THENEWHbcHbc welcomes (left to right)MARK FOOTE, President & CEO, Zellers,JEFF SHERMAN, President & CEO, Hudson’s Bay Companyand BONNIE BROOKS, President & CEO, the Bay.

02Hbclife

Welcome to the newHudson’s Bay Company.I am very excited to be part of the great team here at Hbc. Since taking on the role of President and CEO in July,the leadership team and I have been busy reorganizing the structure of Hbc and positioning ourselves for change.I am happy to say we are ready for the challenges before us.Make no mistake: this is not the old Hbc. Everything isdifferent and we are ready to move with the speed necessary to bring this company to where it should be in theCanadian retail marketplace – an exciting, dynamic and great retail enterprise.

I am confident that with our people, we have the talent and experience needed and with our banners, we have thebreadth of offerings to meet and exceed all our customers’ needs. We are ready to act boldly and swiftly to make thechanges necessary to turn this company around. To do so, we’ll be doing things that people don’t expect us to do:we’ve already reorganized the company with speed and we’re changing direction quickly. As we enter the critical fourthquarter, I want our customers and all of you to feel the change in the air – to sense that something different and excitingis happening at Hbc and to be a part of it. You may not be able to put your arms around it, but you will know that newand different things are happening that will help us achieve our vision.

As part of the Hbc team that will lead this change, we each have different stakeholders we are responsible for andmust answer to. For me, these are our 60,000 associates and all our customers; they are my focus – who I report to andfor whom I am responsible and, frankly, what keeps me awake at night.

These are exciting times for Hbc. All systems are go and positive things are already beginning to happen. I hope thatyou feel this excitement and that you are ready to join me on this great journey to become Canada’s best and favouriteplace to shop.

Let me take this opportunity to wish you and your families a wonderful and joyous holiday season. Thanks for all youdo and for being an important part of the Hbc family.

Sincerely,

Jeff ShermanPresident & CEO, Hudson’s Bay Company

MESSAGE FROMJEFF SHERMAN

COVER PHOTO | CP/FRANK GUNN

Hbclife

HOLIDAY 2008 | VOLUME 4 | ISSUE 2

contentsAT-A-GLANCEA snapshot of HBTC

THE BAYNew brands and top gifts

ZELLERSFresh products andhot toys

HOME OUTFITTERSInnovative holiday ideas

FIELDSGrowing across Canada

OUR PEOPLEEarning Our Stripes andcustomer service heroes

COMMUNITYSocial responsibilityand holiday fundraising

4610

141718

22Hbc Life is published twice a year in English andFrench for associates of Hbc. Hbc InternalCommunications welcomes all submissions,suggestions and feedback. Please email us athbc.internalcommunications@hbc.com. For morenews and information about Hbc visit our intranet –Hbcnet or our associate website – Hbcassociate.com.

On November 27, watch forthe debut of an exclusiveOlympic mascot four-packat our Bay and Zellers storesin honour of the one yearbirthday of our Olympic

mascots Miga, Quatchi, Sumiand Muk Muk (the official

mascot sidekick).

03

The countdown is on for the2010 Olympic Games. Watch for

new signage showcasingHbc’s commitment

to athletes and sharing theexcitement with all Canadians.

04Hbclife

Lord & Taylor47 stores in the Eastern U.S.12,000 employeesBrendan Hoffman, President & CEOwww.lordandtaylor.com

Fortunoff23 stores in theNewYork Tri-StateArea2,000 employeesCharles Chinni, CEOwww.fortunoff.com

Creative Design StudiosManhattan, New York65 employeesSusan Davidson, CEO

Lord & Taylor is an upscale specialtydepartment store with 47 stores innine states and the District ofColumbia. Founded in 1826,Lord & Taylor is one of America’soldest retailers with a legendary FifthAvenue flagship store and areputation for attentive customerservice and high quality merchandisefocused on apparel and accessoriesfor women, men, and children.

Founded in 1922, Fortunoff currentlyhas 23 retail stores specializing in finejewellery and home furnishings. Itsunparalleled selection and remarkableprices have established Fortunoff asa trusted name in the retail industry.In March 2008, NRDC Equity Partnersacquired the company with theintent to expand its full-line storesto as many as 50 locations acrossthe U.S., while its 16 regional outdoorfurniture stores could ultimatelygrow to include over 300 locales.

Creative Design Studios was formedin October of 2007 as a stand-alonecompany with a mission to developand manufacture designer-drivenbrands for regional departmentstores and to invest in great Americandesign talent. CDS is the parentcompany of Peter Som and brandsincluding Kate Hill, Context, and theBlack Brown 1826 men’s brand.CDS plans to expand its offerings andsell its branded collections throughoutNorth America and internationally.

In July 2008, NRDC Equity Partners acquired Hbc and formed the Hudson Bay Trading Company (HBTC). HBTC is a leadingNorth American retailer with four divisions: Lord & Taylor, an upscale specialty retailer with 47 stores in nine states;Fortunoff, a 23 retail store chain specializing in fine jewellery and home furnishings in the New York tri-state area; CreativeDesign Studios, the fashion design andmanufacturing division that creates branded collections for customers throughoutNorth America and internationally, and the Hudson’s Bay Company. Combined, these companies comprise more thanUS$8 billion in retail sales, 75,000 employees, and 55million square feet of stores in the United States and Canada. RichardBaker is CEO of the Hudson’s Bay Trading Company and the 38th Governor of the Hudson’s Bay Company.

