Gordon Reid (businessman)
Encyclopedia
Gordon Reid is a Canadian
businessperson
. He is the founder of Giant Tiger Stores Ltd.
, Canada’s third-largest chain of discount store
s.
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. His own retailing career began at age 13, gift-wrapping parcels part-time at the Robert Simpson Company in Montreal. 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." 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.
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. 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
. The discount store concept did not yet exist in Canada, and it therefore represented a business opportunity.
, 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. 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. 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
. 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. 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. 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. A second store was not successfully opened until 1965, 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.
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.
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. 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 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.
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.' “
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.” 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, 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.”
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
and began to travel regularly to American markets to study Walmart and the survival strategies of its more successful competitors.
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. 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. Reid remains chairman of the board
.
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.
Reid has three children, including Canadian
Member of Parliament
Scott Reid
.
Canada
Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean...
businessperson
Businessperson
A businessperson is someone involved in a particular undertaking of activities for the purpose of generating revenue from a combination of human, financial, or physical capital. An entrepreneur is an example of a business person...
. He is the founder of Giant Tiger Stores Ltd.
Giant Tiger
Giant Tiger Stores Limited is Canada’s third-largest chain of discount stores . Following the 2006 acquisition of Zellers and its parent, the Hudson's Bay Company, by American entrepreneur Jerry Zucker, Giant Tiger became the largest Canadian-owned discount retailer...
, Canada’s third-largest chain of discount store
Discount store
A discount store is a type of department store, which sells products at prices lower than those asked by traditional retail outlets. Most discount department stores offer a wide assortment of goods; others specialize in such merchandise as jewelry, electronic equipment, or electrical appliances...
s.
Early life (1933-1961)
Reid was born in VancouverVancouver
Vancouver is a coastal seaport city on the mainland of British Columbia, Canada. It is the hub of Greater Vancouver, which, with over 2.3 million residents, is the third most populous metropolitan area in the country,...
in 1933 and as a boy moved to the working-class Montreal
Montreal
Montreal is a city in Canada. It is the largest city in the province of Quebec, the second-largest city in Canada and the seventh largest in North America...
suburb of Verdun. Reid's mother worked in the retail industry, behind the lunch counter at the Woolworth's in downtown Montreal. His own retailing career began at age 13, gift-wrapping parcels part-time at the Robert Simpson Company in Montreal. 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." 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.
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. 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
Ohio
Ohio is a Midwestern state in the United States. The 34th largest state by area in the U.S.,it is the 7th‑most populous with over 11.5 million residents, containing several major American cities and seven metropolitan areas with populations of 500,000 or more.The state's capital is Columbus...
. The discount store concept did not yet exist in Canada, and it therefore represented a business opportunity.
Struggling to survive (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 MarketByward Market
ByWard Market is a district in Lower Town located east of the government & business district, surrounding the market buildings and open-air market on George, York, ByWard and William Streets.The district is bordered on the west by Sussex Drive, on the...
, in the building that had formerly housed Ottawa’s French-language newspaper, Le Droit
Le Droit
Le Droit is a Canadian daily newspaper, published in Ottawa, Canada. Initially established and owned by the Missionary Oblates of Mary Immaculate, the paper was has been published by Gesca since 2000.-History:...
. Reid was so short of cash that he was unable to afford proper store fixtures, and had to build his own display tables. Initially, he had intended to name his store Top Value Discount, but discovered that in Canada, the “Top Value” trademark
Trademark
A trademark, trade mark, or trade-mark is a distinctive sign or indicator used by an individual, business organization, or other legal entity to identify that the products or services to consumers with which the trademark appears originate from a unique source, and to distinguish its products or...
was already owned by the Loeb
Loeb (supermarket)
Loeb was a Canadian supermarket chain in Eastern Ontario. It is owned by Quebec's Metro chain of grocery stores. It was once Ottawa's second-largest supermarket chain behind Loblaws. Each of the stores averaged in size...
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. 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
Shopping mall
A shopping mall, shopping centre, shopping arcade, shopping precinct or simply mall is one or more buildings forming a complex of shops representing merchandisers, with interconnecting walkways enabling visitors to easily walk from unit to unit, along with a parking area — a modern, indoor version...
. 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. 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. 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. A second store was not successfully opened until 1965, 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.
