Company Of Adventures - Merchant Prince Part 34

"David gets feelings that I never get from pictures," admits his father, Ken. "He never misses the technical aspect ofart. He sees when something is well executed and when its not so well executed. He talks about the soul, the true message of a painting and can sort of read what the artist had in his mind when he did it. I'm not that good. I can't figure those things out. He gets signals that I don't even understand. I just get an instant message that's probably much more shallow than David's." The relations.h.i.+p between the two men is close but not cloying, with the senior Thomson occasionally wondering if his son is tuned in to worldly business realities. "Our private discussions evoke mixed emotions, but once agreed, we tackle issues with a single-minded tenacity," David insists. "I love him deeply, would do anything for him, and I am not alone. Many of my cohorts would defend him to the death." Of his son, Ken Thomson says, "He's a fine young man. The same sensitivity that he relates to his paintings, he relates to people and business. It worries him if somebody isn't being treated right and all that sort of stuff. He relates to quality. When he's involved in something he wants it to be the best, but of course we can't always have the very best. In his position, he could have just taken what's coming and enjoyed it, but that would have been more shallow than his thinking. It wouldn't have been as satisfying."

DAVID THOMSON WORKS on the eighteenth floor of the Thomson Building across the street from Toronto City Hall. A visitor entering the private headquarters of his personal holding company, Lavis Incorporated (after his mother's maiden name), is struck by the sight of three incongruous objects: the large-scale model of a 1920s U.S. Post Office monoplane, painted every colour of the rainbow, that looks as if it had just landed out of a LAST LORD OF THE BAY 563.

Peanuts cartoon; an exquisite, life-sized thirteenth-century French limestone figure that appears to be bending towards its owner in an att.i.tude of gentle benediction; and the dark green seat from a Second World War n.a.z.i Luftwaffe fighter. The office walls are covered with the striking canvases of Patrick Heron, a controversial contemporary British artist who specializes in jarring colour patterns.

David usually works gazing out the window opposite his desk on which are mounted several transparencies. -That one," he explains, "is a Constable, an oil sketch he Painted on his honeymoon in November 1816 of Weymouth in Dorset, along England's south coast. These two are by Cy Twombly, the most compelling of modern artists, who left the States in the 1950s and now lives in Rome. That small transparency is a marvellous limestone figure from about 1260 and represents the beginning of sculpture in the full round. One must travel back-wards to pagan times before one encounters full relief sculpture."

In the same mood he produces out of his desk a coin from the Dark Ages, a Merovingian gold Tremissis struck in Lyons about 675 A.D., modelled after the Roman currency of the Emperor Justinian: "Hundreds of nioneyers minted crude coinage in the manner of Imperial Rome, inscribing their names and cities on the reverse legend. The effigies are extraordinary in theirvivid line and spontaneous gesture; they evoke a most wonderful sense of expression and power. For me, thev are the beginnings of the small entrepreneur in the history of coinage-they were created amidst the most barbaric circ.u.mstances by a people in constant motion and are amongst the few objects that remain from those distant days."

Thomson's most valuable acquisition was J.M.W Turner's magnificent Seascape, Folkestone, which Lord Clark, the former director of the National Gallery (who once owned the painting), described as "the best picture 564 FAREWELL TO GLORY.

in the world." David bought it at auction in 1984 for $14.6 million, outbidding the National Gallery of Scotland; five years later it was officially valued at $50 million. But his real obsession is with John Constable, the miller's son who with Turner dominated English landscape painting in the nineteenth century. Thomson's first purchase, at nineteen, was a page out of the artist's 1835 Artindel sketchbook, and his current collection of twenty major works and eighty-six of his drawings, as well as oil sketches, watercolours and letters, ranks as the world's finest private representation of Constable's art.

