Irving was separated, but not divorced from his wife. Terry was separated from Wardell in 1881, and Irving was godfather to both her children. They travelled on holiday together, and Irving wrote tender letters to Terry. In London, Terry lived in Earls Court with her children and pets during the 1880s, first in Longridge Road, then Barkston Gardens in 1889, but she kept country homes. In 1900, she bought her farmhouse in Small Hythe, Kent, where she lived for the rest of her life. In 1889, her son joined the Lyceum company as an actor, appearing with the company until 1897, when he retired from the stage to study drawing and produce woodblock engravings. Her daughter Edith also played at the Lyceum for several years from 1887, but she eventually turned to stage direction and costume design, creating costumes for Terry, Lillie Langtry, and others early in the 20th century. In 1902 Terry played Mistress Page in "The Merry Wives of Windsor", with Herbert Beerbohm Tree as Falstaff and Madge Kendal as Mistress Ford. In the 1890s, Terry had struck up a friendship and conducted a famous correspondence with George Bernard Shaw, who wished to begin a theatrical venture with her. In 1903, Terry formed a new theatrical company, taking over management of the Imperial Theatre with her son, after her business partner Irving ended his tenure at the Lyceum in 1902. Here she had complete artistic control and could choose the works in which she would appear, as Irving had done at the Lyceum. The new venture focused on the plays of Shaw and Henrik Ibsen, including the latter's "The Vikings" in 1903, with Terry as the warlike Hiordis, a misjudged role for her. Theatre management turned out to be a financial failure for Terry, who had hoped the venture would showcase her son's set design and directing talents and her daughter's costume designs. She then toured England, taking engagements in Nottingham, Liverpool, and Wolverhampton, and created the title role in 1905 in J. M. Barrie's "Alice-Sit-by-the-Fire" at the Duke of York's Theatre. Irving died in 1905, and the distraught Terry briefly left the stage. She returned to the theatre in April 1906, playing Lady Cecily Wayneflete to acclaim in Shaw's "Captain Brassbound's Conversion" at the Court Theatre and touring successfully in that role in Britain and America.