It should come as no surprise that in the course of almost 340 years HBC’s owners have left indelible marks on the Company’s history. 


Prince Rupert, engraving by
R. Dunkarton (after portrait by
Sir Peter Lely),
1813 HBCA P-173.

HBC’s roots lie in the development of modern commerce in the 16th and 17th centuries.  European economies were in transition, evolving from small family firms and private networks into large national and multinational enterprises established on the “modern” principle of capital recruited on the open market: the joint stock company. Joint stock companies became particularly popular in Britain. HBCwas founded in 1670; by 1688 there were 24 such enterprises operating. By 1695 another 150 had been created.


The Original Owners

HBC’s first owners were the original 17 investors. The HBC Charter not only lists them all by name, but refers to them as “the true and absolute Lords and Proprietors …”  This was not just overblown language.  Many were, in fact, lords – members of the English aristocracy. Others, primarily London businessmen, were knights. And of course the Company’s first Governor, Prince Rupert, was a member of the Royal Family.

 Although publicly held, the number of shareholders was relatively small.  Shares were passed down through families. Stock transfers, if any, were noted in the ledgers of the Company’s London offices; printed certificates were not issued until 1863.  During his time with HBC (1670-1688) Sir James Hayes owned the largest block of stock, at one point more than 20%. But the idea that a majority shareholder could influence the Company’s direction had yet to mature.  By the early 19th century things were very different.

Thomas Douglas, 5th Earl of
Selkirk © Public Domain
Library and Archives

Lord Selkirk

In 1807 Jean Wedderburn, sister of sugar trader Andrew Wedderburn, married Thomas Douglas, 5th Earl of Selkirk.  For some years Selkirk had been involved with a number of schemes to resettle destitute Scots and Irish on lands in Canada.  Interested in Red River as early as 1802 he was told by the British government that, as part of Rupert’s Land, the area was unavailable. By 1808, however, the loss of free markets in Europe due to the Napoleonic Wars had seriously reduced the value of HBC shares. Selkirk began to accumulate HBC stock.

He introduced Andrew Wedderburn into the Company that same year.  Wedderburn joined the governing Committee in 1809.  From 1839 - 1856, under his adopted name Colvile, he would serve as HBC Deputy Governor and Governor. Supported by the additional purchases of their kinsman John Halkett the three gained de facto control of the Company – narrowly beating out a syndicate of North West Company partners. Selkirk now had the influence to acquire the lands he needed.

In June 1811 Selkirk signed an agreement with HBC whereby, in return for founding an agricultural settlement at his own expense, he received some 1,140 hectares (16,000 square miles) – an area five times the size of Scotland – for the sum of 10 shillings.  For its part HBC established the validity of its charter rights to the region while launching a strategy of self-sufficiency designed to reduce the need to import its foodstuffs.

The problem was that the colony lands straddled the long-established route of the Nor’ Westers to the Athabaska. Selkirk’s Scots emigrants unwittingly wandered into ground zero in a contest for supremacy that would last a decade, cost many lives, ruin the NWC, destroy Selkirk’s personal fortune, and hasten his early death.  With the merger of the two fur trade rivals in 1821 the region settled down.  But by 1869 the tensions that grew between the competing interests of agriculture and the fur trade, not to mention the political aspirations of the Métis population that arose at Red River, would change HBC – and Canada – forever.

The International Financial Society

The next major shift in ownership occurred in 1863. A group calling itself the International Financial Society orchestrated a de facto takeover of HBC by acquiring a controlling interest. Led by railway man Edward Watkin, the IFS group was a consortium of London banking interests that bought up HBC stock by offering £300 for every £100 of stock – at a time when the market price was £190.  The new owners of the Company quickly increased HBC’s market capitalization issuing a prospectus that promised impressive returns by promoting settlement, minerals and a transcontinental telegraph – all based on selling or leveraging the Company’s vast land holdings. The share issue was a roaring success. The IFS took its profits and promptly folded, leaving HBC, for the first time in its corporate life, widely held. More than 1700 new shareholders expected a healthy return.

Reality, however, intervened. HBC’s new Committee soon realized that any serious attempt at promoting settlement would have to wait until there was a functioning civilian government in place.  In 1866 this sparked a shareholders’ revolt which complicated matters. It also served as a catalyst for the simmering question of what to do about HBC’s control of Rupert’s Land. As events unfolded the Company embarked on negotiations to sell its territories, first to Britain – which didn’t want them – and then to the United Province of Canada, which did not recognize HBC’s claim, and anyways had no means to purchase them. 

