Isaac Wolfson’s silent invasion of Canada
Few Canadians have ever heard of Isaac Wolfson, the commonwealth’s biggest retailer. But in three years this aggressive and fast-talking Scot expects to have a store on every main street in Canada
A CHUNKY aggressive Scotsman whose name is almost unknown to the Canadian public is embarked on a multi-million-dollar gamble that may make him one of the country’s biggest retailers. He’s Isaac Wolfson, of Glasgow, who lives by the slogan “time is money” and who, in his forty-five years from factory hand to store magnate, has become the biggest retailer in the British commonwealth.
Wolfson owns one hundred and fifteen retail outlets in Canada and these are backed up by six hundred and fifty stores in Britain, forty-five stores in South Africa and seven hundred factories. His gross profit last year from all operations was nineteen million pounds. The aim of his Canadian operation is to have a store on the main street of every city by the end of 1959.
His present Canadian stores—some of them household names, but none bearing the name of Wolfson-—a^e¿*9*?trolled by Great Universal Stores (Canada) Ltd., wlíiüh fc««*'offices in the new fifty-thousand-square-foot store of Woodhouse and Co. on Côte de Liesse Road in suburban Montreal. This holding company controls five subsidiaries, one of them being Woodhouse and Co. itself, which operates stores in Montreal, Ottawa, Quebec’s Eastern Townships and Sarnia, Ont.
HOW WOLFSON’S EMPIRE IS GROWING IN CANADA
The biggest group of Canadian stores under Wolfson’s control is Legare Co. which owns fifteen outlets in Montreal and fifty more in other Quebec towns and cities. Next is Adams Furniture Co., with twenty-five stores in Toronto and such Ontario communities as Guelph, Galt, Stratford, Brockville and Smiths Falls. Two other stores in Montreal and Ottawa belonged formerly to C. W. Lindsay and Co. Wolfson’s latest Canadian acquisition is Forst’s Ltd., of Vancouver. He bought their seven suburban stores last year.
None of Wolfson’s Canadian stores is as big as the major outlets of companies like Eaton’s, Simpson’s, Morgan’s, the Hudson’s Bay Co. or Woodward’s. Wolfson likes to call his Canadian buildings “semidepartment stores.” Most of them are oneor two-story structures in suburban shopping centres or in the downtown areas of small municipalities.
Most of the stores sell furniture, hardware and clothing. Some specialize to a greater extent in one or the other. A feature is made of British appliances, carpets, textiles, linoleum and tools.
Each Canadian subsidiary is managed by a resident board of directors, some of whom have been taken over from the former owners. Efforts are made to avoid uniformity in appearance or policy of the stores and to preserve original characteristics. When Wolfson buys a Canadian store few of the customers realize that there has been any change in ownership, although his brother Charles is boss of the Canadian branch.
But behind this so-far unobtrusive invasion into Canadian retailing stands an international colossus, the Great Universal Stores Ltd., of London, England, which has assets of one hundred and eight million pounds and employs more than fifty thousand workers. And controlling its destinies is fifty-nine-year-old Isaac Wolfson who, at fourteen, was a five-shilling-aweek factory worker in Glasgow, and who more recently, on the death of Armenian billionaire Calouste (Five Percent) Gulbenkian, was tipped by the London Sunday Chronicle to inherit Gulbenkian’s title as the “richest man on earth.”
Like Gulbenkian, Wolfson is both an aggressive person (in business) and retiring (in his public life). Standing five feet five inches tall, and weighing one hundred and seventy pounds, his stocky figure is topped by strong square features and a heavy crop of greying hair. To many he suggests Edward G. Robinson in the role of a tycoon. He injects so much galvanic energy into the company’s affairs that he has few interests outside business.
The showmanship he imparts to his company’s annual meetings also produces many a sniff in the City of London where money-grubbing and high formality are regarded as inseparable. But to his shareholders Wolfson is a shining idol.
