The oldest company in North America is Hudson’s Bay Company, established by Royal Charter in 1670 and still in operation today. HBC, or “The Bay”, is responsible for a large part of the settlement of western Canada, and was one of the primary investors in both a cross-country railroad and the expansion of the Northwest Mounted Police. HBC trading forts have fended off invaders and secured supply lines in the most wild regions, helping the shape the destiny of this country over 344 years!
Today HBC owns The Bay upscale department stores, Home Outfitters, Lord & Taylor and Saks Fifth Avenue. The company has stalled its expansion in recent years as it weathers the recession and consolidates its share of the retail market, but it has managed to avoid costly mass layoffs and bankruptcy, the fate that met many of its competitors in 2008-2009. After 344 years, however, the odd financial recession is nothing to worry this giant of Canada’s retail landscape.
In 1670 a group of English investors asked King Charles II to grant them a charter to explore and set up a fur trading colony around the Hudson Bay region (today’s Manitoba, Ontario and Quebec). The King accepted, with 2% royalties going to the Crown, and the Hudson’s Bay Company was founded. At the time, with the annexation of the entire Hudson’s Bay region, the company became the single biggest landowner in the world. The HBC set up its operations at York Factory, on the Manitoba shores of the bay, and from there set out to monopolize the entire North American fur trade.
In the first 50 years, HBC established six trading forts around “Rupert’s Land”, the region surrounding Hudson’s Bay. French trappers and native First Nations did most of the trapping, bringing beaver, fox, wolf and bear furs to the various trading forts for payment. The forts would cure and store the furs and then once a year transport them to York Factory where they would be loaded onto a fleet of ships bound for England. These furs found their way across Europe and even to the Middle East, India and China! HBC reaped awesome profits with this lucrative fur trade, and with armed garrisons, highly-organized tranport networks and cut-throat prices were able to squeeze the French out of the fur industry altogether. The Hudson’s Bay Company, by the middle of the 18th Century, dominated the entire global fur trade.
In the middle of the 18th Century the Hudson’s Bay Company embarked on a program of aggressive expansion. The French defeat in the 7 Years’ War and the expulsion of the British from the 13 colonies following the American Revolution left a vacuum in the Canadas, of which HBC was only too happy to fill. The Treaty of Ultrecht, which ended French claims on North America, ceded all French commercial and military installations to the Hudson’s Bay Company. The French had spent two centuries exploring the continent and establishing trade routes for its fur industry. With one fell swoop, HBC acquired the entire lot.
HBC also changed its purchasing format to better profit from Native trappers. Instead of paying in cash or kind, they established the “wool blanket points” system, whereby HBC traded in signature wool blankets for pelts. Each blanket had a number of indigo stripes woven into them, which indicated its size and value. This allowed HBC to keep amazing profits and lower its overhead while exploiting the native labour force without them even being aware of it.
In 1779 HBC went public on the Montreal stock exchange, partly in response to its main competitor, the Northwest Company’s public offering. Although it is debated which company started offering stock first, the fact of the matter is that HBC is the oldest publicly-traded company in North America today.
By 1822 HBC had merged with its rival and was granted territorial rights to all of western Canada. The pre-established trade routes blazed by French explorers were exploited and a series of trading forts were set up all over the west. Some of these forts would go on to become bustling Canadian cities, like Fort Edmonton, Fort Victoria and Fort Vancouver.
By the middle of the 19th Century the Hudson’s Bay Company controlled the entire fur trade on the Pacific North West and was heavily involved in the Asian markets. Their western headquarters, at Fort Vancouver, was growing into a bustling port with tertiary industries springing up all around the old wooden fort. City streets were built, warehouses and shops sprung up and a housing boom ensued as thousands of people flocked to the new city to capitalize on the HBC trade to Asia.
To keep the trade alive and to integrate their far-flung empire, HBC heavily lobbied the new “Government of Canada” in 1867 to build a railroad across the country. HBC invested more than $50 million (about $2 billion today) into the Canada-Pacific railway and even supplied materials and labour. As cities sprung up around forts and the company invested in railroads, bridges and roads, HBC turned from a private enterprise into a nation builder. HBC was so influential in settling Canada’s west, in fact, that the government in Ottawa created the Northwest Mounted Police (today’s Royal Canadian Mounted Police) in part to protect HBC assets in the wild territories!
