Morgan's of Montreal

The Birth of the Business

In 1844 twenty-three year-old Henry Morgan left Glasgow to seek his fortune in Montreal. He was a veteran of the dry goods trade, having been apprenticed at the age of fourteen. Although he had a good position, he was ambitious and impatient for advancement. Armed with a letter of introduction to a client of his elder brother, a respected retailer, he set sail in April. He did not tell his parents of his plans for fear of being dissuaded.

Original partnership agreement between Morgan and Smith, January 14, 1845

Henry arrived in Montreal in May of 1844. Almost immediately he made contact with David Smith, another expatriate Scot, and his business associate, Thomas Waddell. The two men were impressed with young Morgan and offered him a position on the spot. Things moved swiftly. Before the end of the year, Henry Morgan had edged out Waddell to become Smith’s main partner.

Morgan liked and admired Smith, who was intelligent, honest and experienced. Smith in turn saw in Morgan an ambitious man with an impeccable network of contacts in the Glasgow dry goods trade. In January 1845, Smith & Morgan was born. David Smith provided the experience and financial expertise; Morgan’s job was buying and selling. Morgan’s connections proved very useful: the new enterprise’s original order for goods was placed with Morgan’s former employer and his brother James’ firm. Smith & Morgan opened to the public May 22, 1845.

Within a few years the business was overextended. At the same time a depression took hold. Smith & Morgan was unable to pay its overseas suppliers for stock purchased earlier on credit. This proved exceptionally hard on James Morgan back in Glasgow, who was forced to resign his own partnership in 1848. In 1850, at Henry’s insistence, he came to Montreal to see things for himself. Meanwhile David Smith was in Glasgow trying to soothe unhappy creditors. Before he left Scotland he wrote to James that he would be willing to sell his share of the business for £4000. James accepted and joined Henry in a 50-50 partnership in 1851.

James Morgan did not come out to Montreal immediately. Instead he worked buying stock for the new venture and trying to rehabilitate Henry Morgan’s reputation with suppliers. James’ own personal affairs suffered by association and the partnership almost broke up because of it. What finally tipped the balance was the April, 1851 balance sheet – which showed a healthy profit despite the preceding years of difficulty. James and his family left for Montreal in early 1852. The family business, now called Henry Morgan & Company, had begun.

The Early Stores

Listing for Henry Morgan & Co. Ltd. on McGill St. from Montreal Business Directory. 1862 – 1863.

To chart the location of the Morgan’s stores over the years is to outline the growth and development of the city of Montreal. Smith & Morgan opened in 1845 with two clerks at 240 Notre Dame Avenue just east of McGill – within sight of the masts of Montreal harbour. In 1853 Henry Morgan & Co. had moved to larger premises at 208 McGill St. and had 40 clerks. Five years later the Company acquired premises around the corner at 284 Notre Dame, effectively extending the store to an “L” shape with access from both streets.  It was at this time that the store began to be known as “Colonial House”, a name that emphasized its connections to Britain and would remain in use until the mid 1930s.

The next move took the store from the harbour area to the financial district. In 1866 the Company opened in premises on St. James St. at Victoria Square. The new building had four storeys and 100 clerks. In 1874 a fifth floor was added and the business employed over 150 clerks. By this time the business had been transformed from one specializing in dry goods into a department store selling ready-made apparel, furnishings, china, etc.

The Move to Phillips Square

Henry Morgan never married, but his brother James had a son, also named James (James II), who

Morgan’s Colonial House promotional card listing departments, 1891

followed his father into the family business in 1863. He was joined by his cousin Colin, son of a third Morgan brother, in 1869. Colin Morgan is credited with conceiving the most significant move of all. In 1886 Montreal suffered a devastating flood. Morgan’s suffered major losses to inventory stored in its cellars. Morgan’s key clients were moving to the fringes of the city and building lavish properties in new residential areas. In 1889 Colin and James II decided to relocate to the top of Beaver Hall Hill. Convincing Henry and James I of the soundness of their plan they began to buy property on the north side of Phillips Square, at the corner of Ste. Catherine St. and Union Ave.

Local residents were appalled; competitors were amused. Everyone but the Morgans thought that the venture was doomed to failure. “Experts” gave it a year or two. But in April 1891 the Company opened its doors in its new location and never looked back. Within five years the Ste. Catherine St. area had become the new retail heart of the downtown.