In 1991 Thomson published a lavishly printed and ill.u.s.trated 328-page study, Constable and his Drawings (with text by Ian Fleming-Williams, Britain's leading Constable expert), which has been highly praised by Eng- lish art critics. "In sharp contrast to formal art history monographs," he notes, "one can read this book without having studied fifteen previous works. This is about pure observation, not terribly different to the art itself Constable's sensibility has had a strong influence on my personal philosophy, which I carry forward in all walks of life, including the business. So few people allow themselves to openly see and question scenes and events as he did. All too often subjects are viewed from a narrow perspective, with strong conclusions drawn in advance. Being possessed by imagination, curiosity and such dreamlike qualities doesn't mean one is incapable of pragmatism and tough decision-making. Whenever you lose that sense of idealism, you lose your reason for being. Constable for me has always represented the search for truth."

THAT SEARCH HAS TAKEN THOMSON into the soggy pastures of existentialism, at least in the sense that he believes men and women are diminished by not meeting the challenges they set for themselves. Intensely LAST LORD OF THE BAY 565.

attracted by war and danger, because those circ.u.mstances force people to harness the peak of their physical and emotional energies, he owns a large library doc.u.menting first-hand experiences of aerial combat and the uses of camouflage ("creating patterns and colour combinations that transformed each aircraft into a work of art"). He often imagines himself in battle. ("I become excited at the thought of measuring myself in varied situations, alongside IA"ellington in India or being in a fighter, attacking a formation of bombers and being vastly outnumbered. It's an interesting way to test yourself because you set your own limits.") Among his favourite doc.u.ments is one of the last letters written by Antarctic explorer Robert Falcon Scott, found beside his frozen body in 1912, that Thomson regularly rereads as an example of an undaunted spirit facing death. "The existential idea of lifes journey is very important," he contends. "It's all too easy to become cynical and to forget that we are all children at heart, that when you leave those youthful dreams behind you leave a great part of your being forever, you abandon your sense of wonder and astonishment, the idea that vou can be spiritually moved by something or someone.'; That sense of wonder is best caught in his house, an architect's jewel on a dead-end street in Rosedale where he finds sanctuary. He lives there with his wife, a preRaphaelite beauty named Mary Lou La Prairie, and their daughter, Thyra Nicole. He met Mary Lou in 1988 at Simpsons where she worked as a fas.h.i.+on buyer for young contemporary women's wear. ("Our love for one another was instantaneous. It was a fairy-tale romance. It has changed my life.") David drives a 1984 Audi and owns a pied-~-tei-re in New York and a house in the Highbury district of London. His main interest is the collection at his Toronto house, which is less a home than an art gallery with a 566 FAREWELL TO GLORY.

kitchen and some bedrooms attached. Every wall is crammed with paintings.

The total effect is less than the sum of its parts because individual pictures have so little room to breathe; the eye cannot feast on any one canvas without being distracted by those on either side of it. Edvard Munch, Sir Stanley Spencer, Ilya Chasnik, Piet Mondrian, Eugene Jansson, Pica.s.so, Ivan Kluin, Roger Hilton, Cy Twombly, Joseph Beuys, Ferdinand Hodier, Ernst Ludwig Kirchner, Mark Rothko, Paul Klee and a dozen other artists of equal international renown are represented. Strangely, except for a small drybrush by David Milne, there are no Canadian paintings. (Not a Krieghoff in sight.) "I look forward to the day," he says, "when I can hang a room of empty frames. What an extraordinary experience that would be. Nothing can be more perfect than a frame and one's perception of balance and s.p.a.ce, within and without its running pattern. This is sculpture. Immediately one thinks of the cla.s.sic argument about what one chooses to leave out as opposed to what one puts back in. As with business, it is what we end up not expending that returns far more in the long run, well beyond any immediate cost savings or profits."

And then there are his art objects: a rare book on coloured fifteenth-century woodcuts, among the earliest printed and hand-coloured images in the history of art; facsimiles of the original texts of T.S.

