department store chain in the U.S., as well as the upscale jewelry and home furnishings retailer Fortunoff, which closed in spring 2009. The Canadian and U.S. holdings are parts of a newly-formed limited partnership, Hudson's Bay Trading Company, as of the fall of 2008.

Historic rivals

Years	Company	Fate
1551–1917	Muscovy Company	taken over by Soviet Union
1602–1800	Dutch East India Company	went bankrupt
1621–1791	Dutch West India Company	bought by Dutch government
1672–1752	Royal African Company	replaced by African Company of Merchants
1600–1858	Honourable East India Company	dissolved
1711–1850s	The South Sea Company	abolished
1808–1842	American Fur Company	folded
1779–1821	North West Company	merged with HBC
1799–1867	Russian American Company	folded with sale of Russian America to the U.S.

Official Outfitter

HBC was the official outfitter of clothing for members of the Canadian Olympic team in 1936, 1960, 1964, 1968, 2006, 2008 and 2010. The contract will end following the 2012 Summer Olympics in London.

See also

References

• Hearne, Samuel. A Journey to the Northern Ocean: The Adventures of Samuel Hearne. Victoria: Touchwood Editions, 2007.
• Van Kirk, Sylvia. Many Tender Ties: Women in Fur-Trade Society, 1670-1870. Winnipeg: Watson & Dwyer Pub., 1980.
• Van Kirk, Sylvia. "The Role of Native Women in the Fur Trade Society of WesternCanada, 1670-1830." Frontiers: A Journal of Women Studies 7, no. 3 (1984): 9-13.
• White, Bruce. M. "The Woman who Married a Beaver: Trade Patterns and Gender Roles in the Ojibwa Fur Trade." Ehtnohistory 46, no. 1 (Winter 1999): 109-147.

Further reading

External links

Hudson's Bay Trading Company, L.P. Hudson's Bay Company Canadian holdings:  The Bay | Fields | Zellers | Home Outfitters U.S. holdings:  Creative Design Studios | Lord & Taylor Former holdings:  North West Company (1779-1821) | Designer Depot (2004-2008) | Fortunoff (2008-2009) Related Topics:  HBC Rewards | Hudson's Bay Company Archives | NRDC Equity Partners | Rupert's Land

Chartered companies British Company of Merchant Adventurers of London · Company of Merchant Adventurers to New Lands · London and Bristol Company · African Company of Merchants · Muscovy Company · Spanish Company · Eastland Company · Morocco Company · East India Company · Levant Company · Virginia Company · French Company · Massachusetts Bay Company · Providence Island Company · Royal West Indian Company · Hudson's Bay Company · Royal African Company · Greenland Company · South Sea Company · Sierra Leone Company · New Zealand Company · Eastern Archipelago Company · Royal British Bank · North Borneo Company · Royal Niger Company · South Africa Company French Company of One Hundred Associates · Compagnie de l'Occident · Compagnie du Mississippi · Compagnie des Îles de l'Amérique · Compagnie des Indes Occidentales · Compagnie des Indes Orientales German Brandenburg African Company · Emden Company · West African Company · New Guinea Company · East Africa Company Portuguese Companhia da Guiné · Companhia de Moçambique · Companhia do Nyassa Low Countries Dutch East India Company · Nordic Company · New Netherland Company · Dutch West India Company · Ostend Company Scandinavian Danish East India Company · Danish West India Company · Royal Greenland · New Sweden Company · Swedish Africa Company · Swedish East India Company · Swedish West India Company · Swedish Levant Company