By the middle of the 19th Century HBC had more than 100,000 employees, 274 ocean-going ships, more than 1,000 soldiers under contract and had 7 board members serving as Members of Parliament in both Canada and Britain! It was the largest and most influential company in the British Empire, and was worth a staggering $1 billion (more than $500 billion today).
In 1869 the US government offered to purchase HBC for $10 million, an offer the company rightfully refused. It is unsure why the US government offered so little for such a large company, but ignorance of the true extent of HBC’s worth, as well as a touch of arrogance on the part of US traders, most definitely played a part.
Instead of selling to the Americans, HBC sold Rupert’s Land, which it had owned for 200 years, back to the British Crown for $12 million. Queen Victoria then gifted the land to the Canadian government, who then leased the land back to the HBC at cut-rate prices. HBC made huge profits from this single transaction and was able to expand into realms it had so far left alone: retail.
HBC established its first retail store in Langley, BC in 1859. It’s main purpose was to sell general-store items to this small mining town, but the operation grew to include fashions and new-fangled appliances. Realizing successful profits, the company opened stores in Victoria, Vancouver, Toronto, Calgary and Nelson. At first called “Hudson’s Bay Company Store”, the name was shortened to just “The Bay” and a Canadian retail giant was born.
The First World War interrupted HBC retail expansion, and it also severely crippled HBC shipbuilding as all new designs and new ships went to the war effort. In 1917 HBC sold off the remainder of its fleet and decided to concentrate on its retail and traditional fur operations.
After the war, in the early 1920’s, the company entered the new oil and gas industry. Always on the forefront of expansion, HBC founded Hudson’s Bay Oil and Gas (HBOG), which became the fourth largest petroleum supplier in North America until the 1980’s when the company sold all its oil assets to Dome Petroleum amid the gas crisis hysteria.
The 20th Century was a time of great change for HBC. The demand for furs had all but dried up by the time of the Second World War, and HBC fur trade and forts were only operating in northern Canada. Oil and gas were bringing in profits, and the Bay dabbled a little in the diesel train industry before selling off its assets there. The company instead turned to retail, and with more and more department stores opening, it became the main importer of fashions and accessories to the country.
HBC buyers scoured the runways of Paris and New York for the latest fashions, and travelled the world looking for the finest perfumes, and signed big deals with General Electric for home appliances. The result was that The Bay became known across Canada for being the place to shop for the latest and greatest of products. Fashion, appliances, furniture, decor, dishware, linens and cosmetics were all added to The Bay’s offerings. As more and more stores opened, the company became a giant in the retail industry.
In 1974 the company relocated its head office from Winnipeg to Toronto, building the Simpson Tower to house its various departmental offices. It also purchased the Shop-Rite chain of stores and in 1978 HBC purchased the Zeller’s chain of discount department stores. The Bay also purchased Simpsons and folded them into The Bay chain of stores. In 1978 The Bay made a bid to purchase US giant Sears, but was turned down. Instead HBC gained a significant share of Sears Canada operations.
By 1981 The Bay was a household name across Canada, but it was facing a serious debt problem. To balance its books and pay off debtors, the Bay sold off its oil and gas subsidiary, sold off any remaining rail and port assets it owned, and closed down the last of its 300-year fur trade operations in the Yukon. This allowed HBC to settle its debts but transformed the company into a retail-only enterprise. A history of innovation and aggressive expansion, however, would be brought to the highly-competitive retail market.
In the late 1990’s The Bay established Winner’s, a chain of discount clothing stores. In 2000 it set up Home Sense, a home design chain.
In 2006 HBC finally sold to the Americans, when billionaire Jerry Zucker offered to purchase the company for $15.25 per share. The resulting sale of North America’s oldest company for $1.1 billion shocked the retail world, but nothing changed with HBC. The company retained all its assets, its head office was still based in Toronto, and its original 1670 Charter was still proudly displayed in the lobby. All Jerry Zucker did was rake in the profits from this retail giant.
In 2013, in another shocking move, HBC purchased Saks Incorporated for $2.9 billion, giving the company a huge presence in the United States.
Today The Bay is going strong. Its stores are still operating and the company is still churning a profit. After 344 years in business, North America’s oldest company is still looking good.