On the road with Jimmy Pattison, “Canada’s Warren Buffett”

At 86, Jimmy Pattison is still the driving force behind his $8.4-billion empire.

In late June, Jimmy Pattison was looking forward to a road trip he expected would fill up the first week and a half of July. With Mary, his wife of 63 years, and his golden retriever, Pattison was planning to drive a Ram pickup some 2,000 kilometres through rural Saskatchewan. “I’ll start with Major; go up to Luseland, Unity, North Battleford, Meadow Lake, Prince Albert; then work across to Kelvington, Saskatoon; then over to Hudson Bay—that’s the old Hudson Bay Junction—then down to Yorkton and over to Moosomin,” he says. “The big circle.” It’s not surprising that the names of Saskatchewan whistle stops should trip so easily off the tongue of Pattison, whose Jim Pattison Group owns everything from the Save-On-Foods stores that blanket Western Canada to Toronto’s Ripley’s Aquarium and a large share of the billboards and car dealerships in between. His family left Luseland for Vancouver when he was five. Mary grew up in Moose Jaw, Sask. Jimmy spent summers working on his mom’s family farm in Major, and as a teenager barnstormed church camps around the province, playing his trumpet. Pattison doesn’t know exactly when he’ll be in which town, so he hasn’t made reservations. “We’ll stay in motels,” says Canada’s wealthiest individual (worth $7.9 billion as of last fall). “Motels that take dogs.” An 86-year-old embarking on what might be one last trip to visit childhood haunts: It could be the bittersweet plot of a film like Nebraska or About Schmidt. But the sentimental storyline would have missed the mark. In truth, the rationale for the trip has as much to do with gold as golden age. Early in 2014, he picked up two John Deere tractor dealerships that operate 15 locations in Saskatchewan. Then in July of the same year, he bought nine Prairie radio stations. Pattison’s big circle route connects many of the new businesses, which, in most cases, weren’t given any warning that he’d be showing up. READ: Jim Pattison partners with Quality Foods Getting a visit from Jimmy is always a little nerve-racking, even when it’s routine, former employees say. When Pattison arrives on site, it’s partly to fly the flag, but it’s also to confirm in everyone’s mind that, while independence and initiative are valued and supported, the rationale behind everything is the pursuit of growth and profit—and the proprietor is definitely watching. Of course, the question in a lot of people’s minds is how long an 86-year-old can keep up his intense personal scrutiny of a sprawling business empire that grosses $8.4 billion annually and employs 39,000. When will this road trip end, so to speak? And, perhaps more important, what will happen to the Pattison Group when Jimmy reaches his destination? Lots of people, whether customers, competitors or employees, are asking the second question. But those 39,000 employees had better not be thinking the answer to the first one is “soon.” During the course of an increasingly rare interview, the founder and sole owner of one of Canada’s largest private companies gives no indication of slowing down. He comes across as exactly the hyperfocused operations guy he was at, well, 75. In many cases, he even offers up the same responses, which are often folksy and, even more often, unrevealing. Pressed as to whether Pattison has changed during the 52 years she’s been with him, his personal secretary, Maureen Chant, laughs. “He’s smarter than he used to be,” she says, but otherwise, nope, not a bit. Nor has there been a let-up in his 60-hour work weeks and unrelenting travel. “I’m travelling more than I ever have,” Pattison says. “We have over 500 locations, and we’ve always spent our time in the field as much as we can.” READ: After big Loblaw and Sobeys deals, will Metro go west? With one exception, Pattison’s packing strategy has not changed much either. He carts along up to seven briefcases, each one dedicated to a different stop—the distinction being that he now carries two smartphones as well. These days, the Pattison empire extends past the borders of British Columbia and Alberta, which helps explain his fleet of three private jets. These are clearly a source of pride and hint at a fascination with transportation, one of the few things that seems to interest him beyond translating enterprise into money. Pattison’s dad had been in the car business, and Jimmy got his own start selling cars before acquiring his own dealership at 32. He now has almost two dozen of those, selling 15 makes, and recently picked up the B.C. distributorship for Peterbilt trucks, in addition to those John Deere dealers in Saskatchewan. Then there’s his 150-foot yacht, the Nova Spirit, which he can see at its mooring from his office, high up in Vancouver’s Shaw Tower. Pattison moved his headquarters here more than a decade ago, as soon as it became clear the new skyscraper would ruin the view of mountains and harbour from his old digs across the street. Pattison is often referred to as Canada’s Warren Buffett, and the comparison