Monday, January 30, 2006

Sale of the Hudson's Bay Company

So Jerry Zucker in the buying more of the HBC and once again people are up in arms about a Canadian company being sold to the an American. This 337 year old company was based in the UK for the first 300 years and somehow that is not an issue people tend to remember.

People seem to always forget that corporations are designed to make a profit for their owners. The HBC was created in 1670 to access western Canada for profits for the British based owners of the company. The HBC was not in the business to build Canada or to settle Canada or to provide people in Canada with any services.

The HBC was granted a monopoly for most of the western half of Canada. No free market forces at work here. No interest in allowing others to come into their territory and try and make a go of anything. They were a monopoly company and not a government.

In the end it does not really matter what one thinks of the HBC in the past, be it as heroic fur traders or as an impediment development of Canada or as exploiters of the First Nations. The past is the past. The HBC of today has not been the company of the past for many years, not really at all since just after World War 2. Since 1987 the HBC has not been involved in the fur trade at all - that being the year they sold their Northern Stores chain.

The past remains and will not disappear no matter what happens to the HBC now. The mythical company people are worrying about is long gone. In most senses since long before I was born. We now have a corporation that is a major retailer in Canada. We have seen the end of Woodward's and Eaton's in recent years. Simpson Sears is now only Sears as they have shed the Canadian part of the name. And the best deals we can get are at Wal-Mart. Now the HBC changes hands again.

Why should I care who now owns the HBC? I do not shop there much and can not think of the last time I went into the store. If the heritage of the HBC has any value today, then the new owner would be a fool not exploit the value of that heritage in seeking more profits.

Ultimately, the existing shareholders could have said no to him, but then they would have had to have given up some capital gains on their shares. They made their choice and we should respect it. We also managed to live through ages that the company was British owned.

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