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The Company was founded by Hugh Fraser and James Arthur in 1849 as a small drapery shop on the corner of Argyle Street and Buchanan Street in Glasgow, Scotland trading as Arthur and Fraser.
Hugh Fraser had been apprenticed to Stewart and McDonald, a Glasgow drapery warehouse where he rose to the position of warehouse manager and from where he brought many of initial customers.
James Arthur also owned a retail drapery business in Paisley, near Glasgow: he appointed a manager to oversee the Paisley business while he focused on his new business.
The Company established a wholesale trade in adjoining premises in Argyle Street.
In 1856 the wholesale business moved to a larger site in Miller Street, Glasgow and started to trade under the name Arthur and Co. The retail side of the business expanded into the vacant buildings left by the wholesale side.
During the late 1850s and early 1860s the retail business was run by a professional manager - first Thomas Kirkpatrick and then Alexander McLaren.
In 1865 the partnership between the partners was dissolved and Fraser assumed control of the retail business leaving Arthur with the wholesale business.
In 1865 Alexander McLaren joined the retail business and the name was changed to Fraser and McLaren.
When the first Hugh Fraser died in 1873, his three eldest sons, James, John and Hugh, acquired stakes in the business. James and John Fraser were initially directors in the business and employed Alexander McLaren and later John Towers to manage it for them.
In 1891 Hugh also joined the partnership which by then was called Fraser and Sons