HbcCanada’s Merchants Since 1670Jeff Sherman,President & CEOwww.hbc.ca

Hudson’s Bay Company, establishedin 1670, is North America’s oldestcontinually operating company. Hbcis a division of Hudson’s Bay TradingCompany and Canada’s largestdiversified general merchandiseretailer, operating the Bay – a majordepartment store, Zellers – a massmerchandise format, Home Outfitters– a kitchen, bed and bath specialtystore, and value-priced Fields stores.With more than 650 retail outlets andover 60,000 associates across NorthAmerica, Hbc provides consumerswith stylish, quality merchandise atgreat value, through retail bannersfocused on exceptional customerservice.

The Bay92 locations across Canada18,000 associatesBonnie Brooks,President & CEOwww.thebay.ca

The Bay is the department store retail division of the Hudson’s Bay Company.With 92 locations from coast to coast, the Bay is a full-line department store chainfocused on fashion merchandise in apparel, accessories and soft home categories,offering high quality merchandise at mid-to-upper price points accompanied bytraditional department store services. Committed to delivering excellent value andconsistent, reliable service, Bay stores are located in suburban and urban markets,with a strong franchise in the downtown core of Canada’s major cities.

Zellers280 stores across Canada30,000 associatesMark Foote,President & CEOwww.zellers.ca

Zellers is the mass merchandise retail division of the Hudson’s Bay Company and isa leading Canadian mass merchandise department store chain with 280 locations incommunities nationwide. Offering customers clear value and price competitivenesson national and private brand merchandise is Zellers’ top priority. Zellers will seegreater focus on branded apparel, improved customer service and a future roll outof new 125,000 square foot prototype stores.

HomeOutfitters62 stores across Canada2,200 associatesKerry Mader,Senior Vice Presidentwww.homeoutfitters.ca

Home Outfitters is the Hudson Bay Company’s kitchen, bed and bath superstorechain, with unbeatable selection and service. Home Outfitters offers customers morechoices, more brands and great ideas that allow customers to live better and spendless. As Canada’s fastest growing home specialty store, Home Outfitters will continueto grow and offer customers unbeatable selection of brands and service in kitchen,bed and bath home furnishings.

FieldsOver 180 locations in WesternCanada and Ontario1,525 associatesGary MacDonald,Senior Vice President

Fields is Hbc’s extreme discount retail format focused on value-priced, everydayconsumables, family clothing, home fashion and general merchandise. Fields hasoperated in Western Canada since 1948 and has recently expanded into Ontario,with a total of 200 stores in Canada planned by the end of 2008 and at least 20more in 2009. Fields will continue to focus on growth and delivering value-pricedmerchandise to Canadian consumers.

at-a-glance

05Hbclife

What’s newat theBayWaterloo

06Hbclife

THEHOLIDAY SEASON IS UPONUS, when millions of Canadians venture out, armed with lists to findgifts for friends and family, and special items for their holiday entertaining. This year, it’s my mission tomake the Bay their department store of choice for all their gift-giving and personal needs.

Since joining in September, I’ve had the opportunity to review the team’s Christmas plans for the Bay.I’m pleased to say that this year, we have an unmatched selection of merchandise for everyone on yourlist – new and exciting brands in fashion, accessories, cosmetics and jewellery - as well as fashionable ideasand solutions for entertaining and for every day.

On my visits to stores over the past two months, what has impressed me most is the sense of pride thatour associates have in this company and the genuine enthusiasm each of you has for pleasing our cus-tomers. At this very special and very busy time of year, I ask that you show your pride in this great compa-ny by going out of your way to treat each customer the way you would like to be treated: with warm,courteous service that will keep them coming back to the Bay throughout the holidays and all year long.

I would like to take this opportunity to thank you for your commitment to our customers, to the Bayand to Hbc. I especially thank you for your patience and loyalty during this time of positive change. Theseare exciting times for our company and I believe wholeheartedly that 2009 will bring growth and successto the Bay and to Hbc.

Whatever way you celebrate, I hope that you enjoy this season of giving. May the holidays bring youpeace, joy and good times with family and friends.

Happy Holidays,

Bonnie BrooksPresident & CEO, the Bay

WATERLOO, ONTARIO AND ITS CONESTOGAMALL have been home to the Bay formore than 15 years. On September 19, 2008 the city welcomed a new 120,000 squarefoot Bay store with green innovations, making it the first of its kind in Canada. Thisprototype reflects a new design, top-of-the-line materials and distinctive architecture.Ontario’s Chief Energy Conservation Officer, Peter Love, recognized Hbc’s commitment tocreating a culture of conservation in Ontario by awarding the prestigious Certificate ofRecognition to the store for showing that saving electricity does not have to compromisehigh style, comfort or design.

AMONG THE STORE’S MANY GREEN INNOVATIONS ARE:�Special energy-efficient lighting inside and out – LED exterior signage lights, which

use 10 per cent of the energy required for conventional lighting; fluorescent lightingwhich use energy-efficient T8 and T5 ballasts and reduce cooling loads, providingthe same lighting quality within the store.

�Solar panels mounted on the front of the store, enabling it to draw less powerfrom the local grid.

�Two wind turbines, which will generate enough electricity to offset the power con-sumption of an average home.

�White TPO roofing to reflect heat and reduce thermal islanding; the cooler roofreduces the need for air-conditioning and is recyclable at end of life.

The store features many new brands including MAC and Chanelcosmetic lines, updated clothing lines such as Esprit, Mexx and Kenzieas well as new jewellery and watch lines. The new collections in thestore are focused on lines for him, for her, and for family as well assoftlines for the home.

Message fromBonnieBrooks

the bay

07Hbclife

INTRODUCING EXCITINGNEWBRANDSAVAILABLEAT THEBAYGLUCKSTEINHOME BABYGreat design is for everyone. Even babies! The newGlucksteinHome Baby line includes two distinctivelifestyles, Classics and Modern, bringing fresh designinto your infant’s room.