Confederation changed all that. Section 146 of the British North America Act in 1867 created a mechanism to allow for the future annexation of Rupert’s Land, the North West Territories and British Columbia (as the two Pacific colonies were known after 1866) to the new Canadian nation.  This led to final negotiations between Britain, HBC, and Canada which resulted in the Company signing of the Deed of Surrender in November 1869.

The first page of the Deed of Surrender. The National Archives of the UK, ref.CO42/694

The schedule from the Deed of Surrender. The National Archives of the UK, ref.CO42/694

The Deed was a liberating document for all concerned.  Britain was freed from most of its North American colonial encumbrances. HBC was freed from its role as de facto colonial administrator – a role that it had assumed reluctantly and one which, it can be argued, had diverted it from its core business. Canada meanwhile was freed both from British interference in its affairs and HBC limits to its continental expansion.

With a large and keenly motivated pool of owners, HBC was more than ready to reinvent itself as a commercial power.  As the fur trade declined and settlement of the west began, the transformation of its business from fur trading enterprise to retail powerhouse began.

Donald Smith (Lord Strathcona) at
North West River, ca 1860
William Hind/Library and Archives
Canada, Acc. No. 1988-245-1

Donald Smith

In 1914, 93 year-old HBC Governor Donald Alexander Smith, died. An employee for 75 years, Smith was a seminal personality in the history of both the Company and Canada. By turns he was a fur trader, real estate baron, railroad magnate, philanthropist, politician, diplomat, entrepreneur – and sometimes more than one of these at once.

During the 20 years that Smith’s work for HBC kept him in Labrador he began to accumulate stock in HBC and the Bank of Montreal. These canny investments, supplemented by years of savings, allowed him to become a financial player when he returned to Montreal in 1869.  Following the precedent set by Sir George Simpson, Smith acted as an agent to the fur trade’s senior officers – Chief Traders and Factors – by investing their earnings.  His reputation guaranteed him a growing pool of clients; by the early 1870s he directed no less than 37 different trusts, invested largely in HBC.  In this way he controlled an increasing block of shares.  When his clients retired or wanted to cash out, Smith would acquire their shares for himself. 

This sideline led to him becoming a Director of the Bank of Montreal and the creation of the Royal Trust Company, which he served as its first President. Smith grew increasingly rich and used his wealth – not to mention his access to generous lines of credit with the Bank – to buy up more HBC stock, especially when the Deed of Surrender, with its attendant cessation of the Company’s monopoly, depressed the price. In 1883 Smith used his position as majority shareholder to get himself elected to the London Committee – the first time a former “servant” had risen through the ranks to sit at the Board table.  Interviewed by The Times, Smith said: “My long connection with the … Company and being … the largest registered shareholder ... should offer to my fellow proprietors some guarantees that I am unlikely to take any course prejudicial to their interests.”

Smith used his position to influence the direction of HBC’s Land Department, the new business that dominated HBC’s results after 1870. This led to his appointment as Deputy Governor in 1888 and Governor a year later. Historians are divided as to whether his own or the Company’s best interests motivated him – a distinction he himself might well have not recognized. But a single fact serves to illustrate his far-reaching insight and business acumen.

In 1906, with Land Department sales making large profits, Smith announced that HBC would retain the mineral rights on all lands sold. Though he would not live to see it, this one decision set the stage for HBC’s emergence as a major oil and gas producer – a business that operated from 1926 – 1987.

The Shareholders’ Revolt

At the outbreak of WWI France contracted HBC as its transportation agent for the duration of the war.  The Company arranged credit and chartered the shipping needed to deliver the goods. In exchange it received a 1% commission, which provided a return of over £1.26 million over the next five years. HBC brought in Charles Vincent Sale, chairman of his family’s Newcastle-based coal shipping firm, to serve as a full time Deputy Governor with specific responsibility for the contract. His management of the business and its immense profitability led directly to his being named Governor in 1925.

Meanwhile the war delayed much of the retail expansion resulting from the Burbidge Report of 1910.  When that series of projects concluded with the opening of the new Winnipeg store in 1926, the retail business seemed headed for a golden age. And then the Depression struck.  The new stores were not yet profitable and had massive carrying costs. HBC was forced to increase gross margins to help meet overheads. Profits vanished.  Between 1929 – 1931 operating losses in the retail division grew by a factor of 11. Shareholders, used to predictable, steady returns, looked for a scapegoat. Led by minority rights champion Charles Louis Nordon, they focused their displeasure on Sale and the Board.

