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Remember This? Freiman's becomes The Bay

Freiman’s was one of the first Ottawa stores to have an escalator, and, as markets moved and changed, so did the company.
freimans-1939royalvisitmikkan4169781
Freiman’s Department Store, Rideau Street, decorated for the 1939 Royal Visit. Photo/ Library and Archives Canada, Mikkan 4169781.

CityNews, in partnership with the Historical Society of Ottawa, brings you this weekly feature by Director James Powell, highlighting a moment in the Ottawa's history.

November 24, 1971

The A. J. Freiman Department Store was an Ottawa retailing institution that dated back to the end of the nineteenth century. 

Its founder was Archibald (Archie) Jacob Freiman, who had immigrated to Canada as a child with his family in the late 19th century from Lithuania. Coming to Ottawa from Hamilton in 1899, the 19-year-old Freiman and his partner Moses Cramer started the Canadian Home Furnishing Company at 223 Rideau Street, close to Cumberland Street. The company sold carpets, oilcloth and other types of household furnishings. 

The following year, the firm expanded, moving into next door 221 Rideau as well. In 1902, the firm moved into still larger quarters at 73 Rideau Street.

Despite the company’s success, the Freiman-Cramer partnership floundered when Freiman announced his intention of opening a credit department, which would permit customers to purchase goods on installment. This was just too risky for the conservative-minded Cramer. 

Fortunately, Frieman’s father, Hersh, stepped in, becoming young Archie’s partner. 

In 1911, Archie was ready to go it alone, and he bought out his father’s share of the business. 

Over time, the name of the store morphed from The Canadian Home Furnishing Company, A.J. Freiman, Proprietor, to A. J. Freiman Ltd. Ottawa -- residents knew it simply as Frieman’s. In part, the change in name reflected the shift in the nature of the firm’s business. 

In a 1925 interview, Freiman said that he had always been interested in the possibilities of a general store.Consequently, he added a men’s and women’s clothing to his line of products, thus setting the stage for the development of a department store. He also indicated that, beyond hard work, the secret of his success was advertising.

In 1944, Archie died suddenly after he had unveiled a plaque in the Adath Jeshurun Synagogue on King Edward Street, in honour of his friend, the synagogue’s cantor. Archie’s son Lawrence took over the family business.

Under Lawrence Freiman’s direction, the retail company continued to thrive and expand, always keeping up with the times. Freiman’s was one of the first Ottawa stores to have an escalator, and, as markets moved and changed, the company moved and changed with them. 

When people began settling in the suburbs after World War II, Freiman’s followed, opening a branch store in Ottawa’s first mall, the Westgate Shopping Centre on Carling Avenue in 1955. 

Freiman’s was also quick to introduce basement discount outlets for the budget conscious and in-house boutiques for the fashion minded. As well, it offered a phone-in service called Freiman’s Buy-Line. With its Charge-a-Plate, customers could also put things "on their account."

However, by the late 1960s, it was increasingly difficult for the firm to compete successfully. 

Lawrence Freiman’s health began to fail. He starting spending several months each year in Palm Springs, California or Palm Beach, Florida; his doctors felt the warm weather would do him good. 

He also had other interests. He was a two-term President of the Zionist Organization of Canada and was the Chairman of the Board of the new National Arts Centre. 

Of necessity, the direction of the company passed to the next generation -- A. J. Freiman II and son-in-law Gordon Roston. While the two were capable young men, the company lacked depth. Lawrence feared that Freiman’s didn’t have the calibre of senior management necessary for both the present and the future.

Family-owned, quality department stores also found it difficult to attract the talent needed to compete with the larger, nation-wide chain stores that offered better career possibilities. Expansion also required vast sums of money that family-owned business, like Freiman’s, simply didn’t have.

As well, the Ottawa market was becoming increasingly competitive with no less than eight new department stores under construction or under consideration during the summer of 1971, said Lawrence Freiman in his autobiography. Simpson-Sears had gone into Carlingwood Mall when it opened in the late 1950s. It had moved into the St. Laurent Shopping Centre in 1967 and was about to take over the former Murphy-Gamble store on Sparks Street. Eaton’s was also entering the Ottawa market with an anchor store in the new Bayshore Shopping Centre, scheduled to open in 1973. 

The Hudson’s Bay Company of Winnipeg was also eager to have an Ottawa presence. In August 1971, the firm approached Lawrence Freiman about a friendly take-over.

