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.
Mr. Pattison has no technology companies in his stable, although he insists that each of his businesses uses advanced technology in pursuit of higher returns. The Jim Pattison Group remains a collection of solid, Old Economy businesses with an owner in the ninth decade of his life. And so the question of succession is always the elephant in the room, and Mr. Pattison acknowledges its presence: "I'm 84, and 84 is not like 24."
So is Mr. Clark the succession solution? "He's probably going to outlive me anyway," Mr. Clark quips, while Mr. Pattison issues his standard reply on such matters: "We don't discuss that."
That doesn't stop speculation among Pattison-watchers that Mr. Clark may be veering toward a showdown with another of the group's managing directors, Dave Cobb, who joined the team about a year ago, having briefly run BC Hydro, and before that, served as deputy CEO for the Vancouver Winter Games and in a senior role for the Vancouver Canucks hockey team.
But Mr. Cobb, who is charged with corporate development duties, is still early in his apprenticeship. "He has been here less than a year, and this is a complex organization and it takes time," Mr. Pattison says. "Glen has gone through all these divisions and learned a lot about the business."
Indeed, Mr. Clark started out with responsibility for electrical signs, added magazines, then car leasing and the fishing business. Then Mr. Pattison gave him the Ripley's Believe It or Not and the Guinness World Records entertainment groups, and recently the food retail business. Mr. Clark is thus taking more and more responsiblity for the operating businesses and, in the Pattison Group, that is valued. "We are not financial people – we are operators," Mr. Pattison says.
But who becomes CEO is probably less important than who will own the company when Mr. Pattison passes from the scene. Mr. Pattison refuses to say whether he has set up an estate freeze to transfer ultimate ownership to his family.
He is adamant that it is not a family company, and his son and two daughters will not inherit any cozy entitlement. Yet Mr. Pattison is proud that son Jim Jr,. who heads the Ripleys operation out of Orlando, got the job not through nepotism, but because he was recommended by the retiring head of the unit. Jim Jr., now 60, reports to Mr. Clark.
Not that succession is an immediate issue. Mr. Pattison looks good, and looks after himself better than ever. For lunch, he dines on his executive chef's repast of chicken wrapped in prosciutto and sage, accompanied with rice. There is a hearty vegetable soup for a starter and fresh berries for dessert, and he rejects coffee for plain water.
When originally approached about a lunch interview, Mr. Pattison said he doesn't go out for lunch – not that he needs to, with such a sumptuous table prepared in the office. He is office-bound, he says, because of the demands of running a global company which must bridge time zones – with Asia on one side of the day and Europe on the other. When he isn't in the office, Mr. Pattison is in his corporate jet, visting his far-flung units. "If you live in Vancouver, most of the action is in the eastern end of North America," Mr. Clark observes. "It's the price you pay for living here."
Another price is the unconventional B.C. politics that swings wildly between two brands of populism – red-meat conservatism and tree-hugging social democracy. Mr. Pattison navigates cheerfully down the middle, a conservative with a weakness for socialist firebrands. The halls outside the boardroom are lined with photos that reflect his catholic tastes in politician friends – hell-raising former New Democractic Party premier Dave Barrett, conservative icon Margaret Thatcher, both George Bushes – and everywhere you look, this small, smiling billionaire.
Current polls suggest there will be a new NDP government in May, supplanting the star-crossed Liberals. Asked whether he worries about the future, Mr. Pattison insists: "Nobody can screw up British Columbia."
Mr. Pattison has loyally stuck to Vancouver, when he might have paid less tax and contended with fewer regulations by moving 230 kilometres south to Seattle. He once considered the move because of the broader U.S. opportunities, but Mr. Pattison was an only child and, at the time, his elderly mother was living in Vancouver. It was easier to hop on his jet than deal with moving away from home.
Decades later, the Pattison Group remains the heart and soul of the B.C. private sector, employing about 16,000 people in the province – and a total of 22,000 in Canada. But can a new recruit feel confident about still having a job in, say, 25 years, given the age of the owner and the unknown plans for continuity?