When he gathers them once a year in London’s swank Dorchester Hotel to tell them how he’s doubled their money, proceedings begin with the dramatic booming of a gong. Then a velvet curtain rises to reveal Wolfson on the stage, grinning like a schoolboy. Although he normally wears black or dark grey suits, he dresses up for shareholders’ meetings in clothes of bright color and informal cut, and glows against the funereal background of his more conservatively clad fellow directors. At question time Wolfson usually gives an impressive demonstration of arithmetical gymnastics. The meetings sometimes end with applause and shareholders shouting For He’s a Jolly Good Fellow—and with good reason.
Before World War II Wolfson was unheard of by the British public. Now he is proclaimed in almost daily headlines as a pillar of the United Kingdom’s export trade. In twenty-four years he has transformed an obscure, almost-bankrupt mail-order business into a manufacturing, wholesaling and retailing leviathan that rivals Sears, Roebuck and Montgomery Ward in the United States. In spurts of postwar expansion the Great Universal Stores Ltd. has been known to absorb rival companies at the rate of one a day.
Sales boomed so rapidly after the war that profits before taxation increased from three million pounds in 1948 to a whopping nineteen million pounds last year. Two years ago the soaring profits precipitated a fever of speculative trading in the company’s shares on the London Stock Exchange. Every pound invested in 1953 was worth ten pounds in 1954. Every pound invested in the company before the war is today worth twenty-seven pounds.
Rivals have described the Great Universal Stores Ltd. as “a business Frankenstein” and pessimistic economists have divined in its lavish extension of credit the seeds of another slump. It has been estimated that five million time-paying customers owe the company fifty million pounds, or nearly one hundred and fifty million dollars. Even so few customers seem to bear their creditor malice.The company is known affectionately, on the basis of its initials—G. U. S.—as “Gussie’s.”
The triumph of Gussie’s is ascribed by London financial editors to four major factors.
Wolfson was the first man to offer Britons time-payment terms on the generous North American scale. Before Wolfson sprang into the retail field the average Briton bought only cars, heavy furnishings, washing machines, refrigerators, television and other costly units on what he called “the hirepurchase system” or, less x'everently, “the never, never plan.” Today, in a Wolfson stoi-e, he may buy a lampshade, an occasional table, a set of sheets, a pair of pants, or any small item he likes by installments.
Another reason for Gussie’s growth has been Wolfson’s departure from exaggerated British standards of durability which had kept prices high and sales down. He specializes in attractively designed mass-produced articles and undersells his competitors.
The third explanation for Gussie’s success lies in the fact that Wolfson, in addition to his eight hundred stores, runs seven hundred factories, large and small, which supply his outlets. With the middleman eliminated, he can sell for less. In these factories Wolfson turns out everything from handkerchiefs to carpets, ashtrays to electric stoves, baby chairs to chesterfields, costume jewelry and fur coats.
Gussie’s has scored in a fourth way by Wolfson’s introduction of a novel sales technique. In smaller British towns with no Gussie store some fortyfive hundred door-to-door salesmen call on householders with a thick catalogue, take orders on short-term credit for the illustrated items—mostly dry goods—and a month after delivery call personally to pick up the payment and try to sell something else.
In a cautious squaring-up for the inevitable battle with Canada’s retailing giants, Wolfson relies heavily for custom on British goods that may be sold more cheaply than comparable American or Canadian articles because of lower labor costs and a favorable exchange rate. Wolfson also takes unashamed advantage of “Buy British” sentiments in Canada.
Canadians owe him millions
According to a director of Wolfson’s empire in Canada, the business of the average store has increased fourfold since Wolfson took over. Although the annual profits of the Canadian operation are lumped in with those of the parent company, and therefore indistinguishable, they are reputed to be well over two million dollars a year. Two years ago Wolfson said in Montreal that he was owed fourteen million dollars by installment-buying Canadians. Alexander Forst, from whom Wolfson bought Vancouver’s Forst’s Ltd. for a million dollars last year, says, “To say Wolfson is a keen businessman is an understatement. I hear that in his first year’s trading he made ten percent out of my old group. That’s better than I was ever able to do. I don’t know how he does it.”
According to Lord Beaverbrook’s London Sunday Express, Wolfson almost amalgamated in 1953 with the Robert Simpson Co. of Toronto, but changed his mind at the last minute.