HUDSON ROOM &HUDSON NORTHThe Bay entices today’s Canadian male to step out from the ordinarywith Hudson Room and later in February 2009 with Hudson North.Available exclusively at the Bay, Hudson Room offers modernappropriate wear-to-work looks while Hudson North will offer updatedessentials for all facets of everyday casual life.

CREATIVE DESIGN STUDIOS BRINGSFRESH FASHION TO THE BAYBLACK/BROWN 1826 features an impressive range ofmenswear classics executed in intricate wool knits,elegant wovens, and fine cotton shirting in richhues and stylish cuts that promise to bring OldWorld tradition to the contemporary man.Confident, organic lines are manifested in smartlytailored suede jackets and cozy cable knitshawl-collar sweaters, flat-front trousers andtweed blazers, all imbued with signature tailoring.

CONTEXT is atrend-sensitivewomen’s wearlifestyle brandof updatedclassic sports-wear witha distinctivelymodern edgewith trend-driven fabrics,colour paletteand patterns.

AirborneRefillables$30

Just Bag It$12

Purse-Onifier $18

TRAVELMADE EASYThe answer to today’soffice-to-party andoffice-to-airplane,Mytagalongs aredesigned to fit theon-the-go lifestyle ofwomen everywhere.Ranging from personalcare items toorganizers andaccessories, thesetravel-friendly, qualityproducts provideone-stop solutions forlast minute needs at anaffordable price.

08Hbclife

WHETHER YOU’RE HOSTING A HOLIDAY COCKTAIL PARTY OR ATTENDING A WORK EVENT, THE BAYCAN GET YOU THERE IN STYLE. HERE’S AN INSIDE LOOK AT ‘MUST HAVE’ ITEMS FOR THIS SEASON. GIVEYOURSELF OR YOUR LOVED ONES THE GIFT OF ELEGANCE AND STYLE WITH THE HELP OF THE BAY.

BAIA Blue zip bomber jacket $138

Walter pleated pencil skirt $225

Maggy London navy andblack spotted dress $149

Maggy London Envystrapless satin dress $149

Lida Baday sequined skirt $760

Careta black sheer metallic scarf $40

Twelfth St. by Cynthia Vincenthalter sequin flutter skip dress

$450

Walter vintage lace dress$348

SwatchMen’s metal watch $165Women’s metal watch $135

Phillip S+arckMen’s black leather

watch $230Men’s metal strap

watch $250

Armani ExchangeWomen’s white leather watch$170; Women’s gold metalwatch $195

Vero Moda black pant$55

Nine West vertical stud shorty glove $80Nine West side lace-up glove $80Bleka black patent glove $70

the bay

WHAT’SHOT FOR THE

09Hbclife

EXPERIENCE ANENCHANTEDCHRISTMAS

Don’t let the decreasing temperatureoutside dampen your mood, come intothe Bay and experience EnchantedChristmas this holiday season.Beautifully decorated trees, twinklelights and wreaths set the mood andinspire your holiday shopping.

While at the Bay, be sure to visitChristmas Street, our one-of-a-kindChristmas wonderland, to find every-thing you need to decorate your homefor the holidays.

WATCH FOR EXPRESS YOURSELFTHIS SPRING - the Bay’s next brandcampaign to help you perfect your indi-vidualized style.

Guess charm bracelet $25Nicole Miller necklace and earring sets $40

Fossil necklace in a Christmas tin box $25

Distinctly Home stardust cushion $29.99

Dior cosmetics$31 - $55

Tag hurricane vases$29.99 - $39.99

B de Boucheron100 ml eau de parfum spray

$162

Thierry Mugler Angel Les Parfums $38 - $115

Guerlain Homme80 ml eau de toilette spray $90

focus on the customer

Accent crackled glass candleholders $12.99 - $16.99

HOLIDAYSAT THEBAY

ZELLERS FALL A TO Z EVENTMAKE SURE TOVISIT A ZELLERS STORENEARYOUbetween November 15 – 28 to check out the unbeat-able deals, fun in-store activities, product demos andsamplings of your favourite foods. It’s a great time toget a head start on your holiday shopping, as Zellershas every item imaginable from A to Z.

Be sure to tell everyone you know to use their HbcRewards Card with their purchases to enter the A to ZContest for a chance to win one of many excitingprizes. The grand prize is a fabulous 2009 ChevroletMalibu Hybrid, an EarthChef™ Kitchen Products prizepack and a trip for two to Toronto for the UltimateCulinary Experience, while the second place prize isan Everything from A to Z prize pack.

Hbclife

THE HOLIDAY SEASON HAS BEGUN and I’m very excited to be a part of Hbc and the Zellers team atthis all-important time for our business.

During the holidays people are busier than ever, so they want their gift and personal shopping to bequick and easy, with the right product in stock at the right price. Over the past few months, I have beenbusy working with my team to ensure that this season we give our customers exactly that – great promo-tional events and a positive shopping experience that will meet their needs and keep them coming back.

I’ve spent a lot of time in stores since joining Zellers and what I’ve seen and heard when speakingwith many of you is a strong desire to see our company succeed. This is very encouraging, because with-out associates who care and genuinely want to see Zellers succeed, we will never do so. This season, Iask each of you to tap into this desire and go out of your way to make every customer’s shopping expe-rience special and keep them coming back to Zellers all year long.

I see tremendous opportunity for our company. Working together, we’ll make our Zellers stores thebest choice for our customers every day.

I wish each of you and your families the very best for the holiday season and a safe and happy new year.

Best Wishes,

Mark FootePresident & CEO, Zellers

CHECKOUT THENEWFLYERS!Zellers is bringing more customers into stores with newflyers designed to focus on great deals and ways to save with:

�More great sale offers on the cover of the flyer.�New ‘2 Day Sale’ every weekend in November and

December.�New two week ‘A to Z Event’ flyers at the end of

November.

