James Calexte (Jimmy) Watson first opened the Carlton premises of J.C. Watson Wine Merchants in three small Lygon Street houses after relocating from nearby Gertrude Street in Fitzroy in 1935. At this time in Australia most men drank beer, women drank very little and seldom in public. The most common wines offered were ‘threepenny dark’ port and sweet sherry and Jim knew he had his work cut out to introduce unfortified table wine to the Australian drinking palate. Australia was growing up – the business was successful and grew rapidly.

Around 1940 Jim started organising trips to N.E. Victorian vineyards. He purchased wine from established producers to delight and educate his customers. Typically he selected hogsheads (large barrels containing approximately 300L.) of his favourite wine styles; dry whites, young reds and great fortified wines to be taken back to the bar to be sampled and bottled for sale. He marked these hogsheads with a Lion roaring over a barrel, a feature still found on the labels of Jimmy Watson wines today.

In 1960 Jim decided to redesign the premises to better incorporate the three shops on the current Lygon Street site as a dedicated wine bar and bistro. The most important aspect of the renovation was that the building must have atmosphere.
A regular customer, Roy Grounds (later Knighted by Queen Elizabeth II in 1969) was
commissioned to do this, but owing to his already heavy workload he delegated this task to an up and coming architect, Robin Boyd, who submitted various designs for the renovations. The present design was accepted and renovation completed in mid-1963.