Often Wolfson proceeds far into a deal and then, as if sensing a trap ahead, withdraws. This reconnaissance-patrol technique paid off early last year when Wolfson joined Lord Kemsley, one of Britain’s most influential newspaper peers, and Maurice Winnick, a topflight impresario, in a television production company preparing for the opening of Britain’s first commercial programs.
A few weeks later Wolfson stepped down. He is reputed to have done this after realizing that the average television set in England was equipped to receive on one band only—the single channel used by the non-commercial BBC. The cost of adapting the average set to receive a second band was ten pounds. Wolfson is said to have predicted that the average owner wouldn’t adapt until he was sure the commercial programs were worthwhile. He was right. When commercial television began last fall the costly sponsored shows were watched by only a handful of viewers. Everybody else was waiting to see the shows on somebody else’s set before adapting his own. For months, as an advertising medium, the commercial programs were a resounding financial flop. And Wolfson was in the clear.
Wolfson’s astuteness is legendary at Universal House near Oxford Circus in London’s West End. Here he conducts his business with much waving of arms, many delighted chuckles and a frequent stabbing at columns of figures with his stubby forefinger. He converses in the flat braying tones of his native Glasgow. Shorthand writers estimate the speed of his speech at around two hundred and fifty words a minute.
Most visitors find him appealing but exhausting. “You have to be ready to have your shoulder clutched at any moment as Wolfson makes a point,” says George Thomson, a London financial writer. “You have to be ready to leap out of your chair and follow as he dashes to another room to seize a file to make his argument conclusive.” Sometimes he presses a button, raising automatically a curtain over a diagram of the entire Gussie web. “But before you have time to count half a dozen companies,” says Thomson, “the screen is lowered again.”
Frederick Ellis, financial editor of the London Daily Express, says Wolfson cloaks his own holdings in the names of nominees. Two years ago Ellis estimated Wolfson’s personal holdings in Gussie at well over two million pounds. “And he has been buying heavily from other shareholders ever since.”
One of Wolfson’s favorite occasions is the annual shareholders’ meeting. At the 1952 meeting Wolfson was asked to adjourn the meeting for ten minutes so a group of shareholders could frame a question. Without hesitation Wolfson replied, “We paid five million seven hundred and twenty thousand pounds sterling in taxes last year. As there are fifty-two weeks in the year that is one hundred and ten thousand pounds a week. As we work a five-day week that is twenty-two thousand pounds a day. We work an eight-hour day, so that is two thousand seven hundred and fifty pounds an hour. That is forty-five pounds a minute. Ten minutes would cost us four hundred and fifty pounds or thirteen hundred and fifty dollars. Neither we nor the government can afford a ten-minute adjournment.”
Wolfson is forever valuing his company s time in terms of minutes. Recently he estimated that Gussie’s earned the equal of four pounds a minute every minute in the year. His favorite expression at shareholders’ meetings is “Good Heavens!” and his favorite cliche is “time is money.”
Wolfson enjoys board meetings too. With more than a hundred subsidiaries in his network, he gets plenty of opportunity for pleasure. At 10.30 one morning in 1953 he attended a board meeting of Cavendish Furniture Ltd., at 10.45 of Jackson’s Stores, at 11.30 of Smart Brothers, and at 12 of Leslie’s Stores. For two and a half hours before this marathon he had dictated letters, studied statistics and held conferences in his office. For four hours afterwards he was equally busy. Once a month he is shown on a single sheet of paper a digest of the financial position of all his companies. If there is anything unsatisfactory he goes into it at once and never stops badgering his executives until it is put right. He drives his upper echelon hard, pays them well, and promotes them. He says, “It is very thrilling for me to discover a good man working for a modest salary and to see him getting steadily on until he is earning many thousands of pounds a year.”
Traveling never interferes with Wolfson’s work. He makes several crossings of the Atlantic every year in either the Queen Mary or Queen Elizabeth, working daily in his cabin with a group of aides. Once, in a radiotelephone conversation from the Queen Mary, he offered one million pounds for Jones and Higgins Ltd., a London suburban department store, and heard his party at the other end exclaim, “Done!”