10

Message fromMarkFoote

zellers

11Hbclife

The Zellers Waterdown storereceived the Retail Council ofCanada’s award for best retailstore design during the annualExcellence in Retailing awardsheld in Toronto on June 2, 2008.The Retail Store Design award isgiven to a company with a storethat demonstrates an innovative,original and visually enticing layoutand design. The Waterdown storeprovides customers a great shop-ping experience while minimizingits effects on the environmentwith numerous green initiativesand providing one-stop shoppingand intuitive product zones forenhanced convenience.

GOINGGREEN JUST GOT EASIERThis fall, Truly™ Eco Plus products have arrived at Zellers. Formulatedusing naturally derived and biodegradable ingredients with no artificialscents or masking agents, all products are certified by EcoLogo, a globalleader in third-party environmental certification—your assurance thatthese products are safe for your family and the environment. Rangingfrom laundry detergents to bathroom cleaners and dishwasherdetergent gel, all packaging is made from 100 per cent post-consumercontent and are fully recyclable.Truly Eco Cleaning products $2.49 - $7.99

INTRODUCING SESAME BEGINNINGS™Sesame Beginnings makes its debut at Zellers stores this fall with sleep and play wear,DVDs and books for infants to toddlers, ages 0-24 months. Featuring baby versions of theSesame Street characters you know and love, each product includes parent tips encour-

aging age-appropriate learningactivities and adult/child interac-tions throughout the day suchas bath and dinner time. Thesequality products will encourage alove of learning to last a lifetime.

The new Zellers team in Whitby, ON.

Opening day brought in manycustomers excited to see the new store.

LOOKWHO’S NEW IN TOWNCustomers are now enjoying an unparalleled shopping experience with quality products at affordable prices atthe new Zellers in Whitby, ON. The grand opening on Saturday, September 27, 2008 was filled with eagercustomers who enjoyed the new open-concept layout. Customers also enjoyed the newly designed FamilyRestaurant, full Neighbourhood Market and brand new signing. Store Manager Louis Mitchell was pleased withthe turnout and said customers were excited about the new look and feel of the store.

Be on the lookout as Scarborough, ON follows suit in spring 2009 with a new Zellers store location.

Sesame Beginningssleeper $16.97

SesameBeginningsplaywear$19.97

Hbc’s GREENEST ZELLERSRECEIVES RETAIL COUNCILOF CANADA’S RETAILSTORE DESIGN AWARD

Sesame Beginnings™ and ©2008 Sesame Workshop

12Hbclife

zellers

Must-have toys for the holidays

Kota theTriceratopsDinosaur$299.99

Furreal Friends Biscuit MyLovin’ Pup $129.99 Air Hogs Wall

Climbing Car$29.99

Air Hogs Mini Helicopter$39.99

Monopoly Here and NowWorld $39.99

Neopets Plush $9.99 each

In the Night GardenBlanket Time Iggle Piggle$34.99

FROMTOYS TOBEAUTYZELLERS IS SURE TOHAVE EVERY

Beauty at Zellers

Hbclife13

New and exclusiveto Zellers, bathand spa productsare the perfectgifts for thestocking andunder the tree.

Governor’s Choice premiumEuropean chocolates and sweets willbe welcomed at any holiday party

Assorted Belgium Chocolatewith gift bag $19.99

Quintessential LavenderLuxury Foam Bath $7.97

Beauty Harvest – SweetAlmond Milk Creamy Body

Wash $9.97

Exotic Rituals ZanzibarVanilla Body Lotion

$9.97Green Soul Deep Cleansing

Body Scrub $14.97Spa Original+ Shower Gel

$8.47

Swiss Bubbly Chocolate Bar $0.79

English Chocolate & Toffee $14.99

European Biscuitsin organza gift box$12.99

focus on the customer

Y TODELICIOUS TREATS,YTHINGONYOUR LIST THIS YEAR

IT’S THAT TIME OF YEAR AGAIN and Home Outfitters is ready to thrillour customers with exciting gift ideas and décor for the home.

This season and all year long, we’re focused on delighting our customerswith great products for the kitchen, bed and bath that meet all their deco-rating, entertaining and gift-giving needs. Right now, we’ve got many newitems and fabulous new brands like our Marie Claire Paris line of home décor,exclusively available at Home Outfitters in North America.

We’ve also been working hard opening newOntario stores in Oakville andOshawa that represent our new store vision designed to deliver an excitingand memorable shopping experience. If you haven’t been in HomeOutfitters lately, a visit is sure to put you in the holiday spirit, with six foot tallnutcrackers and floating gift boxes to identify our seasonal ‘trend pods’ atthe front of the store. A key differentiator from other home specialty chains,‘trend pods’ are the customer’s first perception upon entering, featuring arevolving presentation of new and exclusive product and seasonal gift ideas.

With an assortment that’s new, innovative, and stylish at a great price,we’re helping our customers live better and spend less, so be sure to tell allyour family and friends to visit us for their holiday shopping needs. This isa busy time for our stores, so take the time to slow down and enjoy it all.Above all, remember that each experience we provide for our customers hasthe potential to make them a customer for life.

I wish each of you and your families and friends the very warmest wishesfor the holiday season and all the best for the new year.