has merit, especially in his focus on long-term value creation and his avoidance of industries that he claims not to understand, like technology. But there are some distinctions. His empire is private, for one, so he doesn’t answer (or have any fiduciary duty) to anyone but himself. Pattison’s a hands-on operator rather than an investor and, unlike Buffett, has a taste for at least some of the trappings of success. The Peter Gzowski quote that appeared on the jacket of his 1986 autobiography, Jimmy, remains as true as ever: “Part altruist, part egoist, partly private, part show-off.” READ: Could Overwaitea be up for grabs next? The Jim Pattison Group remains an old-fashioned-seeming conglomerate organized into eight divisions: advertising and media; automotive and agricultural equipment; entertainment; food and beverage; forest products and port services; packaging; periodical distribution and marketing; and signs. Each competes within its sector to be a market leader, whether in B.C. or continent wide. He has limited exposure outside North America, but he did recently buy U.K.-based Guinness World Records, and his companies buy and sell billions of dollars in goods from and to countries in Asia. If there is one overriding characteristic Pattison has worked to see embedded in the company, he allows, it is a focus on customer satisfaction. Beyond that, the $8.4-billion empire is pretty much the inevitable result of showing up for work in the morning. Or at least that’s what his responses to my questions imply. On his position in a rapidly consolidating auto retail industry, for example: “We’ve been in it a long time—car dealers for 54 years,” he says. “The manufacturers, they’re the boss. They have targets, and our job is to do our portion.” On the shrewd decision to grab a chunk of B.C.’s forest industry while it was scraping bottom a little over a decade ago: “Anything that’s a commodity, it’s going to go up and it’s going to go down. We got involved with Slocan , and at that time, it had gone through some hard times and the stock was quite low. We started to accumulate some Slocan stock and then some Canfor stock.” (Canfor later acquired Slocan.) READ: State of the Canadian grocery industry Of the recent move to partner in the construction of a 54-storey office tower in downtown Vancouver, after decades of avoiding real estate development, he says, “We just sort of backed into it. We’re not real estate people. That came from our Toyota dealership. The opportunity came up to develop the whole block there.” (Temporarily situated elsewhere, the dealership will move back to its old address at the tower’s base.) Pattison’s “conservative” estimate of the number of deals he looks at every year runs between 300 and 400. “Some are not very big. They’re opportunities where we can make our minds up pretty quick,” he says. “We have a team of about three people who look at these things. We’ll buy eight or 10 a year, and maybe they’re just extensions.” He’s as wary as ever of relying on the public markets for money. A few years ago, he took subsidiary Sun-Rype Products private. “Being a private company has advantages. You don’t have to tell anybody your business, including your competition. Your access to capital is not nearly as good, but that hasn’t been an issue for years.” Still, the very size and complexity of the Jim Pattison Group has forced it to develop a management and reporting structure adept at encouraging divisional initiative while still providing adequate oversight. A system of quarterly meetings sees every division report on what it’s doing, with metrics that allow comparisons across the company. “If you owe the bank enough money, you decide what you have to do to pay your bills. It was trial and error. We’re car dealers, and then as we struck out into new things, they didn’t manage themselves. So we evolved a process that worked for us,” Pattison explains. READ: Sale of Sobeys’ stores gives two grocers a chance to spread out And so on and so on: the little guy from Luseland plodding from one billion dollars to the next. In the company described by Pattison, the next stage, the one in which he’s no longer there, will present few challenges. But then there’s reality. In fact, says former Jim Pattison Group managing director and vice-chair Nick Geer, “Jimmy is the glue” holding together what may be the most fragmented conglomerate in the country. He’s not just glue but some sort of rare epoxy with near-magical capabilities. “He has more business sense in his little finger than most of us have in our entire bodies,” says Geer. Geer, who left the Pattison Group in 1999 after almost two decades as one of the top executives in its tiny head office (still just 22 people), paints a picture of a company that owes a huge share of its success to an autocratic owner with a very particular set of attributes. First, Geer says, “he’s very good at reading and understanding people.” This is all the more significant since Pattison is essentially an introvert who doesn’t socialize with his employees and, says Geer, “would be uncomfortable at a dinner