He uses the telephone incessantly for dozens of side deals. In 1948, in three minutes, he bought and sold by telephone the Cadogan Hotel, Chelsea, and the Beacon Hotel, Crowborough.
As he works Wolfson rumples his thick grey hair, undoes the bottom buttons of his waistcoat and fumbles in the top right-hand drawer of his desk for a chocolate biscuit from a tin his secretary refills at frequent intervals.
Wolfson doesn’t mind guests smoking and drinking in his own home but detests these habits during business hours. Visitors to his paneled office are expected to observe a big “No Smoking” notice on the wall. He doesn’t smoke or drink himself.
Wolfson frequently takes work home, sitting up until two o’clock in the morning and fortifying himself with glasses of hot milk or iced cola drinks. He is up at 6.30 a.m. and out at 7.30. From his apartment in Portland Place, near Madame Tussaud’s wax works in an elegant quarter of Marylebone, he walks to his office in ten minutes. He has been known to fret and fume while waiting to talk on the telephone with business associates who observe the customary London ten o’clock start.
Wolfson first became associated with the Great Universal Stores in 1932, when he was thirty-five, but he was making more than thirty thousand pounds a year before then. His first job, at fourteen, was in a tiny furniture factory in a poor district of Glasgow.
This was owned by his father, an immigrant from Central Europe. Wolfson’s task was stamping out the backs of cheap chairs.
When Wolfson reached his early twenties, his father sent him to London to try to promote sales in the teeming East End. Wolfson was paid ten pounds a week. From this moment on Wolfson began to soar. His father’s factory was incapable of meeting the volume of his orders, so Wolfson became a salesman-merchant, buying from other sources and selling at a profit.
During the early part of the Depression he was a familiar figure in the industrial areas of Birmingham, Manchester, Liverpool and other big midland cities, always well-dressed, always talking like a machine gun, always smiling and forever offering goods at prices within the reach of poorly paid working men.
By 1932 Wolfson was selling regularly to the Great Universal Stores Ltd., an obscure enterprise based in London, Manchester and Glasgow which specialized in small advertisements and mail-order sales to lowerincome groups. Wolfson had impressed one of the directors with his drive and acumen. As the Great Universal Stores was on the brink of bankruptcy this director suggested Wolfson would be the man to save the firm. In the face of heated opposition from another director Wolfson was appointed to the board. The hostile director wrote: “The appointment of Isaac Wolfson signals the death knell of this business.”
Gussie’s caused a furore
By 1940 Wolfson had transformed a succession of annual losses into an annual profit of three hundred and fifty thousand pounds. Five years later he had become chairman and he began plunging the company’s accumulated capital into the fastest business expansion London had ever seen. He also borrowed on a scale that made rivals gasp. He bought up by the dozen companies that were famous when Gussie’s meant no more than a three-inch advertisement in a pulp magazine—among them the makers of the famous Burberry raincoat.
Through his purchase of the British and Colonial Furniture Co. in 1945 Wolfson also acquired its Canadian subsidiary, Woodhouse and Co. of Montreal. With loans from Montreal banks Wolfson then bought the Legare Co., C. W. Lindsay, Adams Furniture Co. and others in Ontario.
In 1954 Gussie’s declared a dividend of sixty percent and started a furore on the stock exchange. Intérest in the company’s progress was so wide in the United Kingdom that news stories were switched from the financial to the front pages.
Under headlines like “The Man Who Can Never Stop Buying” and “Will His Appetite Kill Him?” the prudence of Wolfson’s rate of expansion was questioned. Once, when asked why he didn’t stop expanding and consolidate for a change, Wolfson retorted, “Expansion is consolidation.”
The British press has also argued about the wisdom of Wolfson’s lavish extension of credit. In the Sunday Express, of London, Edward Westropp sounded a note of alarm. “I remember the monumental collapse of the Wall Street market in 1929,” he wrote, “a collapse which was brought about largely by overtrading on hire purchase.”
R. A. Butler, former Chancellor of the Exchequer, was evidently in the same mood last fall when he introduced an emergency budget making time payments less attractive. A few days later, in his annual report, Wolfson defended himself defiantly. He revealed that only twenty percent of Gussie’s transactions were time-payment deals; the remaining eighty percent were cash or short-term credit.