Sincerely,

Kerry MaderSenior Vice President, Hbc Specialty

14Hbclife

Message fromKerryMader

Paderno Dome Roaster with Rack $109.99

Calvin Klein Lush Bath Towels $9.99 - $19.99

Waring Pro Yogurt Maker $49.99

GREATGIFT–WITH A WIDE RANGE OF PRODUCTS FROM VARIOUS HIGH-QUALITY YETAFFORDABLE BRANDS, HOME OUTFITTERS IS THE PLACE TO SHOP THISHOLIDAY SEASON FOR GREAT GIFT-GIVING ITEMS SURE TO TRANSFORMANY HOUSE INTO A HOME.WHATWILL TEMPT YOU THIS HOLIDAY SEASON?

homeoutfitters

15Hbclife

KitchenAid Stand Mixers (Green Apple, Gloss Cinnamon, Ice Blue & Bay Leaf) $399.99

Whatever It Takes Celebrity Mugs $19.99

Le Cube Bundle with Aeroccino Plus$429.99

Retro Ice Maker $249.99

Riedel 6 Piece Stemless O CabernetGlasses & Decanter $59.99

Cuisinart Countertop WaterFiltration System $159.99

Silly Critter 4pk SiliconeBaking Cups $9.99

Crane HelloKitty Humidifier

$49.99Tefal Baguette Maker$149.99

–GIVING ITEMSATHOMEOUTFITTERS

16Hbclife

homeoutfitters

ONAUGUST 20,Home Outfitters launched one of its largest product lines ever, the new exclusive homedécor collection - Marie Claire Paris.

Reflecting décor trends from around the world, the Marie Claire collection offers products for every roomin your home, whether it’s the bedroom, bathroom or kitchen. The products have a contemporary look, com-bining a modern and classic twist at affordable prices to complete the look of anyone’s home. Take a look atsome of the items sure to complement your home or be used as great gift-giving items.

Marie Claire Bird Song Jug $12.99

Marie Claire Measuring Cups, Jugs, Colander & Mixing Bowl $14.99 - $17.99Marie Claire Clover Coverlet (Queen) $139.99

Marie Claire Large Blue Square Platter $29.99

Marie Claire Tajines SM-$8.99 • LR-$29.99

EXCLUSIVE TOHOMEOUTFITTERS

Hbclife17

fields

FIELDS ISMAKING ITSMARKCHECK OUT THE MAP BELOW FOR ALL THE FIELDS STORESACROSS CANADA TO DATE

“WE CONTINUE TO AGGRESSIVELY EXPAND FIELDS,”says Gary MacDonald, SVP, Supply Chain & Logistics. “Ourextreme value dollar format retail chain is booming, with atotal of 40 store openings in 2008 alone.”

Currently, Fields has over 180 stores, located primarily inWestern Canada. Over the past two years, Fields hasexpanded east to Ontario opening 20 stores in the northernand eastern parts of the province this year. By year end, therewill be almost 200 Fields stores, bringing its total number ofassociates to over 1,525. “We are building a great team ofassociates across the country,” says Greg Crowder, GeneralManager, Fields.

Fields’ value-priced assortment of everyday consumables,clothing for the whole family, home accessories and generalmerchandise is the cornerstone of its success. Fields willcontinue to grow by as many as 20 new stores in theupcoming year in Ontario, Manitoba and Saskatchewan.“It’s an exciting time for Fields, which I’m extremely proud tobe a part of,” says Gary.

Province # of StoresYukon Territory 1Northwest Territories 2British Columbia 61Alberta 58Saskatchewan 26Manitoba 10Ontario 31

1 New Fields store 176 opened this summer in Almonte, ON. • 2 Inside Fields store 77 in Drayton Valley, BC. • 3 Fashion atFields store 312 in Hawksbury, ON. • 4 & 5 Cash area and layout of Fields store 160 in Kennedy Heights, AB.

1 2

4 5

3

FIELDSKEEPSONGROWING

Hbclife

ASSOCIATE ENGAGEMENT SURVEYWHAT MATTERS TO ASSOCIATES� How can I grow?� Do I belong?�What do I give?�What do I get?

CUSTOMER ENGAGEMENT SURVEYWHAT MATTERS TO CUSTOMERS� Can’t imagine a world without� Treats me with respect� Always treats me fairly� Always delivers on promise

INTERNAL CUSTOMER ENGAGEMENT SURVEYWHAT MATTERS TO INTERNAL PARTNERS� Perfect internal partner� Treats me with respect� Fair resolution of problems� Always delivers on promises

18

What are you doing?With results from associates and customers, both internal and external, both stores and home offices havebeen taking action to positively impact engagement scores. Here are some examples:

We are now in the second yearof the Earning Our Stripes pro-gramwith Gallup to betterunderstand the emotional con-nections we have with ourcustomers, our associates, andwith each other. Measuring how‘engaged’ we are with oneanother gives us the informa-tion we need to take our rela-tionships to the next level, andto provide the kind of shoppingexperience that will bring cus-tomers into our stores for alltheir needs. Watch for resultsfrom the 2008 AssociateEngagement and InternalCustomer Engagement surveysin early 2009.

Home Outfitters store 5172 in Dartmouth, NS had all oftheir associates work as a team to come up with action-able items to include in their plan. The objective behindevery item was to make an enhanced and enjoyableshopping experience for the customer in every area oftheir store. For example, they have a stocked fridge inthe back with bottled water and treats for associates togive to customers. The store has also adopted a pet fishcalled Marie Claire, a focal point for customers. The highenergy of associates and the positive atmosphere of thestore has been well received by customers.

To address customer feedback for ‘always treats me withrespect,’ associates at Bay store 1526, in Oshawa, ONworked on personalized action plans geared towardshow they could impact each customer’s experience. Theassociates’ action plans were condensed into one planfor each manager to post on their team’s board to reviewdaily. Brainstorming meetings were also held to over-come barriers with customers and handling difficultsituations. Associates were very open and vocal duringthe process as they saw their suggestions being heardand implemented. Daily positive feedback from customershas continued to motivate the team.