party.” Second, “he’s a great buyer,” Geer says. When examining an acquisition, “he’s very patient; he never overpays.” Third, except for a couple of recent forays into the commodity business, Pattison has concentrated almost exclusively on businesses that are cash-flow oriented and management sensitive. “And the management style we had was well suited to most of them,” Geer says. Pattison gives his divisions a lot of leeway to do what they like as long as they meet targets, believing that his role extends, explicitly at least, only to the hiring and firing of the president. Still, says Geer, every Monday morning Pattison and a small head-office team pore through the receipts and expenditures of every company, looking for trends and anomalies. “Sometimes,” he says, “we might call for an explanation.” Finally, Pattison has been effective at retaining talent. That’s impressive, since no equity carrots are dangled and he is a hard taskmaster. “Very hard,” emphasizes Geer. “He pushed hard, and if you broke, you didn’t belong. But once proven, you were allowed to make mistakes.” It would be one thing if the ethos described by Geer were confined to head office, but in fact, it has percolated throughout the company, says longtime West Coast adman Alvin Wasserman of Wasserman + Partners. “There is a rigour,” he says of the dozens of Pattison managers and executives he has dealt with. “They’re disciplined and accountable. And they are very results focused.” Wasserman attributes some of this to smart hiring and culture, but also to the knowledge that Pattison is looking at the books and asking questions. “He’s not just overlooking,” he says. “He’s into the critical details. He’s got a way of finding that detail.” READ: New Urban Fare Express store is for foodies So Jimmy’s shadow is seen everywhere, from fish-canning lines to the parts department at the John Deere dealer. But what happens to the Pattison Group when Jimmy’s no longer calling the shots? No one can do more than guess, says University of Toronto management professor Richard Powers. Still, there are two likely scenarios. “The company could become part of an estate and sold off,” whether intact or piece by piece, he says. “The pieces might be worth more than the whole,” Powers suggests; it’s possible that some or all could ultimately be reconfigured as a public company. Alternatively, the beneficiaries could retain professional management and continue to run the company more or less as is, perhaps in the form of a charitable trust. In that scenario, however, it’s hard to see whence its current appetite for growth and risk will come. Its organizational behaviour would almost certainly change. One advantage the Pattison Group may have over a lot of companies where succession has become a distraction is Jimmy’s aversion to nepotism. Only one of his three children, Jim Jr., has ever had any involvement in the company. He only recently rose to the top job at Ripley Entertainment, flagship of the entertainment division, while nearing a conventional retirement age himself. Pattison Sr.’s past comments about the need for children to earn their own way have led some observers to conclude he does not intend to leave more than a modest inheritance to his offspring. Immediate continuity does not appear to be a critical problem. Three longtime executives sit on an advisory board that also includes figures such as Blake Nordstrom, president of Nordstrom Inc., and William Fatt, CEO of Fairmont Raffles Hotels. The most senior of the three is Michael J. Korenberg, deputy chairman and managing director of the Pattison Group. The second is Jim Pattison Jr. The third and, for Pattison’s captain-of-industry peers, most surprising prospective successor on the operational level is group president Glen Clark, whom Pattison hired in 2001 after an economically stormy and scandal-plagued stint as NDP premier of B.C. Still, these three are the names that come up most often when Kremlinologists speculate about who might take charge. They’re sometimes joined by managing director of corporate development Dave Cobb, a relative newcomer who arrived in 2011 following a run as deputy CEO of the Vancouver Organizing Committee for the 2010 Olympics. Pattison himself has never commented on succession beyond confirming that there is a plan. “When I finally decided in the late ’70s that we were going to survive, I put a succession plan in then, and I update it every year,” he says. “If I don’t get home tonight, everything is set to go.” Judging from his current form, that seems unlikely to occur any time soon. Then again, anything can happen when you’re sole owner of a multibillion-dollar company, as illustrated by the Saskatchewan road trip. Jimmy and Mary had yet to complete the great circle when business realities intervened, and Pattison had to jet off to Winnipeg and then Regina to announce the construction of new supermarkets. Maybe some of those John Deere dealers are breathing a little easier. But there’s always next summer. This article first appeared on CanadianBusiness.com

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