In 1928 Nordon accused the Board of mismanagement. Between 1920 – 1925 it had approved land sales which cost almost as much in taxes as they realized in revenue, a fact he characterized as a waste of potential future assets. He also complained that earnings for 1927, with an ROI of only 2.2% in a not-so-bad year, were pitiful. The Board ignored the criticism; with only 740 shares, Nordon was too small to worry about.  It was a serious miscalculation.

Nordon mobilized others, including Captain Victor Alexander Cazalet, who, with 40,5000 shares, was the largest shareholder.  The group criticized HBC’s financial performance, particularly the diversion of profits to a reserve account instead of paying dividends.  They also alleged Sale was guilty of sharp practice when in 1920 HBC had taken an unprofitable 15% interest – at a cost of £60,000 – in the Merchant Trading Company, a firm owned by Sale and his family.  In 1930 a special committee was struck which investigated Sale’s conduct.  Though vindicated, he announced his resignation at the Annual General Meeting.  This news, along with reported losses and the devaluation of the Company’s assets by almost £2M, caused the meeting to descend into chaos.  When the dust settled, Sale and five other directors had resigned, three Nordon-approved directors had been appointed and the search for a new Governor was underway. 

Governor General Roland Michener
signing the new Canadian Charter of
the Hudson's Bay Company, 1970
HBCA 1987/363-C-25/25B


In 1952 HBC was the target of an attempted grab for control. Its oil leases were the attraction for oilmen Max Bell of Calgary and L. R. Milner of Edmonton. Though the attempt failed, Bell’s criticisms, that the Company lacked “drive and progressive management”, and did “not make the most of [its] assets” were prescient.  By the early 1960s new appointees to the London Board Henry Benson and Lord Heyworth, recommended that the Board be entirely revamped, that the Company be immediately Canadianized and the Canadian Head Office be moved from Winnipeg to Toronto or Montreal.

The Board was aghast – even the Canadian members.  Things came to a head when then Governor Tony Keswick appointed Lord Cobbold, retiring Governor of the Bank of England, to the Board.  Historian Peter C. Newman characterized the appointment as “the naming of yet another distinguished non-executive director with little knowledge of Canada and less of retailing to a board already top-heavy with such creatures.”


Both Benson and Heyworth resigned but time would vindicate them. Resisting change meant that it would take another decade for the Company to move to Canada, thereby delaying its entry into the lucrative suburban shopping mall market. 

By 1965 the time had come.  Punishing new tax regulations affecting British overseas trading companies made the decision a no-brainer. The new taxes on foreign earned dividends would take some £800,000 from Canadian and British shareholders. Company documents reveal that in the preceding 20 years HBC had suffered a tax disadvantage of approx. £2.5M by retaining its U.K. tax residence.  Planning began to move the Company’s domicile to Canada, an undertaking that was finally completed in May, 1970.

Canadianization was more than just a change of residence.  It meant that a company held by the British for 300 years quickly became Canadian owned. In 1968 the Company had 30,000 common shareholders, of whom 85% were UK residents, 11% Canadian, and 4% other.  No single shareholder owned more than 10%.  In 1972 nearly 50% of shareholders were Canadians. By 1974 the number had risen to 54.5%

Kenneth Thomson

Ken Thomson acquired HBC in 1979, only three years after inheriting Thomson Corporation from his father Roy, Lord Thomson of Fleet.  At the time HBC was just coming off a spectacular period of growth that began with the building of the Hudson’s Bay Centre and new flagship at Bloor and Yonge in 1972 and ended with the acquisitions of Zellers and Simpsons in 1978.

Thomson needed an outlet for the huge profits being generated by his company’s investments in North Sea oil. HBC seemed like a perfect takeover target.  Thomson offered $31 a share – 36 % over market value – for 51% of the Company.  HBC’s Board was unsuccessful in persuading him to take less than 51%, and tried to hold out for a premium.  That was scuppered by a counter-bid from Galen Weston who offered $40 a share for 51%.  After one more round of bidding Thomson offered $37 for 75% of the stock – $276 million more than the original bid.  The bid was approved April 4th.  Thomson got two seats on the HBC board – one for himself and one for his chief strategist John Tory, Sr.