When Lee Robinson, store manager of Zellers Millcroft,store 487, in Burlington, ON wanted to improve hisassociates’ awareness of their mission and purpose, heworked with his team to create a targeted action plan.They placed posters with the mission and purposearound the associate lounge and created a bulletin boardfor associates to view extraordinary service comments.They also put a chart on the wall for associates to writetheir comments on how to improve customer engagement.The team was able to work together to turn their weak-nesses into strengths, receiving marked improvement intheir EOS results.

1 Estée Lauder Team - Vernon, BCDepartment Store Team Award

2 Samantha Bruno - Yorkdale, Toronto, ONDepartment Store Service Award

3 Ginette Theriault – Brossard, QCDepartment Store Service Award

4 Josephine Murphy - Kamloops, BCFragrance Advisor Award

5 Raymond Lo – Victoria City Centre, BCDepartment Store Service Award

Hbclife19

ourpeople

BEAUTY SERVICEEXCELLENCEAT THEBAYTHE BAYWAS A BIG WINNER at this year’s Cosmetics Outstanding Service Awards (COSA), receiving five awardsout of 17 and a total of 195 nominations. The COSAs are presented to cosmetics and fragrance associates acrossCanada who provide exceptional customer service. Congratulations to our winners:

On Friday, August 8, 2008, MarcTheriault, an associate from theHbc Vancouver Logistics Centre,was inducted into the SpecialOlympics BC Hall of Famefor being the first athlete in theSpecial Olympics BC 30 yearhistory to win gold at fourdifferent World Games in threedifferent sports.

Established in 2000, theSpecial Olympics BC Hall of Famerecognizes significant, long-last-ing contributions that individualsand groups have made to SpecialOlympics BC. Marc has also beenselected to attend the 2009World Winter Games, in Boise,Idaho - February 2009 - where hewill once again compete forCanada in level 6 Men’s SingleFigure Skating.Congratulations Marc - we arevery proud of your outstandingaccomplishments.

AGREATACCOMPLISHMENT

MARC THERIAULT, VancouverLogistics Centre, Vancouver, BC

1

2

3

4 5

20Hbclife

THE RIGHT FITWhile browsing through the Bay Masionville in London, ON, a customeroverhead lingerie sales associate, Carolyn Lacey, assisting a fellow customerwith a bra purchase. Impressed with her product knowledge and obviouseagerness, she decided to wait to ask for some assistance as well. Carolyntook her time with the customer and made sure she knew about the currentpromotions and about the Bay Bra Club. The customer, having spent a lot ofmoney and time in lingerie boutiques, had never received this kind of per-sonalized service. Due to her exceptional experience with Carolyn, the cus-tomer referred her four sisters, mother and all her friends to go see Carolyn,as she “represents the Bay brand perfectly.” This customer went on to saythat she e-mailed 30+ women about this experience.Way to go Carolyn!

GOINGABOVEANDBEYOND

As sales manager on her third day atBay Kelowna, BC, Christine receiveda frantic call from a customer. Thecustomer requested to have an infantcar seat transferred from anotherstore for her daughter as she had justhad a baby. Unfortunately the carseat did not arrive in time and herdaughter was to leave the followingmorning and desperately neededthe seat to transport her new infant.After locating the seat she needed atthe Penticton Bay store - a 45 minutedrive away - Christine offered todrive down and pick up the car seat.

The customer was very relieved andthrilled when she came in thatevening to pick up the car seat.Thanks to Christine, the customerhad the car seat she wanted and herdaughter was able to leave the nextmorning as planned. Christineembodies what going above andbeyond for the customer really means.

OUTOFHERWAY“Nancy is always willing to help when neededand always goes out of her way to makeassociates and customers happy whether sheis on or off duty. She acknowledges everyone’shard work with friendly smiles and words.

For example, a couple coming to ourrestaurant daily could not make it out any-more, so she now takes lunches to themeveryday and also shops for them. Anotherwoman lost her husband and needed some-body to talk to; Nancy was there to help herthrough this tough time. We also have an elderly customer who shops atour Huntsville store from Parry Sound and Nancy has given this womanher home phone number just so she can make sure she got home safely.

She has an open door policy for any issues or concerns and makes youwant to go that extra mile yourself. She is an excellent person to workwith or spend time with. She is the best manager anyone could ask for.”—An admiring co-worker

MAKINGADIFFERENCE“Wow, what an experience from the time I walked through the front door. Robert walked up tomeand handed me a flyer striking up a conversation. I asked him where the vacuums were locatedin the store and he walked me to the items showing me all the Dyson models I was interested in.After about 30 minutes he was on a ladder getting me the model I wanted, which was way up inthe rafters. He was the reason I bought the vacuum, as he was so fun and enjoyable. I originallywas next door at another store which had the same model but no one was around. Robert wasa complete joy until the moment I left. He brought my item to the cash and even offered to takeit to my car. Robert, keep up the great work because you made my whole day a lot brighter.”—Ahappy customer

ROBERT DOWNEY,hard-line sales associate,Home Outfitters store5169, Orleans, ON

At Zellers Ste-Dorothée inLaval, QC, a customer short ontime came into the store topurchase a shirt and a pair ofpants for a wedding he wasattending that afternoon.The pants he decided to buywere too long, so associateLouiselle Gingras, offered tosew the hem while he finishedhis shopping. The customer

was pleasantly surprised andreally appreciated the servicehe received.

Thank you, Louiselle, formaking a customer very happy!