Eliot's The Waste Land and George Orwell's 1984, showing the authors'

corrections in ink; a study of fences from the Middle Ages ("one of the finest ways of dating objects and understanding the social order of those times"); an animation cell from Dr Seuss's The Grinch Who Stole Christmas; an Ethiopian book of holy scriptures in hippopotamus-hide binding from the year 1500; an original Schulz cartoon of Charlie Brown; a small woodcut from Lower Swabia, dated 1420; an eighteenth-century African bronze from LAST LORD OF THE BAY 567.

Benin; and a magnificent depiction in wood of the Crucifixion, mounted on its original cross, which was the focal point of an unidentified church in South Germany during the last quarter of the twelfth century.

David and a visitor gaze at this icon. "The agony of Christ is p.r.o.nounced with the hips slightly tilted," he explains. "The profile of Jesus' head is quite spectacular. In this piece, one confronts the beginnings of Gothic carving and the tremendous expressionism of the northern world . . ."

"Look at those nails," the ovcrwhelmed visitor offers helpfully, "how honest and raw they are . . ."

"Well, no, actually I put them there myself; they're what the cross is hanging on."

The gallery is constantly being expanded but its paintings will probably never be exhibited. "One does not form an art collection to then have a representative of Architectural Digest come by and write an article that invades one's privacy," Thomson insists. He maintains an intelligence network in New York and London to hunt down the works he seeks. "The art world has taught me harsh lessons on human nature," he confesses. "Money does not open every door. A real collector will rarely sell a work unless he can replace it with something even greater that has more personal meaning. Sometimes the issue can only be resolved by a trade or an exchange. I rely on a few people to update me and avidly peruse books and catalogues. I'll take three or four volumes with me to bed every night.

It's no different from my grandfather reading all those spy and detective novels."

Almost hidden from view in the bas.e.m.e.nt of the Rosedale house are a few exquisitely fine lead-pencil drawings-of a fish pond, an oak tree, water lilies, wrecked cars. These are some of David Thomson's own. He has been drawing to express his innermost thoughts since childhood. One British critic who saw them while 568 FAREWELL TO GLORY.

on a visit noted they were "very good indeed, highly detailed, well observed," but they will never be shown. "I sometimes say to Mary Lou, 'I must draw a tree now,' and go away into my world for several hours. I have to. I am absolutely compelled to follow my feelings, or I forfeit the right to live."

Thomson makes little effort to separate his pa.s.sion for art from his devotion to business. In his mind, these twin strands are forever intertwined: "I take art so seriously because it's one of the few pursuits in which I can totally unravel my soul. For me, the act of creation comes through in a better appreciation of business. . . . I measure great achievements in information publis.h.i.+ng [the Thomson newspapers] in the same way as I view a compelling work of art." lie dismisses the criticism that Thomson newspapers 1111 the s.p.a.ces between their ads with the cheapest boiler-plate copy available as being out of date. Instead, he praises employees such as Peter Kapyrka, publisher of the Barrie Examiner, for furthering his company's organic growth by adding a weekly real-estate supplement.

There is, according to the youthful inheritor, almost no aspect of art that can't be related to some section of the Thomson Organization's operational code. "If you look at Limoges and Mosan, two of the great French workshops producing art in the twelfth century, you might think, 'What the h.e.l.l does that have to do with business?"' he says. "Limoges in central France made fantastic reliquaries and chalices for churches and cathedrals with very few variables. But the Mosan craftsmen were different. They worked the market between Li~ge and Cologne. Their representatives sat down directly with the local bishop and asked what he wanted to see in the holy shrine.

They were, in effect, forming the first customer focus groups and producing castings that were far superior to the Limoges enamels. You can't do any- LAST LORD OF THE BAY 569.

thing well in publis.h.i.+ng without a highly developed sense of audience."