Sketch of Morgan's Colonial House, Montreal, ca. 1891

The new Colonial House was originally designed to be five storeys in height. But despite their optimism the Morgans scaled back the plans and built only four. The top floor was home of the Morgan Factories. Here large numbers of seamstresses, cabinet-makers, and upholsterers were engaged in making custom clothing, draperies, and furnishings, largely supplying the store’s own galleries. In this Morgan’s was noticeably different from other retailers, including Hudson’s Bay Company, which, despite large numbers of private brands, were never directly involved in manufacturing.

By 1900 space in the store was at a premium. In order to reacquire the fourth floor for retail, the Company purchased two locations on Beaver Hall Hill, including premises of the Dominion Motor Coach Company, and relocated the Morgan Factories there. The motor coach business was maintained and Henry Morgan & Company expanded into building car bodies and upholstery. During World War II this division of the business had a contract making seats for Mosquito bombers. Meanwhile the factories evolved into a complete interior design service. Morgan’s clients could rely on the Company to fully outfit home and office space, from paint to carpeting to furnishings.

The 1923 Expansion

Continued growth and success meant that in the early 1920s plans were underway for a major expansion. Its centerpiece was the building of an eight-storey addition behind the Ste. Catherine St. store, extending the frontage on Union Ave. to 417 feet and wrapping around the existing Aylmer St. annex in an “L” shape. Realizing this plan called for the demolition of several properties. The Havelock Building, immediately north of the store on Union, was acquired in 1920 and slated for demolition. The 1906 Union Ave. annex would also be demolished. In between the two lay the Bell’s Galleries Building, owned by Hugh Graham, Lord Atholstan, proprietor of the Montreal Star. Atholstan held out for over a year, finally selling for $250,000 in 1921. The cost of the acquisition made demolition of the building economically unsound. Instead, it was decided to relocate the building 300 feet up the street.

The new addition, eight storeys above ground as well as a basement, was built of reinforced concrete. The expansion more than doubled the store’s area to over 309,000 square feet. Seven large display windows measuring 8 x 20 feet were added along Union Ave. The expanded main floor, covering over 34,000 square feet was entirely outfitted in walnut fixtures. New freight elevators, capable of hauling a fully laden dray and team of horses or a 10 ton motorized truck, were installed. A brand-new physical plant, delivering heat and electricity to the store, was built on the east side of Aylmer, connected to the store by a tunnel under the street.

Morgan Factories acted as General Contractor on the project, supplying foundations, concrete, plumbing, heating, interior trim and panelling, carpentry, plastering, painting and linoleum tiling. Colin Morgan laid the cornerstone of the new addition on April 21, 1923 – 32 years to the day after the opening of the store. Opening Day was set for November 15th – an aggressive timeline of only 196 working days from start to finish!

Expansion of Morgan’s

The 1950s saw the expansion of Morgan’s beyond the downtown. In this, the Company’s development mirrors that of other retailers who responded to the post-war economic boom and exodus of city-dwellers to the suburbs by opening branches in these new areas.

The first branch, in the Snowdon area of Montreal, opened in 1950, followed later that year by another on Bloor St. in Toronto. In 1951 the Company acquired R.J. Devlin Ltd. on Sparks St. in Ottawa. The store at Boulevard Mall in the north-east of Montreal opened in 1953, Dorval Gardens in 1954, Lawrence Plaza in Toronto in 1955, followed by Hamilton in 1957, Rockland Centre in Montreal in 1958 and Cloverdale in Etobicoke (Toronto) in 1960.

Mural of the “Cabbage-Men”. February, 1952.

But Morgan’s did not forget its roots. In 1952 the Company again proved its talent for innovation by leasing the basement of the Ste. Catherine St. store to local Montreal grocery chain Steinberg’s Ltd. The need for a “groceteria” had been for some time a topic of discussion among the Company’s directors. They felt that by offering their customers a food market on site in the store, they were maintaining Morgan’s tradition of fine quality at fair price. “One-stop shopping” – the hallmark of the shopping centre – had arrived in the downtown.