It was an opportunity that the ailing Lawrence couldn’t refuse. 

Although he had hoped to leave Freiman’s to the next generation, neither his son nor his son-in-law were interested in running the company as they would not have a controlling interest. With the family’s shareholding becoming increasingly dispersed over time, they would be at the mercy of people with no direct involvement in the firm’s operations. 

As Lawrence said in his autobiography, his son and son-in-law wanted to be "their own people." 

The clincher of the deal was the Bay’s promise to honour Freiman’s pension commitments to staff. Lawrence himself was to receive an annual pension of $35,000.

On November 24, 1971, the news broke in both Ottawa and Winnipeg: The Hudson Bay Company was to buy Freiman’s Department Store on Rideau Street, its two branch stores located in the Westgate Shopping Centre and on St. Laurent Boulevard, and its two discount "Freimart" outlets. 

It was virtually a 'done deal.' 

The Freiman family had already agreed to sell their 70 per cent share of the publicly-traded company for $6 per share, a mark-up of $1.25 over the last trading price on the Toronto Stock Exchange. 

The deal valued the company at $4.59-million.

That day, staff crowded into Lawrence Freiman’s office on Rideau Street to hear the news. Also present was Don McGiverin, the Managing Director of the Bay’s 200 retail outlets across Canada. Freiman and McGiverin reassured employees that their futures in the company was secure and that their pension rights had been preserved. McGiverin added that Freiman staff could "aspire" to any position in the Canada-wide company.

The investment dealer community was surprised by the comparatively low price put on Freiman’s shares. 

Even though the company’s profitability had slipped somewhat during the first half of 1971, to $86,626 from $101,274 over the same period the previous year on sales of almost $14-million, the company was in sound financial shape. According to one broker, Freiman’s book value was greater than $9 per share -- but still down from the $9.75 per share price the company had been valued at when it had gone public roughly ten years earlier. The company’s shares had traded as high as $13 some months earlier, but their value had fallen in tandem with a broad sell-off in the Canadian stock market. Another dealer thought the $6 price was deceptive. As the Freiman’s pension plan was unfunded, the Bay’s all-included cost of purchasing the company was roughly $8 per share if one included the cost of the Bay assuming the firm’s pension liabilities.

News of the take-over was greeted with sorrow and concern in some quarters. The company had a reputation of being a good employer. 

A letter to the Editor of the Ottawa Citizen appeared shortly after the announcement. Written by Mansab Ali Khan, the letter read: "The magnanimity and generosity [of Freiman’s] toward colored people is very well known. Any qualified person from Asia or Africa who applied for a job in that company was never refused employment because of color or nationality." Mr. Ali Khan hoped that the new owners would "follow in the footsteps of A.J. Freiman." The Citizen opined that it was "not a surprise to see Freiman’s go," but Ottawa "won’t be quite the same."

The Bay officially took control of Freiman’s shortly before Christmas 1971 and began operating under the name Freiman-Hudson Bay Company. Freiman’s shareholders received one last dividend of 5 cents per share, payable in mid-January 1972. Gordon Roston, Lawrence Freiman’s son-in-law was appointed Vice-President and General Manager. A senior HBC executive was appointed Assistant General Manager. A.J. Freiman II remained on the company’s Board of Directors.

In June 1973, Freiman’s was subsumed completely within the Bay, and the Freiman name disappeared from Ottawa retailing. To mark the event, there was a one-day celebration at the Rideau Street, Westgate and St. Laurent stores. Models showed fashions worn by people over the Bay’s 300-year history. The store also launched "Bayman," a superhero who fought inflation with Bay Day flyers "full of top quality merchandise at great savings."

Lawrence Freiman died in 1986. 

The eponymous Lawrence Freiman Lane that runs behind the National Arts Centre recognizes Lawrence’s contribution to the arts in Ottawa. 

An arcade enclosed within the Hudson Bay Company between Rideau Street and George Street is officially known as the Freiman Mall. This passage had previously been known as Freiman Street, and before that as Mosgrove Street. When the Rideau Centre was constructed at the beginning of the 1980s, the City of Ottawa closed the street and leased it to the Bay on the proviso that the company enclosed the space and allowed through access to the Byward Market. A plaque in the Mall unveiled by Mayor Marion Dewer in 1983 honours Freiman’s Department Store and the Freiman family. The pedestrian bridge that links the Rideau Centre to the Hudson Bay Company above Rideau Street is also officially known as the Freiman Bridge.

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