EXCEPTIONALCUSTOMERSERVICE

CHRISTINEHILDEBRANDT,Sales Manager,the Bay store1119,Kelowna, BC

NANCY DUNN, StoreManager, Zellers store 220,Huntsville, ON

CAROLYN LACEY,Lingerie SalesAssociate, theBay store 1527,London, ON

LOUISELLE GINGRAS,store associate, Zellers store 409,Laval, QC

CUSTOMER SERVICE HEROES

ourpeople

21Hbclife

TEAMHbcAWARDSThe Team Hbc Awards Gala once again recognizedthe significant contribution of individual associatesand teams. The third annual event on May 8, 2008brought together nominees from across the country.The celebration included the presentation of thePinnacle Awards and the President’s Excellence

Awards for high performing merchandising teams and stores.Three associates were presented with the Pinnacle Award in recog-nition of their outstanding service for Hbc. Each of the winners

chose a $7,500 Hbc Shopping Spree or an once-in-a-lifetime trip tothe 2008 Summer Olympic Games in Beijing China:

�Francine Edisbury, POS Associate, Zellers Les Promenades St.Bruno, QC

�Mike Geary, Buyer, Zellers Kids’ Wear�Manjit Mundi, Store Manager, Zellers Conestoga Mall,

Kitchener, ON

Both FrancineEdisbury andManjit Munditook advantageof the trip tothe SummerOlympic Gamesin BeijingChina whichincludedseveral eventsto cheer onour Canadianathletes.

ASK CUSTOMERS TODAYFORGREATREWARDS2008 has been a very busy year for new credit initiatives with the automaticupgrades to the Hbc MasterCard®, the upgrade function at POS, the launch ofQuick Cash and new credit OPAL courses.

One of the biggest initiatives this year is the new associate incentive program—ACT (Ask Customers Today). ACT is our way of saying thank you for your focus onachieving top credit results. Associates receive up receive up to 25,000 HbcRewards points for instant credit applications, 10,000 Hbc Rewards points forupgrades, 80,000 Hbc Rewards points monthly for meeting or exceeding creditblend targets and 25,000 Hbc Rewards points for completing OPAL’s creditcourses. With all those points, redeeming your points for Hbc Gift Cards or fromthe Hbc Rewards catalogue is a great way to do some holiday shopping.

TIPS FOR THE BUSY HOLIDAY SEASON:�Offer Hbc Credit to every customer who does not have an Hbc MasterCard

or Hbc Credit Card.�Asking every customer to use their card is great way for them to get even

more Hbc Rewards points, which can be used for their holiday shopping!

FRANCINE EDISBURY (pictured with tour group guide) enjoyed the SummerOlympic Games in Beijing with her husband.

MANJIT MUNDI and her son took in the excitement ofthe Games at the aquatic centre in Beijing.

22Hbclife

Hbc continues to support Canadianathletes with events like the annualHbc Run for Canada on July 1, 2008and the Hbc Golf Tournament in June.

This year’s Run for Canadaraised an incredible $2 million. OnCanada Day, 14,363 participants in15 cities across Canada came out tosupport this great cause in Halifax,Montreal, Ottawa, Toronto, AlgonquinPark, Winnipeg, Saskatoon, Calgary,Vancouver, Victoria, St. John’s,Windsor, Red Deer, Edmonton andQuebec City.

On June 4, Hbcraised $500,000 forCanadian athletesat the Beijinginspired golftournament.

SUPPORTINGOURATHLETES

“Diverting these materials out of the wastestream helps our environment by reducing Hbc’senvironmental footprint. The plan also helps usachieve savings since we are not paying tohave the waste hauled away and dumped in alandfill - helping us to be both environmentallyas well as financially sustainable.”—Marc Gagnier,VP, Enterprise Store Operations

ACTINGWITHAGLOBALMINDIN JULY, Hbc RELEASED ITS SIXTHANNUAL CORPORATE SOCIALRESPONSIBILITY (CSR) REPORT,OUTLINING ACTIONS TAKEN IN2007 IN FOUR KEY AREAS:ENVIRONMENTAL SUSTAINABILITY,ASSOCIATE DEVELOPMENT ANDWELLNESS, COMMUNITYINVESTMENT, AND ETHICALSOURCING. 2007HIGHLIGHTSINCLUDE:

Check out the full Hbc Waste Diversion Work Plan on Hbcnet under Job Tools - Loss Prevention, in the Greening Hbc tab.Please continue to send your eco-conscious suggestions to Hbc Ideas hbc.ideas@hbcinternal.com.

OUR ACTIONS:�Hbc is reducing the amount of packaging

on products and eliminating PVC in productpackaging.

�Our head office was the first in Canada to becertified as ‘Zero Waste’, meaning over 95 percent of waste was diverted away from landfillsthrough recycling.

�The ‘greenest’ Zellers ever opened its doors inWaterdown, ON. The store features greeninnovations, including solar panels, wind turbinesand a ‘Zero Waste’ program.

�All Hbc stores are undertaking an intense wastediversion plan with the goal of increasing wastediversion from 56 per cent to 90 per cent. At theend of 2007, Hbc achieved that goal, with everystore diverting all clean plastic, fine paper, plastichangers, corrugated cardboard, cafeteria greaseand store-use print cartridges. All new Hbc storesare required to achieve a 90 per cent diversion rateat the outset. Hbc has committed to converting asmany as 40 of its stores to ‘Zero Waste’ in 2008.

ENVIRONMENTReduce, reuse and recycle. Hbc is committed to finding new ways to think green, whether it’s in ourhome office or at your local store.

From October 19 to 25, Hbc participated in Canada’s WasteReduction Week - a program aimed at increasing our wastereduction capacity and finding new ways to reduce, reuseand recycle.

23

community

HOLIDAY FUNDRAISING PROGRAMSHoliday fundraising for the Hbc Foundation is once again in stores with theholiday charity plush and Charlotte the 2008 Heritage bear. 100 per cent of thenet proceeds from the sale of these items are invested in charities across Canadathat build healthy families, create strong communities and inspire Canadians.

