At age 82, legendary entrepreneur and philanthropist Joseph Segal still puts in a full work week at his Vancouver holding company, Kingswood Capital Corp.
From an Alberta boyhood, he amassed retail and manufacturing interests which, at various times, encompassed the Bay, Zellers, Collegiate Sports, fashion firm Mr. Jax, and, most recently, the Sterling shoe store chain. The veteran turnaround artist, who was recently inducted into both the B.C. and Canadian business halls of fame, shares a few thoughts on his life and career.
Chip Wilson, who founded the hip apparel chain Lululemon, credits you with helping him.
I answer his questions. There is a real value to experience. I think experience is better than a college degree. If you've been there and someone else hasn't, they want to know what it's like and you tell them.
But what can a guy who sells yoga gear learn from a veteran department store retailer?
The fundamentals are the same. Retailing is retailing and manufacturing is manufacturing. It's common sense, logic.
In any retail business, timing is of the essence. This gentleman started Lululemon and he hit the right market at the right time. I'm not really responsible for his success, but sometimes if you have a question, you can get the right answer.
Have you helped others?
I probably spend 20 hours of the month mentoring.
They are often university students, who get out of school, they have a parchment and they don't know what to do with it.
I had a lot of advantages because I never had a business degree. I had no preconceived notions about what should be or shouldn't be, about what's right and what's wrong.
Yet you're a big benefactor of the business school at Simon Fraser University?
Whatever was valid 20 to 30 years ago, the criteria are different now. You should have a business degree now, but what you do with it is everything.
Imagine you come out of school with a degree and you don't know what to do with it. Nine times out of 10, you get locked in as an executive with a big organization. Once you're there, you're in a comfortable cocoon and you want to move up the ladder.
But you forget that's where you're going to be the rest of your life. You're never going to own your own firm, and there is nothing like controlling your own destiny.
Why didn't you follow that corporate route?
I never wanted a job and no one would ever hire me.
What was your first business?
I got out of the army in 1945 with no capital and no experience. I started buying war surplus, but the only thing I could buy was what no one else wanted. When you buy what no one else wants, you need a little ingenuity.
So I bought 2,000 gallons of olive drab khaki paint in five-gallon drums. What the hell do you do with 2,000 gallons of khaki paint? Who wants to paint their house olive drab?
I rented a panel truck in Vancouver, I loaded up in the morning, and I'd head out to Ladner, B.C. I'd have every barn from Vancouver to Ladner painted khaki. The next day I'd leave Vancouver and go to Chilliwack. I'd sell the paint to farmers who hadn't painted their barns for years and they loved it.
Later, you owned the Zellers department stores.
We took Zellers from $350-million in revenue to $800-million without opening a new store. All we did was lift the Saran Wrap and let the company breathe.
With a major company, the first thought when business goes bad is to cut staff. The next thing you do is cut inventory. Then the third thing you do is cut half the lights out to save overhead. The fourth thing you do is put the key in the door and lock up. So find out what the problem is, don't address the symptoms.
After you sold Zellers to Hudson Bay Co. in the late 1970s, you were a major Bay shareholder for a while. What happened to the Bay after you sold out?
The industry shifted, and you have to change with the industry.
It was the same with every department store chain. They didn't recognize how to service a changing consumer.
What is your advice to the Bay's new owner, Jerry Zucker?
I already notice a difference when I walk through the stores -- better attention to presentation and a better balance in inventory. Not more inventory but better inventory.
What do you mean?
More the flavour of the month. If you're a retailer, you have to have the right merchandise at the right time at the right price in the right place.
If you miss any one of those ingredients, it's tough.
But the Bay is a venerable company and I think it will come back to the glory days. [Mr. Zucker]bought it because he recognized an opportunity. If I were 10 years younger, I would have bought it.
How did you get into real estate?
I used to take my excess retail profits, and I would go and buy a little piece of real estate and one thing led to another. There is nothing like driving by and saying, "Well, I built all that."
What was your worst decision?
In my office I have a framed $2 bill, which is signed by the individual who gave it to me. Whenever I'm not sure about a decision, I look at that $2 bill, and I remind myself you have to do your homework. That bill is all I have from a company that I bought for $10-million and wound up giving away.
Your best decision?
Back in 1988, I was having a martini before dinner and reading the paper, when I saw an article related to [property developer]Olympia &York. They had a B.C. real estate subsidiary, Block Brothers, which was a flyspeck on their balance sheet. I picked up the phone and said, "Maybe you want to get rid of it." I paid $150-million for it, and it was a good deal, because the market changed in 1990. I wasn't a genius but I was in the right place at the right time.
Is that how you do it -- by reading the newspaper?
I'll go on a trip for two to three weeks and every newspaper that comes in is saved. When I get home, I will go through all the copies of The Globe, the National Post, The Wall Street Journal, and the Vancouver papers, and I don't know how many other periodicals.
It may take me a month, but they're my bible. They tell me what's happening in the world. I'll read an article and it triggers a thought and it gives me a comparison. Maybe I read that someone else has thought of something. There is nothing wrong with emulating a winner.
Do you have any regrets?
I wouldn't change a thing except that I would have maybe taken a little more risk. Maybe instead of worrying about borrowing money, I would have leveraged a little more, and I would have made a lot more money. And I'm not poor.
Joseph Segal
Title: President, Kingswood Capital Corp., Vancouver
Born: 1925, Vegreville, Alta.
Education: Dropped out of high school when his father died.
Career highlights:
2 ½ years with the Calgary Highlanders, serving overseas in Second World War.
1946: Goes into war surplus business in Vancouver.
1968: Goes public with his department store chain, Fields Stores.
1976: Acquires Zellers.
1979: Zellers purchased by Hudson Bay Co. Mr. Segal becomes major Bay shareholder. Later sells his stake to Thomson family.
Also 1979: Forms Kingswood Capital as venture capital provider, real estate developer and turnaround firm.
2005: Converts his Sterling Shoes Corp. into income trust.