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. 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
Franchising
Franchising is the practice of using another firm's successful business model. The word 'franchise' is of anglo-French derivation - from franc- meaning free, and is used both as a noun and as a verb....
. A 1980 article describes Giant Tiger's franchise system this way:
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
F. W. Woolworth Company
The F. W. Woolworth Company was a retail company that was one of the original American five-and-dime stores. The first successful Woolworth store was opened on July 18, 1879 by Frank Winfield Woolworth in Lancaster, Pennsylvania, as "Woolworth's Great Five Cent Store"...
, Kresge
Kresge
- People and characters :* Cliff Kresge , an American professional golfer* Geoff Kresge, songwriter, guitarist, bassist with the band AFI* George Joseph Kresge , American mentalist better known as Kreskin or The Amazing Kreskin...
, Kmart
Kmart
Kmart, sometimes styled as "K-Mart," is a chain of discount department stores. The chain acquired Sears in 2005, forming a new corporation under the name Sears Holdings Corporation. The company was founded in 1962 and is the third largest discount store chain in the world, behind Wal-Mart and...
and later Zellers
Zellers
Zellers Inc. is Canada's second-largest chain of mass merchandise discount stores, with locations in communities across Canada. A subsidiary of the Hudson's Bay Company , it has 273 locations across the country....
." 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.
The first Giant Tiger franchise, for a store in Maniwaki, Quebec
Maniwaki, Quebec
Maniwaki is a town north of Gatineau and located north-west of Montreal, in the province of Quebec, Canada. The town is situated on the Gatineau River, at the crossroads of Route 105 and Route 107, not far south of Route 117...
, 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.' “
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.” 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, 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.”
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
Retail Industry Leaders Association
The Retail Industry Leaders Association is American trade association headquartered in Arlington, Virginia. RILA promotes consumer choice and economic freedom through public policy and industry operational excellence...
and began to travel regularly to American markets to study Walmart and the survival strategies of its more successful competitors.
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. In October 2010, Reid turned over the post of chief executive officer
Chief executive officer
A chief executive officer , managing director , Executive Director for non-profit organizations, or chief executive is the highest-ranking corporate officer or administrator in charge of total management of an organization...
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. Reid remains chairman of the board
Chairman of the Board
The Chairman of the Board is a seat of office in an organization, especially of corporations.Chairman of the Board may also refer to:*Chairman of the Board , a 1998 film*Chairmen of the Board , a 1970s American soul music group...
.
Board memberships and affiliations
- Board Member, Canadian Council of Chief ExecutivesCanadian Council of Chief ExecutivesThe Canadian Council of Chief Executives is an organization in Canada of chief executive officers of roughly 150 major Canadian corporations. The organization was founded in 1976 as the Business Council on National Issues, but renamed itself in 2001. The council actively comments on public...
; - Member, Canadian Council of Chief ExecutivesCanadian Council of Chief ExecutivesThe Canadian Council of Chief Executives is an organization in Canada of chief executive officers of roughly 150 major Canadian corporations. The organization was founded in 1976 as the Business Council on National Issues, but renamed itself in 2001. The council actively comments on public...
; - Board Member, International Mass Retail Association;
- Board Member, Ottawa Heart Institute;
- Board Member, Retail Industry Leaders AssociationRetail Industry Leaders AssociationThe Retail Industry Leaders Association is American trade association headquartered in Arlington, Virginia. RILA promotes consumer choice and economic freedom through public policy and industry operational excellence...
.
Lifetime achievement award
In 2010, the Retail Council of CanadaRetail Council of Canada
The Retail Council of Canada was founded in 1963. It is a Canadian not-for-profit association representing more than 40,000 stores of all retail formats, including independent merchants, regional and national mass and specialty chains, and online merchants...
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." 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."Reid has three children, including Canadian
Canada
Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean...
Member of Parliament
Member of Parliament
A Member of Parliament is a representative of the voters to a :parliament. In many countries with bicameral parliaments, the term applies specifically to members of the lower house, as upper houses often have a different title, such as senate, and thus also have different titles for its members,...
Scott Reid
Scott Reid (politician)
Scott Jeffrey Reid is a Canadian politician. He has served in the Canadian House of Commons since 2000, and currently represents the Ontario riding of Lanark—Frontenac—Lennox and Addington as a member of the Conservative Party....
.