David's spiritual bible is a remarkable book-length essay ent.i.tled Happiness: An Exploration of the Art of Sleeping, Eating, Complaining, Postponing, Sympathising, and, Above All, Being Free, by Theodore Zeldin, an Oxford don who portrays Everyman's journey into paradise, comparing what he encounters with what he expected to find. "The book," Thomson summarizes, "is about having the courage to dream in a highly structured society and the corporate world. It's about having faith in one's intuition, about preserving one's childhood vision and curiosity, about the fact that dissent requires great moral courage, and that failure is as important as success." He is mesmerized by the fact that in his position and state of development he is free to make mistakes and believes that this may be the greatest privilege bestowed on him by wealth. It's the errors in judgment that really accelerate his learning curve; he takes the correct decisions for granted.

That learning curve received its most valuable spurt during the decade he spent with the Hudson's Bay Company.

DAVID 'rijOMSON'S DEDICATION to the HBC seems incompatible with his artistic temperament and search for mental stimuli. Yet he spent ten years in the service of the Company-between the ages of twenty-four and thirty-four, his most productive business apprentices.h.i.+p-as a full-time retailer, right down to a term of selling socks at The Bay's downtown Toronto department store.

In the summer of 1982, when Ken Thomson took his family on a second northern journey to view the HBCs Arctic kingdom, their guide was once again the 570 FAREWELL TO GLORY.

Company's George Whitman. The party was encamped on the Belcher Islands in the middle of Hudson Bay when Whitman bluntl~ asked the elder Thomson why he had bought the Hudson's Bay Company. When Ken explained that he had a sense of Canadian history and he did not want to see the Company swapped around, sold off, or allowed to disappear, Whitman turned to David and said, "It would really be nice to hope that someday you might become the Governor. How do you feet about that?" David, who was then looking for a place to light, allowed that he would indeed be interested but that he knew nothing about retailing. Sensing the young mans excitement, Whitman talked for hours about the Company's glorious history and its magical presence in the Canadian wilderness. He suggested to Ken that David not be parachuted into some senior position where he would be usurping the succession of staff climbing through the system but that a comprehensive training program be put together that would expose the young Thomson to the Company's inner workings, and vice versa.

"people were very careful about what they'd say to me and were told to be so, antic.i.p.ating that I would not stay long," David recalls. "But this didn't happen because I becarne enthralled with many areas of the Company's then disjointed business potential. I have always been fascinated by how one motivates people in a negative situation. My business focus was entirely retail, and to learn it well I allowed myself no distractions or meanderings. I committed myself to the cause of making the HBC a great Company again." He began in the main Toronto retail store, then spent a year commuting to Quebec, Saskatchewan, Alberta (where he once forgot his pyjamas in a motel at Medicine Hat) and British Columbia in addition to the fur divisions in New York and Montreal.

LAST LORD OF THE BAY 571.

Ken Thomson, David Thomson and George Kosich at the 1988 HBC annual meeting

Probably his most moving experience was the time he spent at a fur-trading post in Prince Albert. "The juxtaposition was dramatic," he recalls. "Onjuly 4, 1980, 1 bid successfully for a Munch woodblock; the following week I was in Prince Albert, and I remember being taken to the post's backyard where ten bear claws were positioned on the cement floor, with fresh bloodstains and tissue intact. One fellow proceeded to demonstrate the various new traps and took me through the back room, where numerous s.h.i.+ny models were hanging. He hinged several in open positions and tossed a branch into the claw. I shall never forget the powerful crescendo of the folding pincers. For one of the first times I enjoyed a completely unfettered response to life, isolated from big cities and the diversions of money. We drove along dirt roads, watched sunsets, merchandised the store, went fis.h.i.+ng and talked of our childhoods. The experience was unforgettable and I developed a deep respect and empathy towards those real people."

572 FAREWELL TO GLORY.

That warm feeling described his reaction to the Company as a whole. During his travels, he kept a private journal, recording his thoughts-among them:

On storefixtures: Chrome is poor choice. For specialty mens store in Toronto, would buy old barns which farmers glad to get rid of and refurbish our departments completely in cedar.

On display: Spotlight the ring on a model's finger in a downtown window ... use all senses, including the aroma of good cooking.

On old stock: Things never die. One item from an unsuccessful line will become so popular, it becomes one itself.