The Steinberg’s grocery had direct access off Union Avenue as well as by stairs from the Main Floor of the store itself. The cheerful mural of the “cabbage-men”, which decorated the stairwell, was widely noted in press clippings of the time. “Steinberg’s at Morgan’s”, as it was known, had slightly different hours than the store to accommodate the needs of shoppers who wanted to do their marketing on their way home after work. The grocery made deliveries in the immediate area between Duluth and Pine to the north, Amherst to the East, Victoria to the west and Craig and St. Antoine to the south. For an additional fee delivery was also available to the Lakeshore area of the West Island, as far as Ste. Anne de Bellevue and Senneville.

Acquisition by Hudson’s Bay Company

At the end of 1960 an agreement was reached between Henry Morgan & Company Ltd. and Hudson’s Bay Company whereby the two became a single entity. Although some sources refer to the deal as a “merger” in essence Hudson’s Bay Company purchased Morgan’s outright from the Morgan family. Many Montrealers are unaware that the acquisition took place this early, probably because the Montreal-area stores continued to operate under the Morgan’s name until June, 1972.

Both sides had sound reasons for the merger. David Morgan, who published a history of his family in 1992, posits several reasons for Morgan’s decision to sell. Expansion to the suburbs and into other cities was proving extremely expensive and profits were not up to expectations. Bart Morgan, then President, was almost fifty and already pursuing other interests. And perhaps more importantly the fifth generation of Morgan’s had not furnished anyone interested in continuing in the family business.

Hudson’s Bay Company’s perspective is no less interesting. According to Company records, HBC was first approached by a representative of Morgan’s about a possible merger as early as May, 1957. At that time the Canadian Committee of the Board of HBC advised against such a plan. In December 1959, however, a senior HBC official went east to view Morgan’s operations and reported positively. Expansion had stretched staff to the limit and employees were older than the average indicating future staffing problems. And he noted that the Morgan family was eager to sell to a Canadian, rather than American, business.

The stage was set for a mutually advantageous deal. Hudson’s Bay Company acquired 10 stores and an immediate presence in eastern Canada, where, despite two-thirds of the country’s population, it had no stores at all. Retail volumes immediately increase by 50% with an attendant positive impact on purchasing power. The Morgan shareholders got 1 HBC share and $14 cash for each Morgan share – an offer worth a total of $15.4 million. Morgan family members ended up owning almost 7% of HBC stock, thereby becoming the single largest shareholder block.

Renovation and Expansion: 1964 – 1966

Almost immediately after purchasing Henry Morgan & Co. Hudson’s Bay Company began planning major renovations to the downtown store. It was felt that the store was out of date and a bit run down. A series of projects was begun to address these issues. As a result of this expansion the store came to occupy the entire city block.

Bon Marché: Millinery Department.1966.

Plans included a five-storey parkade for 550 cars immediately to the north across de Maisonneuve as well as a complete overhaul of the all food services in the store, thereby increasing the number of restaurants and cafeterias to five. Last but not least was the development of the extended basement area as retail space. Discount retailers were beginning to make significant inroads in the marketplace. HBC responded with a bold plan to make the basement area of the downtown store a budget floor which it named the Bon Marché. The multi-cultural nature of Montreal was the key theme of fixtures and fittings installed which were intended to reflect the key ethnic groups of the city.

The Bon Marché would not only be a showpiece but would assured of high traffic because it was connected to the McGill station of the new Montreal subway, the Métro, which was scheduled to open in 1966. All construction projects were due to be completed in time to serve visitors expected for the World’s Fair in 1967.

The Tradition Continues …

At the start of the 21st century HBC undertook an aggressive renovation at The Bay in downtown Montreal. Beginning in the fall of 2001 a significant investment in the store created an environment befitting the Montreal customer: savvy, sophisticated, elegant and urban.

The new concept placed cosmetics shops at the main St. Catherine St. entrance with open glass for a street-friendly area visible to pedestrian traffic. A very European accessory and jewellery marketplace was created in the central hub of the main floor. The third floor Women's wear and Lingerie floor continue the same philosophy of elegance and sophistication. Light levels were enhanced and windows were rediscovered for a bright, airy, shopping environment. In this way, the tradition of innovation and change that began over a century ago with Morgan’s Colonial House continues today.