When Wolfson bought Drages Ltd., one of the first British home-furnishings companies to specialize in time-payment. sales, he encountered a curious phenomenon in Britain’s attitude toward this type of trading. Before the last war Drages had been keenly conscious of the sense of shame prevailing in Britain about buying “on the never, never.” To preserve its customers from the stigma of trading with a company so well known for its credit arrangement, Drages used to advertise in big black type: “All goods delivered in a plain van.” The advertisement became a music-hall joke.
Wolfson believed the war brought about a change in British sentiment. He ordered Drages to drop the “plain van” ads. He tested his theory further last year when he built into Jay’s Ltd., one of his furniture stores on Oxford Street, a de luxe lounge equipped with television sets for entertainment. Here cusiomers who wished to buy on time were expected to wait for their interviews with the credit clerks. No attempt was made to give these customers concealment or privacy. On the opening day the lounge was packed. It kas been ever since.
Wolfson’s optimism is unquenchable. “I anticipate,” he once said, “a continuing period of prosperity, and I rely on the integrity of the working man. I find the working man is ninety-nine percent honest. I have very few bad debts.”
Wolfson is a devout Jew and a devoted family man. On Saturdays, the Jewish Sabbath, he never speaks of business until after sundown. His brother Samuel, who takes a small part in the business, clings to the traditional Jewish beard. Wolfson has set up a two-million-pound trust fund for his dark, plump and pretty wife lidie, whom he met and married in London more than thirty years ago, and for his eight sisters.
The sisters are a lively element in the frequent family gatherings at Wolfson’s homes. In London he owns an entire apartment house in elegant Portland Place; he occupies a nineteenroom apartment in the building, rents out the remainder of the building. The elaborate furnishings and decorations cost him thirty thousand pounds. During the war his importance as an exporter of textiles and manufacturer of electrical instruments for war machines, was so great that his was the only apartment in Portland Place not requisitioned as a billet for U. S. Air Force personnel. He also has a country home on the outskirts of Worcester, a hundred miles north of London.
Mrs. Wolfson works with subtlety to interest her husband in affairs other than business. On her urging he agreed to sit as chairman of the board of Palantype College, a private school which, to his astonishment, he acquired when he bought out Smart Bros., the well-known home-furnishings dealers of High Holborn, London. The college, once a tenant of Smart’s, was eventually taken over by the company.
She has also involved him in the charitable functions of the Marylebone Jewish Society, and six years ago Wolfson gave one hundred thousand pounds to the Weizmann Institute of Science in Rehovoth, Israel.
It was on his wife’s prompting, too, that he accepted a vice-presidency of the Empire Arts Council and contributes heavily toward the annual cost of bringing commonwealth artists to London.
He steps out to high-society gatherings more frequently now, thanks to his wife, but still he favors vaudeville shows and movies for relaxation. He prefers ganster films but rarely bothers to look up “what’s on” before leaving home. A couple of years ago Wolfson and his wife decided to go to The Plaza, a big West End cinema. They reserved seats, as is customary in London, and on hearing how much they’d be Wolfson remarked, “Prices are going up.” When they arrived at the theatre they found a yelling crowd round the front door and the hall full of celebrities. Mrs. Wolfson was confused when she was asked for her autograph. “We didn’t even know what was showing,” she gasped, “let alone that it was a big night.” They had stumbled on the first night of the Audrey Hepburn movie Sabrina, and the audience was packed with merchant princes, nobles and famous artists.
In that company Wolfson was by no means out of place, for he has become a merchant prince of the first rank himself. He has announced that his entry into Canada was designed to furnish a beachhead for a further advance into the U. S. “My plan,” he once said, “is to bring direct to the whole of North America low-priced British quality goods.”
A year ago he shook New York’s Wall Street by negotiating to buy the vast Montgomery Ward chain in the U. S. He backed out of the deal at the last moment with the typical statement: “We should wait until a better opportunity arises.” Those who know Wolfson are sure that ultimately it will arise and, when it does, Wolfson will know what to do with it.