On expansion: To build a new shopping centre or store is an a.n.a.lytical decision with no feelings. Yet selling decisions are all feelings.

On selling: Merchandising is the last frontier of the untrained intelligence.

On Zellers: Slop it up. Far too clean.

On Fred Eaton: Talk to any time. Get in touch. Ball is in my court.

In the course of his training, he spent twelve months with one of the HBCs most troubled units, Shop-Rite, which ran five dozen discount catalogue outlets, mostly in Southern Ontario, and was losing about $2 million a year. Pete Buckley, who then ran the division, recalls ihat David was an effective junior manager, particularly as a member of Shop-Rite's ball-hockey team, whiA challenged the company's warehous.e.m.e.n to a match. "I was the referee and it got pretty rowdy," he recalls. "As soon as the warehous.e.m.e.n saw David, I could hear them muttering, 'Get that sucker.' But he was the most compet.i.tive guy in there and just beat the h.e.l.l out of some of them." The admiration was mutual. "I have a lot of LAST LORD OF THE BAY 573.

respect for Buckley," Thomson says. "He told me on one occas] on, 'David, do you know how to better understand your consumer? I'll tell you. At one time I lived in an apartment building and at night, using binoculars, I would scan people's apartments, to see what goods they were using.' I said, 'You're a b.l.o.o.d.y genius! That's so simple!"'

David's next and most important step, in July 1983, was his appointinct.i.t as manager of the HBCs suburban Toronto Cloverdale store, which he ran for a year, raising its operating profit to 8.9 percent, among the chain's highest. He established a Grandmother's Boutique ("a fine opportunity to cater to all the empty-nesters in Cloverdale's trading area"), reduced inefficiencies and soon found other managers copying his methods. "For many, it made no sense that David Thomson would need to work, and I think it was a surprise because no one had ever seen me perform alone," he recalls. "That year's journey made me acutely aware of the pressures and discomforts some people felt from the mere thought of my presence." But he persisted, and the time at Cloverdale established his independent reputation among Bay executives. There followed a stint with Simpsons, where he became a.s.sistant to George Kosich, who, a year later, would be promoted to run both Simpsons and The Bay. They quickly formed a duo, cruising the HBC retailing empire's inner and outer limits, cutting costs, closing stores, laying off employees, recasting its merchandising philosophy. (What annoyed staffers most was that when Thomson and Kosich would arrive at a store, obviously preparing to wield the axe, they first spent a day walking around each department handing out jujubes.) "The sys- tem was at an impa.s.se," David remembers, "and its dismal financial results mirrored my feelings, as did many conversations and pieces of information that came my way. I had clandestine meetings under stairwells in 574 FAREWELL TO GLORY.

shopping malls and other places, as employees, torn between what they knew in their hearts was right and the security of their employment, confided to me about basic merchandising issues that were not being addressed. I felt the ground swell beneath me as I realized how pa.s.sionately these people cared about the Company."

Others were critical of his methods, accusing him of grilling underlings about their superiors' performance, then attacking those in charge on the basis of what he'd heard. They claimed that he could operate at only two speeds, full throttle or total indifference, and recalled an HBC management meeting where he grew bored, slumped at his desk, and finally started reading a book. "David used to phone from Liechtenstein on a Sunday night and say, 'Hey boss, can I get Monday off?"' complained Marvin Tiller, then in charge of the HBC"S Northern Stores, where the young Thomson put in some time.

Early in 1987, he had to decide whether to continue with retailing or switch to publis.h.i.+ng. He flew to London, took a long walk on Hampstead Heath, and opted for the presidency of Zellers. That meant moving to Montreal and taking on his first major executive a.s.signment. "David was only twenty-nine years old, an unknown quant.i.ty, his apparent qualifications confined to his shareholdings," recalls J.W "Bud" Bird, an HBC director at the time. "We made the appointment, knowing it was an innovative move that could have a lot of precarious circ.u.mstances." With one exception, the investment community was not impressed. "I don't think it's appropriate," an investment a.n.a.lyst charged anonymously in the Financial Times of Canada. "He should not be allowed such a position just because of his father's influence, to take over such a large chain without working his way to the top." The exception was Don Tigert, an a.n.a.lyst with Burns, Fry, who commented, "I was very LAST LORD OF THE BAY 575.

impressed with the guy. He said he was going to whack S80 million out of Zellers' expense structure and in just six months he did precisely that."

