The fall of an empire

There’s a touch of irony that in the same year Canadian sovereignty is increasingly threatened by an American president, the Hudson’s Bay Company — one of the world’s oldest corporations — has filed for bankruptcy protection. It will likely close at least half of its 80 stores, but with no guarantee it will emerge in a healthy state, able to rebound.

On May 2, 1670, The Governor and Company of Adventurers of England, trading into Hudson’s Bay, was given a royal charter to trade in all lands that drained into Hudson’s Bay, 3.9 million km² of land in the heart of the North American continent, in order to compete with the lucrative French fur trade in the St. Lawrence basin. The new company had monopolistic commercial control of what was then called Rupert’s Land: the entirety of present-day Manitoba, most of Saskatchewan and Northern Ontario, a significant part of present-day Quebec, Alberta, and Nunavut, and even parts of what eventually became Minnesota and North Dakota.

Of course, this new monopoly, which quickly became known as simply the Hudson’s Bay Company (HBC), was created without consent or consultation with the many First Nations and Inuit communities. In the early days of trade, however, HBC relied on trading with First Nations for the valuable fur trades. It established forts and factories (trading posts) throughout the northwest, establishing places such as Moose Factory and Fort Albany that remain to this day.

In later years, HBC claimed a trading monopoly on lands draining into the Pacific Ocean; it also brought in missionaries to convert Indigenous peoples. (Its monopoly was challenged by new entrants such as the North West Company, which eventually merged with HBC after violent skirmishes over trading territorial rights.)

HBC’s vast networks of forts and trading posts, particularly Fort Garry (now Winnipeg) led towards the full colonization of western and northern Canada. In 1870, with the decline of the fur trade HBC relinquished control of Rupert’s Land to the new Dominion of Canada, which led immediately to the creation of the Northwest Territories, followed quickly by the Red River Rebellion and the creation of the Province of Manitoba.

HBC continued as a fur and goods trading company and it was still the only retailer in remote western and northern communities. In larger cities like Vancouver, Winnipeg, Edmonton, and Calgary, it established new department stores. In smaller communities, especially in the north, it took full advantage of its dominant position, and Northern Stores became notorious for high prices (in 1987, HBC sold off its Northern Stores division). HBC continued to exploit Canada’s natural resources — it even had an oil and gas subsidiary between 1926 and 1982.

In 1960, HBC focused almost entirely on its department store empire, acquiring the Montreal-based Morgan’s chain, competing head-on with Eaton’s and Simpsons-Sears. In the 1970s and 1980s, it also scooped up discount chain Zellers, Simpson’s stores (after its split from Sears Canada), Ottawa-based Freimans, and Hamilton-based Robinson’s, eventually rebranding those stores as “The Bay.” Finally in 1993, it acquired Vancouver-based Woodward’s. During this time, it sold off the Northern stores and the oil company. In the late 1990s, it launched the Home Outfitters big-box chain. The Zellers chain expanded under HBC ownership, first acquiring the competing Towers discount chain in 1991 and K-Mart’s Canadian stores in 1998.

Though the flagship stores still proudly proclaimed the May 2, 1670 incorporation date, few thought about the long and checkered history of the company. My first memories of The Bay’s retail empire were of the Simpson’s store close to where we lived in Brampton. Simpson’s was the flagship anchor of Shoppers World, a once-vibrant mall. I also knew Simpson’s from the flagship Queen Street store in Downtown Toronto, famous for its toy section, Christmas window displays, and of course, the TVO children’s program Today’s Special. (The most memorable episodes for me, a young, budding urbanist, dealt with a fictionalized closure and demolition of the store, before a heritage plaque uncovered during the move out saved the day.)

The Shoppers World Simpson’s store, like the rest of the banner, was converted to “The Bay” in 1991. In 2007 the store closed, not long after I moved to my own apartment in Toronto. (I still have some of the chinaware I purchased at that Bay store before I moved to my own place.) But as I worked, and later lived, in Downtown Toronto, I found the Queen Street store very useful for casual clothes shopping and the occasional big-ticket item.

Though HBC was sold to a private equity firm in 2008, under CEO Bonnie Brooks’ leadership, there was still life in the department store, with leading stores like the Queen Street flagship upgraded. The fifth floor was a great place to browse for men’s clothes; the seventh floor had an excellent kitchenware department. HBC persisted through the bankruptcy of Eaton’s in 1997-1999 as well the wind-down of Sears Canada that began in 2012 (when it began selling the leases of its urban flagships, including former Eaton’s stores) and concluded in 2018.

But private equity did what private equity does best: it began selling off the assets and closing down stores, just as Sears did in its last decade. The Zellers discount department store chain was discontinued, with the majority of store leases sold to the ill-fated Target Canada operation in 2011. The Home Outfitters stores were closed in 2019. Real estate was sold off, with HBC leasing back the properties. For example, the Queen Street store was sold to real estate developer Cadillac Fairview — who owns the adjacent Eaton Centre mall — for $650 million in 2014.

In the last few years, it became clear that the department store chain was in decline. Though pandemic restrictions in 2020 and 2021 had a major effect, the downtown stores also lost office worker patronage. Suppliers were having trouble getting paid and were seizing merchandise at several stores; escalators and elevators were put out of service, and store hours were reduced at most locations.

The loss of Canada’s last department store is unfortunate, but it comes as no surprise given the way private equity sucks once-proud businesses dry. The evidence was impossible to miss. How could customers be lured back when escalators were blocked off, marketing non-existent, and store opening hours scaled back? Not even Sears turned off the escalators in its last years.

I suspect, given the company’s 355-year history, a vestige of HBC will live on, especially in an era of renewed Canadian nationalist. Another business will certainly purchase the name and brand to continue selling the famous point blankets. Though the Queen Street store will certainly be redeveloped by Cadillac Fairview, strict heritage considerations will prevent its complete demolition. The Downtown Winnipeg store, closed in 2020, is already being repurposed into a new hub for Manitoba’s First Nations.

But it will remain a true shame, as I have always felt there was still a place for a full-service department store in Canada. It only needed to be well managed, relevant, and cared for.