| Type | Subsidiary |
|---|---|
| Founded | May 2, 1670 |
| Headquarters | Simpson Tower Toronto, Ontario, Canada |
| Key people | Richard Baker, Governor |
| Revenue | $7.0 billion CAD ( $59.7 million FY 2009) |
| Employees | 70,000 |
| Parent | Hudson's Bay Trading Company |
| Divisions | The Bay Zellers Home Outfitters Fields |
| Website | hbc.com |
The Hudson's Bay Company (French: Compagnie de la Baie d'Hudson), abbreviated HBC, or "The Bay" ("La Baie" in French) is the oldest commercial corporation in North America and one of the oldest in the world. A fur trading business for much of its existence, today Hudson's Bay Company owns and operates retail stores throughout Canada. The company is headquartered in the Simpson Tower in Toronto, Ontario.[1]
The company was incorporated by English royal charter in 1670 as The Governor and Company of Adventurers of England trading into Hudson's Bay and functioned as the de facto government in parts of North America before European states and later the United States laid claim to those territories. It was at one time the largest landowner in the world, with Rupert's Land having 15% of North American acreage. From its long time 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 owns several Canadian retail chains including The Bay, Home Outfitters, and Fields. The Hudson's Bay Company Archives, a collection of the company's many records and maps, are located in Winnipeg, Manitoba.
The company is owned by Hudson's Bay Trading Company, the portfolio company of the United States private equity firm NRDC Equity Partners, which also owns Lord & Taylor, a high-end department store chain in the U.S.
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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 the Rhine. 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 1/3 the area of modern day Canada and stretching into the north central United States. The specific boundaries were unknown at the time. Rupert's Land would eventually be Canada's largest land purchase in the 1800s.
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 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 walking, being 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.
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. In March 1686, the French sent a raiding party under the Chevalier des Troyes over 1,300 km (810 mi) to capture the company's posts along James Bay. The French appointed Pierre Le Moyne d'Iberville, who had shown great heroism during the raids, as commander of the company's captured posts. In 1687 an English attempt to resettle Fort Albany failed due to ruses and deceptions by d'Iberville. After 1688 the two kingdoms were officially at war. D'Iberville raided Fort Severn in 1690 but did not attempt to raid the well defended local headquarters at York Factory. In 1693 the company recovered Fort Albany; d'Iberville captured York Factory in 1694, but the company recovered it the next year. In 1697, d'Iberville again commanded a French naval raid on York Factory. On the way to the fort, he defeated three ships of the Royal Navy in the Battle of Hudson's 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 the fort while pretending to be a much larger army, the French held all of the outposts except Fort Albany until 1713. (Fort Albany was again unsuccessfully attacked in 1709 by a small French and Indian force.) The economic consequences of the French possession to the company were significant; it did not pay any dividends for more than 20 years. See Anglo-French conflicts on Hudson Bay.
The Rupert's Land territory was ceded to the Kingdom of Great Britain (so named 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 York Factory and Prince of Wales Fort.
In its trade with native peoples, the Hudson's Bay Company exchanged wool blankets, called Hudson's Bay point blankets, for the beaver pelts trapped by aboriginal hunters. The number of indigo stripes (aka points) woven into the blankets identified its weight and size. An occasional misconception is that the number of stripes is related to its value in beaver pelts..[3]
A parallel may be drawn between HBC's control over Rupert's Land with the trade monopoly and government functions enjoyed by the Honourable East India Company over India during roughly the same period.
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 sq mi), 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 mi) 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 Sayer 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. 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 Métis 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.
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 1978, were converted to The Bay stores in 1991. In 1972, the company acquired the four-store Shop-Rite chain of catalogue stores. The chain was quickly expanded to 65 stores in Ontario, and closed in 1982 due to declining sales.[6] 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"; Consumers Distributing was left with a near monopoly on the format in Canada.
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. 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 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, the board named his widow Anita Zucker as HBC Governor and HBC Deputy-Governor Rob Johnston as CEO.[7]
In 2008, after Zucker's death, the company was sold to NRDC Equity Partners, the private equity firm of Purchase, New York. In the United States, NRDC Equity Partners operates Lord & Taylor, the oldest department store chain in the U.S. The Canadian and U.S. holdings are part of NRDC Equity Partners' portfolio company, Hudson's Bay Trading Company, as of the fall of 2008.
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.
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.[8]
The U.S. firm NRDC Equity Partners, LLC, owner of American department store chain Lord & Taylor, announced its purchase of the company on July 16, 2008.[9]
On January 13, 2011, HBC announced that U.S.-based discount retailer Target Corporation would purchase the lease agreements of up to 220 Zellers stores, which have not yet been identified, for C$1.825 billion.[10] Under the agreement, Zellers will initially sublease the properties, and continue to operate them as Zellers locations until at least early 2012. However, by 2014, 100 to 150 of the locations will be renovated and reopened under the Target banner, with the remaining acquired locations to be transferred to other retailers.[11] HBC has said it will operate the roughly 60 Zellers locations not chosen to be acquired by Target as part of a smaller Zellers chain operating in "specific communities".[12]
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 the monarch visits 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.[13] However, when the Company permanently moved its headquarters to Canada, the Charter was amended to remove the rent obligation.[14] Each of the four "rent ceremonies" took place in or around Winnipeg.
Current members of the board of directors of the Hudson's Bay Company are:[15]
Hudson’s Bay Company operated with a very rigid hierarchy when it came to its employees. This hierarchy essentially broke down into two levels; the officers and the servants. Comprising the officers were the factors, masters and chief traders, clerks and surgeons. The servants were the tradesmen, boatmen, and laborers. The officers essentially ran the fur trading posts. They had many duties which included supervising the workers in their trade posts, valuing the furs, and keeping trade and post records. In 1821, when Hudson’s Bay Company and the North West Company merged, the hierarchy became even stricter and the lines between officers and servants became virtually impossible to cross. Officers in charge of individual trading posts had much responsibility because they were directly in charge of enforcing the policies made by the governor of the company. One of these policies was the price of particular furs and trade goods. These prices were called the Official and Comparative Standards. Made-Beaver, the quality measurement of the pelt, was the denomination used by the Hudson’s Bay Company to define the Official and Comparative Standards. Because the governor was stationed in London, England, they needed to have reliable officers managing the trade posts halfway around the world. Because the fur trade was a very dynamic market, the governors of the HBC needed to have some form of flexibility when dealing with prices and traders. Price fluctuation was deferred to the officers in charge of the trade posts, and the head office recorded any difference between the company’s standard and that set by the individual officers. Overplus, or any excess revenue gained by officers was strictly documented to insure that it wasn’t being pocketed and taken from the company. This strict yet flexible hierarchy exemplifies how the Hudson’s Bay Company was able to be so successful while still having its central management and trade posts located so far apart.[16].[17]
From 1670 to 1970 the HBC Governors were British and based in London, United Kingdom. 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.
The Hudson's Bay Company is a parent company to several different retail and online stores, including:
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.[18]
| 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 | 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. |
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.
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 had been criticized for the way the 2008 Summer Olympics uniforms looked, 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.[19] Apparel for the 2010 Winter Olympics held in Vancouver prove to be extremely popular, particularly red-and-white mittens featuring a large maple leaf.
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