After 330 years of trading in Canada, Hudson's Bay is bought by a US investor

Its founding dates back to 1670, when it was incorporated with a royal charter from King Charles II that granted it a monopoly over the fur trade in what is now Canada. The power and influence of the Hudson's Bay Company grew until at one point it owned nearly a third of North America.

But now the company whose history is inextricably linked with that of Canada is being sold. Worse still, from the perspective of some Canadians, it is being bought by someone from the US.

The board and directors of the Hudson's Bay Company (HBC) announced that they have ended the long search for a buyer for what is modern-day Canada's largest chain of department stores and accepted a $980m (£550m) offer from Jerry Zucker, a South Carolina billionaire.

Mr Zucker, 55, whose holdings include chemical and textile companies and the South Carolina Stingrays ice hockey team, has promised that the unprofitable series of Bay stores will continue to operate and that he will spend money to try to pump new life into them. At the same time, the sale is an undoubted blow to national pride. "Hudson's Bay Company is a great Canadian icon," Thomas d'Aquino, president of the Canadian Council of Chief Executives, told The Washington Post. "It is arguably the Western world's oldest company."

The business's origins date to two French fur trappers who were looking for help and capital to set up an operation in the far north of Canada, which they had been told by native American Indians was rich in beaver and other animals. Having been turned down by the French authorities, they turned to the British, and with the backing of the Crown, a group of gentleman adventurers eventually set up a series of summer trading posts to collect the furs from trappers and Indians. In exchange they gave the Indians coloured beads and silk ribbons, knives, axes and the thick heavy blankets still sold at the 550 HBC stores.

Initially known as The Governor and Company of Adventurers of England trading into Hudson's Bay, and headquartered in Fort Nelson at the mouth of the Nelson River in present-day Manitoba, the company expanded quickly beyond its original area. As the land was trapped out and beavers became scarce, the operation moved further northwards, claiming more and more land. Eventually HBC laid claim to three million square miles, and three of its trading posts - Winnipeg, Edmonton and Victoria - became provincial capitals.

These posts also acted as a barrier to encroachment from the US. "They helped keep out the infernal Americans for a long time," said Ian Radforth, a professor of history at the University of Toronto. "When some American fur traders started moving into what we call the north-west, Hudson's Bay was there to say, 'This is our monopoly.' "

By 1870, however, under pressure from the British Crown, the company had reluctantly transferred most of its land to the newly confederated dominion of Canada. Over the years the company has also lost its associations with remoteness; in 1987 it sold its stores in the far north to a rival company, Northern, and concentrated on selling in urban areas.

But HBC, with 70,000 employees, has declined steadily since the early 1980s as a result of increased competition from US retailers. The company lost $38m in the third quarter of 2005.

Mr Zucker, who already owned a 19 per cent interest in HBC, had complained that the company's management was lacklustre. He initially offered to buy the whole company in October, but the board declined. When there were no other offers it accepted a fresh offer late last week.

"We are anxious to get to work with Mr Zucker on realising the value that we know is inherent in this great company," said HBC's president, George Heller.