Mr. Pattison's response is basically: Trust me. There is a plan in place that will maintain the companies into the future, he vows. He just won't say what it is. "This company doesn't depend on any one individual, including me," he insists. It seems rude to disagree with a legend, but an uncomfortable truth hangs heavily over the lunch – that Jimmy Pattison is simply irreplaceable.
THE PATTISON EMPIRE
Ripley Entertainment, the world's largest chain of family attractions.
Guinness World Records, Louis Tussaud, and Great Wolf Lodge in Niagara Falls.
Overwaitea supermarket group, with120 locations in B.C. and Alberta. Includes Save-On Foods, PriceSmart Foods, Cooper's Foods, Urban Fare and Bulkley Valley Wholesale.
Canadian Fishing Co. (Canfisco), which operates B.C.'s largest fleet of fishing vessels. Processing facilities include Delta Pacific, the largest fresh, frozen and value-added seafood plant in B.C.
Ocean Brands, the second-largest canned seafood brand in Canada.
SunRype Products, one of the biggest apple processors in North America.
The sixth-largest group of radio stations in Canada.
The sign group, Canada's largest out-of-home advertising company, which has almost 50-per-cent market share.
News Group, North America's largest wholesaler of books and magazines.
British Columbia's No. 1 car retailer, with 11 brands at 19 locations.
The largest Western-based fleet management and vehicle leasing company.
Westshore Terminals in Delta, B.C., the busiest coal export facility in North America.
Owns 39 per cent of Canfor, one of Canada's largest lumber companies.
Born Oct. 1, 1928 in Saskatoon (home was in nearby Luseland, Sask.); grew up in downtown Vancouver
He and wife Mary (they met at bible camp in their early teens) have three children, Jim Jr., Cynthia and Mary Ann. Jim Jr. is president of Ripley Entertainment, part of the Pattison Group; daughters are not in the business
Pattison Group, with annual revenues of close to $8-billion, is the third largest private company in Canada
Owns Frank Sinatra's former compound in Palm Springs, Calif.
Has weakness for 100-foot-plus yachts, often with designs by assistant Maureen Chant
In 1985, paid more than $2.2-million for the Rolls Royce Phantom V once owned by John Lennon. It now sits in the Royal British Columbia Museum in Victoria
Company has progressed through a succession of corporate planes, the latest a Dassault Falcon 900EX.
When he started in the business, his mother could not afford to give him money but instead handed him a poem by James Russell Lowell:
Life is a sheet of paper white
Whereon each one of us may write
His word or two, and then comes night.
Greatly begin! though thou hast time
But for a line, be that sublime.
Not failure, but low aim is crime.
Jimmy the developer
He is applying for rezoning to build a large development on Vancouver's Burrard Street, near the Burrard Bridge, on site of an existing Pattison Toyota dealership
It is slated to be a 13-storey office building, with two high-rise condo buildings, and a state-of-the-art dealership, with three floors of showroom and four floors underground for service and customer care.
IN HIS OWN WORDS
I can't wait to get up in the morning.
Step by step
[In business], it's all the little things that give you the final results.
We tend to buy family companies that tie in with what we are already doing. … Once in a while, we try something different but most of the time it is something we are in, or we have some knowledge of.
The big goal
"Customer satisfaction is our objective – to exceed the expectations of our customers."
On the Northern Gateway pipeline
"I do not think it is going to go. I don't think it is going to happen if they go to Kitimat."
Health tips at 84
"I met this heart surgeon at a party in California and he was telling me what he was doing. He was sold on eating well and I tried to listen. If you drink wine, drink red wine and from high-altitude [grapes]. He is big on not taking sugar, or not eating things like potatoes, rice, and pasta."
The company's future
"In every decision we make, we are looking for the next 25 years and we are set up to last a lot longer than that.
We're just getting started and we just built ourselves a base. We're looking for opportunities to grow; if we don't screw up, we will do well."
Then and now
"My objective when I went on Cambie Street [with a car dealership in 1961] was to make $25,000 in the company before tax. Twenty-five thousand was a big deal. That first year, we made $29,000. [Last year the company grossed between $7-billion and $8-billion.]"