Gordon Reid (businessman)

Gordon Reid is a Canadian businessperson. He is the founder of Giant Tiger, Canada’s third-largest chain of discount stores.[1]

Early life (1933-1961)

Reid was born in Vancouver in 1933 and as a boy moved to the working-class Montreal suburb of Verdun. Reid's mother worked in the retail industry, behind the lunch counter at the Woolworth's in downtown Montreal.[2] His own retailing career began at age 13, gift-wrapping parcels part-time at the Robert Simpson Company in Montreal.[3] In 1949, at age 16, Reid went to work full-time in the men's furnishings department at Simpsons after he had been expelled from school for what he describes as "misbehaving, setting a bad example, something that was quite small."[4] Over the next six years he gradually rose in the company. At age 22 he completed the company's management training program, but left Simpson's when he learned that his pay would remain fixed at $65 a week.[5]

In 1955, Reid was hired by Frank Hacking, a Toronto-based importer, to sell Japanese-made sporting goods to retailers in Quebec. In 1957, he moved to Windsor and set up an office for Hacking across the river in Detroit, to sell to American retailers.[5][6] It was in the American Midwest during the subsequent two years that Reid first saw discount stores—a new concept at the time. He was particularly impressed by Uncle Bill's, a chain headquartered in Cleveland, Ohio.[2] The discount store concept did not yet exist in Canada, and it therefore represented a business opportunity.

Giant Tiger

Early years (1961-1971)

Reid returned to Canada and in May 1961 opened the first Giant Tiger store, with a $15,000 investment. The store was located at the corner of George Street and Dalhousie Street in Ottawa's Byward Market, in the building that had formerly housed Ottawa's French-language newspaper, Le Droit. Reid was so short of cash that he was unable to afford proper store fixtures, and had to build his own display tables.[2] Initially, he had intended to name his store Top Value Discount, but discovered that in Canada, the "Top Value" trademark was already owned by the Loeb grocery store chain. According to Reid, he made this discovery when he spotted the name on the side of the carton from which he was pouring milk into his breakfast cereal.[2] His second choice was "Giant Tiger", a name which had not been trademarked in Canada, although it was then being used by another of the discount chains that he had encountered in Ohio.

Reid had chosen Ottawa as the location for his first store because he believed that public service paycheques would ensure a customer base with a stable income. As well, the city still had a relatively uncompetitive retail environment, and in particular, no shopping centres.[6] This initial choice would reflect a long-time focus on selecting locations (usually in small towns) that were sheltered from direct competition with other retailers.[6] Reid's intention was to build a national chain, due to his belief that it was necessary to place large-volume merchandise orders in order get the best prices, which could then be passed on to consumers.[7] However, for years it was not possible to put this strategy into effect, as Giant Tiger's expansion was initially extremely slow. In its first year, Giant Tiger’s total sales volume was only $139,781, and Reid had to rely upon his wife's income as a teacher to cover expenses.[8] A second store was not successfully opened until 1965,[2] and by the chain’s tenth anniversary in 1971, Giant Tiger had only expanded to six stores, and its survival rested, to a large degree, on the fact that it was servicing uncompetitive markets.

Finding a successful formula and expanding (1971-present)

Reid credits Giant Tiger's rapid growth in subsequent years to several changes in the company's business philosophy.

First, the chain altered its merchandise mix from its original focus on male-oriented merchandise such as hardware and sporting goods to an inventory emphasizing clothing and housewares, designed to attract a primarily female clientele. Since this change was made in the early 1970s, the chain's clientele has been about 75% female.[9]

Second, Reid made the key head office personnel into co-owners of the chain. By 1980, ownership was shared with ten other individuals. In a 1980 interview, Reid credited the agricultural cooperative movement as his inspiration for this innovation.[6] Making his employees into part-owners of the company ensured that, as in the coop movement, all employees would share a common interest in maximizing profits.

The third innovation, which Reid has always insisted is the most important component of Giant Tiger's long-term success, was its unusual method of issuing franchises. A 1980 article describes Giant Tiger's franchise system this way:

“ The company charges franchisees $1 up front plus a percentage of annual sales. Before the franchise is handed over, the manager must earn his Giant Tiger stripes by working for the company at least a year. Most franchisees come with recommendations from years of service in the retail business. 'We don't consider a person unless he has oodles of experience,' says Reid.[6] ”

The practice of issuing $1 franchises and of attracting the best managers from other chains has continued essentially unchanged since that time. In 2010, Reid reported that the issuing of no-cost franchises to experienced retailers "was a great way to get experienced people. Over the years we had a lot come from Woolworth, Kresge, Kmart and later Zellers." In the same interview, Reid stated that over twenty Giant Tiger franchises are now run by former Walmart employees, most of whom had been attracted by the same franchise system that he had introduced decades earlier.[4]