While HBC was now the country’s pre-eminent retailer it was also heavily in debt. In the early 1980s interest rates started to rise and the economy slowed.  HBC’s focus was more on sales and market share than on profit.  Earnings of $104 million in 1979 had become a loss of $107 million by 1984.  Thomson and Tory were appalled.  The Board launched a freeze of capital projects and instituted cuts to corporate overheads.  In the final analysis retrenchment and a focus on core business provided the only answer. HBC systematically began to divest of all non-retail assets in order to improve the bottom line. Among the first to go was the HBC’s last remaining stake in the oil and gas industry: 7.7 million preferred shares of Dome Petroleum, which sold for $455 million in 1983.

By 1987 the bulk of non-retail assets were gone. Gone too were the Simpsons-Sears catalogue business, sold for $211 million to Sears in 1983, as well as the Wholesale, Fur Trade and Northern Stores Departments, which had carried the HBC banner to the remotest corners of Canada.  But in less than a decade the business was on a stable foundation once again, as evidenced by a profit of $144 million in 1989, an increase of 389% from the prior year. In 1993 Ken Thomson’s stake of HBC was reduced to 25% and in 1997 the final 21% was sold. 

Jerry Zucker

In 2003 U.S. businessman Jerry Zucker disclosed that he had begun to accumulate HBC shares.  A self-made millionaire holding over 350 patents and running a number of companies, Zucker saw potential in HBC.  Yet despite his growing stake he was not invited to join the Board, which limited his ability to influence the Company’s direction.  In October 2005, as the majority shareholder with nearly 19% of the Company, he launched a hostile takeover bid of $14.75 a share through his holding company Maple Leaf Heritage Investments Acquisition Corp., valuing HBC at $1 billion.

Within days HBC announced cuts to management and administrative jobs as well as a reorganization to save about $45 million a year.  Despite this the Company subsequently posted a third-quarter loss of $50 million, compared with $8 million a year earlier.  Still the Board believed the offer to be undervalued and recommended shareholders reject it.  On December 20, 2005, Zucker extended the expiry date of the offer to January 31, 2006.

Meanwhile HBC solicited other offers. U.S. equity firm Cerberus Capital Management LP, and another group including Onex Corp. both expressed interest but were unwilling to meet the Zucker offer. When Maple Leaf Heritage Investments Acquisition Corp.  boosted its all-cash takeover offer to $15.25 a share and dropped earlier conditions, the deal was done.  Zucker also made an all-cash offer for all of the outstanding 7.5% unsubordinated debentures due Dec. 1, 2008. The new offer was unanimously endorsed by HBC’s Board which recommended its acceptance to the shareholders January 26, 2006. Over 10 million shares traded that day at a price of just over $15.

“As the company's largest shareholder for more than two years, we are aware of the tremendous opportunities available to HBC," said Zucker when the deal was announced.  Robert Johnston, Canadian-born vice president of strategy at Zucker’s holding company, Intertech Group Inc., said the new owner’s intent was to revive HBC, grow the business, improve customer satisfaction and strengthen the brand of the Canadian icon.

The deal was finalized March 2006, and Zucker took the company private, delisting it and thereby ending nearly 336 years as a public entity.  Canadians, always sensitive about their national identity, particularly as contrasted with Americans, were understandably wary.  But those who fulminated about the “loss” of Canadian ownership exhibited a lack of understanding of the Company’s history.  The Canadian ownership they purported to mourn was not quite 36 years old.  Interestingly, many Britons continue to mourn their loss of HBC in 1970 in a similar way.

Far more significant, historically speaking, was the transition to private status.  For a company which was established at the beginning of the era of modern business, the change from a public to a private entity changed how business is done.  Paradoxically, private status liberated HBC from the relentless focus of “the street” on quarterly performance and allowed necessary changes to occur. 


With the untimely death of Jerry Zucker in April 2008, HBC’s future once more seemed up in the air.  When NRDC Equity Partners acquired the Company in July, 2008, a new chapter in HBC’s history began.  The incoming Board appointed a new leadership comprised of top-notch retailers with proven international experience to marry the Zucker vision of superlative customer service with a clear new direction for HBC and its constituent banners. 

And what’s next?  Well, as is so often the case with history, perhaps a case of “what goes around, comes around.”  In September 2009 Governor Richard Baker announced that HBC would take the Company public again, which occurred in November 2012.

As for its Canadianness, the Company continues to confine its business to Canada, to operate nationally, to be a major employer of Canadians, to serve Canadians, and, as we have seen so dramatically during the recent Vancouver Winter Olympics, to reinforce Canadians’ vision of themselves and their country.  What’s more Canadian than that, eh?