Jimmy Pattison has come to lunch with sex on his mind.
That’s celebrity sex, the kind dished out in salacious slices by supermarket gossip magazines, with headlines promising to disclose the carnal exploits of Jen, Brangelina and the Kardashians.
It’s not the fare normally associated with a God-fearing 84-year-old billionaire whose first job was as a trumpet player in youth gospel camps. But today, Mr. Pattison is the king of the checkout counters, with a distribution network that encompasses at least half the magazine and book racks in North American supermarkets and pharmacies.
Traditionally, this has been a very good business, but in the past couple of years, consumers’ once-torrid love affair with weekly gossip mags has cooled. “The celebrity-type news business is off,” Mr. Pattison observes solemnly, noting that economically hard-pressed U.S. shoppers are shying away from impulse purchases and increasingly scratching their itch for gossip on the Internet.
Yet, elsewhere in the supermarket, Mr. Pattison’s News Group is doing a red-hot business feeding off the risqué reading habits of the modern woman (and not a few men), who are devouring Fifty Shades of Grey and other entries in the the sex-fantasy book trade.
The publishing business is clearly running very hot and very cold, and that makes it a microcosm of Mr. Pattison’s sprawling conglomerate. Whenever one part of his business is up, he says, “There is always something in the ditch.”
It is also a reminder of how much this private collection of unconnected companies – with almost $8-billion in annual sales from 460 locations – depends on the North American consumer. Sure, there is the occasional coal-shipping terminal and packaging plant thrown into the mix, and Mr. Pattison is trying to make inroads into Asia. But the core of the Jim Pattison Group is based on what North Americans read, eat (supermarkets, fruit snacks, Pacific salmon), drive (car dealerships and leasing), watch and listen to (outdoor signs, TV and radio outlets), and how they play (theme parks and resorts).
No one is closer to the whims, fantasies and economic challenges of ordinary North Americans than Jimmy Pattison, the ordinary titan whose wealth is estimated by Forbes magazine at $4.3-billion (U.S.), amounting to the fifth-largest fortune in Canada and 248th biggest in the world. All this for a compulsive striver who was born on the eve of the Great Depression in Saskatchewan, grew up poor in east-end Vancouver, and started out as the lowest of the low salesman in a downtown car lot.
So you pay attention when he says he can see a bit of an uptick in the long-suffering U.S. consumer market, while his Canadian businesses – which comprise over half his revenue – have been sturdily resilient. Or when he says that magazines, in their traditional form, are on the wane, but mass-market books are doing just fine. Or that lumber is coming back a bit – although, in manufacturing, he confides that one of his North American operations is feeling the heat from low-cost imports.
At lunch in his blond-wood boardroom overlooking Vancouver’s Burrard Inlet, the North Shore, and the jutting green edge of Stanley Park, he describes his business as a “homespun conglomerate” and indeed, it exudes the folksy character of a country general store – but one with 34,000 employees. There is the amiable but sharp-eyed shopkeeper, who keeps a retinue of long-time loyal staff – administrative assistant Maureen Chant has been with him for 50 years – as well as the occasional wayward kid.
Twelve years ago, he took a chance on Glen Clark, the former B.C. premier and socialist stalwart who had left his post amid allegations of corruption and was then hired by Mr. Pattison. Mr. Clark was eventually acquitted of charges of breach of trust and accepting a benefit, but he found a long-term home in the Pattison Group and is now one of the owner’s most trusted and powerful executives.
Mr. Pattison still displays remarkable mastery over his companies for someone in his eighties, but he clearly relies on his tight team of managing directors to drill down into their businesses and deliver the numbers. Mr. Clark, 55, is a big part of that team, having assumed a first-among-equals role as Pattison Group president, while Mr. Pattison remains chief executive officer. A lot – although not all – of the Pattison operating businesses are now under Mr. Clark’s purview.
Indeed, Mr. Clark briefly joins the lunch meeting to add some perspective on book distribution – it is he who sheds light on the phenomenon of Fifty Shades of Grey , which in just one week last year accounted for half the books sold in Canada. The youth-oriented Hunger Games franchise has been a shot in the arm for the book trade, as well.
Mr. Clark points out that the declining celebrity magazine business is offset by the rise of “bookazines” – higher-priced magazine-format publications built around one-time events, such as the Royal Wedding, the release of the movie Lincoln, or various Rolling Stone magazine commemorations of rock idols such as Led Zepellin or John Lennon. And trade paperbacks, with their image of value and quality, are selling much better than the standard pocket novels.