The first Giant Tiger franchise, for a store in Maniwaki, Quebec, was issued in the late 1960s to Jean-Guy Desjardins. The benefit of this new way of operating was felt immediately. Up to this point, Reid and his small head office staff had been trying to make all key decisions, with the result that, despite its small size, the chain was slow-moving and inflexible. But from the moment the change was made, “the [Maniwaki] store made money and I didn't have to do anything. [Jean-Guy Desjardins] did the advertising, he found the location, he merchandised it to suit his customers, he did everything…. And, I thought, 'by golly, that's a good system.' “[7]

The greater autonomy that could be permitted to franchise owners whose personal financial interests were symmetrical with those of the head office meant that there was less need for Giant Tiger to develop centralized systems. Eleven years after Giant Tiger's first experiment with franchising, Reid emphasized the flexibility that it gave his company: "The weakness of the chain stores is that they try to standardize."[6] Such standardization was not possible in a small chain which at the time maintained its low prices by locating in awkward and non-standard spaces such as converted bowling alleys or garages,[6] and which refused to put money into standardized fixtures or furniture, or to invest in standardized office systems. One newspaper reported that "Giant Tiger defiantly pretends the computer hasn't been invented. Its idea of a sophisticated inventory and accounting system is a bigger filing cabinet."[6]

In the early 1990s, as rumours spread of Walmart's likely expansion into Canada, Reid began to prepare his company for the challenges that would be associated with a much more competitive retail environment. He became a director of the Washington D.C.-based International Mass Retail Association[5] and began to travel regularly to American markets to study Walmart and the survival strategies of its more successful competitors.[7]

In more recent years, Reid has slowly been relinquishing direct control of Giant Tiger. In 1999, Reid resigned the presidency of Giant Tiger in favour of Jeff York, an executive with ten years' experience at the company.[10] In October 2010, Reid turned over the post of chief executive officer to Andy Gross, an executive with over 25 years' experience at Giant Tiger, who had, by this time, already inherited the presidency from Jeff York.[11] Reid remains chairman of the board.[11]

In 2013, news began to spread that the company was exploring the option of a possible sale. While the business remains profitable, Reid, as its largest shareholder, declared that he was looking for other opportunities after being in the business for more than 50 years. [12]

Board memberships and affiliations

Lifetime achievement award

In 2010, the Retail Council of Canada awarded Reid its Lifetime Achievement Award. The press release for the award cited both Reid’s history as founder of Giant Tiger and the company’s $2 million in annual donations to charity and community associations.

Personal life

In 2010, even after handing over the reins as CEO, "Reid still goes to work six days a week."[4] However, he claims that "I have been cutting down my involvement over the years. I used to come in at 6 a.m. and leave at whatever at night. Now I come in when I feel like it and leave when I feel like it."[11]

Reid has three children, including Canadian Member of Parliament Scott Reid.

References

  1. ↑ "About Giant Tiger / History". gianttiger.com. Retrieved September 28, 2009.
  2. 1 2 3 4 5 Laurie McBurney, "Giant Tiger roars loud in the discount jungle". Ottawa Citizen, November 29, 1999, p. D3.
  3. ↑ "Profiting from the bargain basement," in The Enterpriser, (Ottawa), vol. 4, no. 5 (1981).
  4. 1 2 3 Hugh Paterson, "A retail giant earns its stripes", Edmonton Journal, May 10, 2010.
  5. 1 2 3 John Schofield, "Gordon Reid: Lifetime Achievement Award", in Canadian Retailer, July/August 2010, p. 47.
  6. 1 2 3 4 5 6 7 8 Gordon Pitts, "Tightwad philosophy keeps Tiger running", Ottawa Citizen, September 27, 1980.
  7. 1 2 3 Kristin Goff, "Canada's national Tiger", Ottawa Citizen, Nov. 17, 2007.
  8. ↑ Mark McNeil, "Giant Tiger built on lots of cheap goods". Hamilton Spectator Oct. 27, 2001, p. B1, B2.
  9. ↑ Rita Zekas, "Store Gazing: Giant Tiger puts the bite on prices", Toronto Star, June 18, 2010.
  10. ↑ Richard Roik, "Roaring Start for prez." Ottawa Sun, Sept. 15, 1999, p. 38.
  11. 1 2 3 Vito Pilieci, "New CEO grabs Tiger by the tail", Ottawa Citizen, October 15, 2010.
  12. ↑ "Discount retailer Giant Tiger exploring options, including possible sale.".
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