Introducing CharlotteNamed in honour of Charlotte Small, wife of leg-endary fur trader and mapmaker David Thompson,Charlotte is representative of women in the fur trade.Like her Native and Métis sisters, her skills as cook,pathfinder, labourer, seamstress, translator andnegotiator were a great advantage to her husbandin his work for Hbc and the North West Company.

The gift that givesThe new line of holiday plushcharacters are here. At $5.99, eachcharacter comes equipped with aclear plastic gift card holder,making it a perfect gift that givesto a good cause.

Cosmetic Charity BearThe cosmetic bear, $7.99 at the Bay,comes with a loot bag that can not onlyhold a gift card but also a small fragranceor cosmetic item.

SUPPORTINGCANADIANCOMMUNITIES

Hbclife

Charlotte,2008 Heritage Bear $9.99

ETHICAL SOURCINGHbc believes in an equitable andsustainable supply chain thataids in the economic developmentof the regions from which wesource our merchandise.

OUR ACTIONS:�All Hbc vendors are asked to

support our Code of VendorConduct, which requires themto produce their products in anethical manner and treat theirworkers fairly.

�Hbc introduced an online trainingtool to help associates understandour commitment to ethicalsourcing. In 2007, more than 750associates completed the course.

�Through the UN Global Compactand the UN’s MillenniumDevelopment Goals, Hbc isworking on programs to helperadicate poverty and hungerand help in efforts to achieveuniversal primary education.

ASSOCIATESAt Hbc, it’s our goal toprovide our associates withan environment in whichthey will continue to growand achieve their aspirations.

OUR ACTIONS:�Through ‘Earning Our Stripes’,

we are measuring how ourassociates feel about work-ing at Hbc and respondingwith targeted training anddevelopment opportunities.

�Hbc celebrates the achieve-ments of our associates. In2007, over 10,000 associatesand 36 teams were recog-nized for their achievements.

�In 2007, 45 per cent of allstores and distributioncentres achieved our goalof zero lost time injuries.

COMMUNITY INVESTMENTHbc believes giving translates into a powerful force of collectivegoodwill that reaches out into the community and the world at large.

OUR ACTIONS:�Hbc donated more than $10 million to national and regional charities

across Canada, including women’s shelters, local hospitals, breastcancer research and more.

�200 Canadian athletes each received $5000 and Hbc donated addi-tional funds to elite training facilities and athlete support programslike ‘Own the Podium’ and ‘Road to Excellence’.

�Hbc donated more than $1.5 million in artifacts, including precioussilver pieces, along with 1,395 feet of company records to theManitoba museums and archives.

�For the fifth year, Hbc and its customers raised money for theCanadian Breast Cancer Foundation during its annual Think Pink™campaign, raising more than $400,000.

Learn more about our commitment to social responsibility by visiting our 2007 Social Responsibility Report atwww.hbc.ca/CSR

Hbc Life is printed on Chorus Art Silk made from 50 per centrecycled fibre, contains 25 per cent post-consumer waste,is manufactured acid free and elemental chlorine free.© 1996 Forest Stewardship Council Cert. No. SW-COC-003272.

DID YOU KNOW?THE HOLIDAY SEASON IS all about tradition. And at the Bay we’re committed to helping our customerscreate their own beautiful holiday traditions. Since 1990 our Christmas Street private brand has beenhelping them realize their dreams. A registered trademark for Christmas ornaments, decorations andstationery, Christmas Street is more than a brand: it’s also a destination. For many Canadians, a trip toChristmas Street at one of the Bay flagship stores is a much-anticipated kick-off to the festive season.

DATES TO REMEMBER

To learn about what’s happening at Hbc, visitwww.hbcassociate.com - your one-stop shop for associateinformation, our intranet, Hbcnet at http://myhbcnet, orour retiree website -www.hbcalumni.ca.To learn more about Hbc’s history visit our heritage websiteatwww.hbc.com/hbcheritage.

SANTA CLAUS PARADESToronto November 16Vancouver December 7Montréal November 22

FRIENDS AND FAMILYthe Bay November 16 & December 7Zellers November 23 & December 14Home Outfitters December 7(December 6 - Winnipeg, MB only)

NEXT ISSUE OF Hbc Life April 2009

Christmas Street,the Bay Queen Street store, 2007

UNTIL ITS SALE TO THE LATE JERRY ZUCKER IN 2006, Hbcnever had a single owner. But during 335 years as a public entity,there were several majority shareholders who left their personalstamp on the business. The first of these was Thomas Douglas,5th Earl of Selkirk.

In 1811, Selkirk used his influence as Hbc’s largest shareholderto purchase over 30 million hectares (74 million acres) in the RedRiver Valley from Hbc for his colonial project to settle dispossessedhighland Scots. The settlement was immediately controversial.

The region not only straddled the North West Company’smain route to Athabaska, it encompassed a number of its forts.Moreover, settlement itself was problematic. The farmer and thefur trader are poor neighbours: the former’s success dependson clearing the forests that support the animals sought by thelatter. At Red River these tensions were exacerbated by thepresence of a unique local population – the Métis. Children ofFirst Nations and Europeans, the Métis had built a thriving localeconomy based on agriculture and the buffalo. The arrival ofsurveyors and settlers who did not recognize their claims to theland led to confrontation.

The two fur trade companies finally merged in 1821.Meanwhile two rebellions, in 1869 and 1885, would occur beforethe thriving community at the confluence of the Red andAssiniboine Rivers evolved into the modern city of Winnipeg.Selkirk lived to see neither event; he died of tuberculosis at theage of 42 in 1820.

THE POWEROF A SINGLE VISION