His Highness Prince Rupert by Studio of Anthony van Dyck, n.d.
The Fur Trade
Two centuries before Confederation a pair of resourceful Frenchmen named Radisson and des Groseilliers discovered a wealth of fur in the interior of the continent - north and west of the Great Lakes - accessible via the great inland sea that is Hudson Bay. Despite their success French and American interests would not back them. It took the vision and connections of Prince Rupert, cousin of King Charles II, to acquire the Royal Charter which, in May, 1670 granted the lands of the Hudson Bay watershed to "the Governor and Company of Adventurers of England trading into Hudson Bay."
Its first century of operation found HBC firmly ensconced in a few forts and posts around the shores of James and Hudson Bays. Natives brought furs annually to these locations to barter for manufactured goods such as knives, kettles, beads, needles, and blankets. By the late 18th c. competition forced HBC to expand into the interior. A string of posts grew up along the great river networks of the west foreshadowing the modern cities that would succeed them: Winnipeg, Calgary, Edmonton.
In 1821 HBC merged with its most successful rival, the North West Company based in Montreal. The resulting commercial enterprise now spanned the continent - all the way to the Pacific Northwest (modern-day Oregon, Washington and British Columbia) and the North (Alaska, the Yukon, Northwest Territories and Nunavut). The merger also set the pattern of the Company's growth, being the first of a series of notable acquisitions.
HBC Klondike gold rush era advertisement
The Rise of Retail
By the end of the 19th c. changing fashion tastes contributed to the fur trade losing importance. Western settlement and the Gold Rush quickly introduced a new type of client to HBC - one that shopped with cash and not with skins. With the Deed of Surrender in 1870 between HBC and Canada, HBC yielded sovereignty over its traditional territories to the new country. The retail era had begun. The Company's focus began to shift as it concentrated on transforming trading posts into saleshops, stocked with a wider variety of goods than ever before.
In 1912, following advice from one of its directors who was with Harrods department store in London, HBC began an aggressive modernization program. The resulting "original six" Hudson's Bay Company department stores, in Victoria, Vancouver, Edmonton, Calgary, Saskatoon and Winnipeg, are the legacy of this period.
Retail expansion across the country would finally be achieved by a series of strategic acquisitions: Cairns (Saskatoon: 1921), Morgan's (Montreal, Ottawa, Toronto: 1960) and Freiman's (Ottawa: 1972 ).
The growth of retail spurred HBC into a wide variety of commercial pursuits. Liquor, canned salmon, coffee, tea and tobacco were all lines that supplemented traditional fur and retail and helped to establish a thriving wholesale business. Large holdings of land negotiated as part of the Deed of Surrender took the Company into real estate. The sale of homesteads to newly-arrived settlers would later evolve into a full-scale interest in commercial property holdings and development. Shipping and natural resources, particularly oil and gas, were other important sidelines.
HBC store, Temagami, Ontario, Bear Island, 1941
Focus on Retail
In 1970, coincident with its 300th anniversary, HBC became a Canadian corporation. The pace of retail acquisition increased with takeovers of Zellers / Fields (1978), Simpsons (1978), and Robinson's (1979). However, the economic downturn of the 1980s left the Company with major debt and caused HBC to rethink its priorities and, like many other firms, return to its core business. Non-strategic business assets such as the Fur Trade, Wholesale and Northern Stores departments were sold in 1987 as was the Company's last natural resources holding, Roxy Petroleum. Strategic expansion to strengthen its share of the market continued with the acquisition of Towers/Bonimart (1990), Woodward's (1993), and Kmart Canada (1998).
Since then HBC has explored new shopping channels and ways of doing business. Club Z, the Company's first customer loyalty program, was launched in 1986. In 2001 it was superseded by HBC Rewards. Specialty arrived with the opening of Home Outfitters in 1999. Online shopping was introduced with the launch of hbc.com in 2000. And the off-price segment of the market was covered by Designer Depot / Style Depot, which operated from 2004 - 2008. In 2003 HBC Signature, a private brand inspired by the Company's unique heritage, was introduced. And in 2005 HBC was chosen Premier National Partner of the Vancouver Organizing Committee for the 2010 Olympic and Paralympic Winter Games. The partnership, which runs from 2005 until 2020, makes HBC the Official Department Store Sponsor and General Merchandise Department Store Operator in Canada.
Today, Hudson’s Bay Company (TSX: HBC) is one of the fastest-growing department store retailers in the world, based on its successful formula of driving the performance of high quality stores and their all-channel offerings, unlocking the value of real estate holdings and growing through acquisitions. With the recent completion of its acquisition of GALERIA Kaufhof Group, HBC’s portfolio today includes eight banners, in formats ranging from luxury to better department stores to off price, with more than 460 stores and 65,000 employees around the world.
In North America, HBC’s leading banners include Hudson’s Bay, Lord & Taylor, Saks Fifth Avenue and Saks OFF 5TH, along with Home Outfitters. In Europe, its banners include GALERIA Kaufhof, the largest department store group in Germany, Belgium’s only department store group Galeria INNO, as well as Sportarena.
HBC has significant investments in real estate joint ventures. It has partnered with Simon Property Group Inc. in HBS Global Properties Joint Venture, which owns properties in the United States and Germany. In Canada, it has partnered with RioCan Real Estate Investment Trust in the RioCan-HBC Joint Venture.
The 21st century finds HBC well into its fourth century of retailing in Canada. Proof positive, if any were needed, of the aptness of HBC's proud claim:
Canada's Merchants Since 1670.