Canada: Up from Furs

More frontier adventure is packed into the corporate history of the Hudson’s Bay Co. than into all of Kenneth Roberts’ novels. In the course of its 292 years existence, “the Bay” has fought shooting wars with the French over fur trapping in Eastern Canada, and tussled with the U.S. over the Oregon Territory. To look at the remodeled Winnipeg warehouse that is the company’s operating headquarters, or to listen to its board of directors ceremoniously called to order in London as ”the Annual General Court of the Governor and Company of Adventurers of England trading into Hudson’s Bay,” one might think that the Bay is a historic relic. In fact, it is one of the most aggressive and up-to-the-minute firms in Canada.

Best Procurable. Chartered in 1670 by Charles II, the Bay started out bartering with Indians and Eskimos for beaver pelts, which were all the rage for men’s hats at the time—and as a matter of royal convenience the company was put in charge of running Canada. After it sold off most of its vast landholdings to the fledgling government of Canada 93 years ago, the company went steadily downhill until arrogant, able Philip Alfred Chester took over as general manager in 1931. By the time he retired in 1959, Chester had converted the Bay from a mere fur trader into Canada’s third largest retailer.* There are now big Bay department stores in Winnipeg, Saskatoon, Calgary, Red Deer, Edmonton, Vancouver and Victoria, as well as 33 smaller “Bay Stores” in cities under 30,000 population, 185 “Northern Stores” in upcountry towns, and 30 trading outposts, nearly all above the Arctic Circle.

Chester’s expansionary drive has been continued by his successor as managing director, handsome James Richard Murray, 45, who joined the Bay after six years in Canada’s Foreign Service. (Though 76% of the Bay’s stock is still British-owned, eight of its 15 directors and most of its top executives are Canadian.) Two years ago, Murray moved the Bay into Eastern Canada’s large cities by merging with the ten-store Henry Morgan & Co., Ltd. retail chain. The Bay also has a network of 16 wholesale houses, oil and gas rights on more than 15 million acres in central Canada, lucrative fur auction houses in New York, Montreal and London, and a tidy U.S.. Canadian and British business in a connoisseur’s Scotch whisky modestly called “Best Procurable.” The Bay’s profits last year were an alltime high of $8,893,000 on record gross revenue of $294,406,000, and this year looks to be even better.

Survival Test. So sharply has the Bay changed that when Chester wanted to give his protégé Murray the toughest training the company could offer, he did not send him to the Arctic to deal with the Eskimos, but down to the New York fur auction to see how he would survive among the Seventh Avenue furriers. Murray succeeded so well that today the Bay’s New York fur auction is the world’s largest; ironically, though, it handles no wild fur—only tame, ranch-bred varieties.

Still, 12% of the Bay’s gross income comes from its operations in the Canadian North—and the company is determined to go on doing business there. Over the years, critics have charged the Bay with paying the Eskimos minimal prices for their furs and persuading them to spend so much on frivolities that they have to go on welfare in order to get food. To provide competition with the Bay and to give the Eskimos a hand in running their own affairs, Ottawa is establishing Eskimo-run cooperatives to sell merchandise and market Eskimo stone carvings and prints.

Quiet Warning. Even though it no longer defends its stakeouts with its own army, the Bay is as tough a competitor as ever. In the North, it has warned the cooperatives not to start any rash price wars. In the more populous southern tier of Canada, the Bay has fought off suburban department stores with multistoried “Bay Parkades” for customer parking near its downtown stores. Even discount competition seems not to disturb Murray. Says he: “We find those basement-type stores only carry about 10% of the items we carry. We simply match their price on that 10%. We may be a bit upper middle class at the Bay, but we never forget that we started out selling to Eskimos and Indians, and we’re still selling to the lowest income group.”

* No. 1: Eaton’s Ltd. (sales: $630 million); No. 2: Simpsons, Ltd. ($412 million).