According to David, the franchise had to be brought back down to its pedestrian fundamentals, which had governed its earlier success, because its stores and merchandise were becoming too expensive and head office, in particular, needed some brutal tr.i.m.m.i.n.g. "In the initial week," he recalls, "I summoned the head-office staff and announced my decision to lay off 250 employees who, in fact, were standing in that room, I remember someone questioning me about having butchered the Simpson organization a couple of years earlier. I always appreciated blunt opinions, and this was no exception."

He had a brief but spectacular success at Zellers (he raised operating profit by 45 percent), although some attribute a good deal of the credit to the influence of his mentor, George Kosich, who was now president of the IJBC. It was followed by a frustrating term as president of Simpsons which, unlike Zellers, was no easy turnaround, and after a year he was discreetly promoted to part-time chairman and sixteeti months later resigned to pursue his other business interests. Although his relations with Kosich have cooled noticeably and some question his continuing interest in retailing, he remains a director of the HBC and attends its Executive Committee meetings. "I have asked my father on many occasions,"

savs he, "where the family might find a great franchise equal to the Hudsons Bay Company."

Most if not all Thonison employees who have come into contact with David respect him but eventually become overdosed on his intensity and his lingo. He told one dissatisfied British staff member that perhaps he should consider leaving the firm, that there were certain disadvantages and anxieties involved in working for someone like him. "But at the end of the day," he added, 576 FAREWELL TO GLORY.

i6you may say: 'You know, it's interesting working for David. Even if he's mad.' If that means I'm not normal, I'm perfectly happy with that. That's the type of dialogue I really enjoy because it not only gives me strength but allows so many wonderful initiatives to occur in the business."

DAVID THOMSON IS VOLATILE, as unpredictable as a hailstorm. He could become the leader of the new generation of Canada's Establishment, or he might seek permanent refuge in his art. He is just beginning his run, with each new experience providing the bounce that will determine his ultimate direction.

Not at all like the father he loves but very close to the grandfather he respects, he faces a future limited only by his ability to survive his own intensity. Perhaps he had an inkling of the fact that nothing could stop him except himself when he chose the quote to accompany his picture in the Upper Canada College 1975 graduation yearbook: "We are never so much the victims of another as we are the victims of ourselves."

Meanwhile, he goes on pontificating, turning dollars and flexing his expanding authority. "I wish," he says, "to prolong those inspired moments in life and see them continually manifested in all areas of endeavour....

My search is always to create new wealth."

Once a Thomson, always a Thomson.

EPILOGUE.

The Hudson's Bay Company is permanently woven into the marrow and the dreams of this country. Its geography became Canada, its history the new nation's dowry.

TWO DECADES INTO ITS FOURTH CENTURY of existence, the Hudson's Bay Company has seldom been spiritually weaker or economically stronger. When Ken Thomson decided to wash his hands of the fur trade and jettison its northern operations, the Company lost its soul. Yet by abandoning its founding territory and rejecting its past as the basis of its future, he inadvertently set the Company free.

For most of three hundred years the HBC's prevailing ethic could be summed up in one word: survival. Such a benign state of endurance was, of course, squarely within the Canadian experience, since the country prided itself on nothing so much as just being there. The resultant mindset was best caught by Margaret Atwood in her seminal work, Survival, and by HarryJ. Boyle, the Canadian broadcaster who rhapsodized about "the soulsharpening satisfaction that comes from being a survivor." While survivors are the winners in any game, standing by is not enough. The problem with survival is that it too often produces an over-respectftil, timorous mentality. Hypnotized by the extraordinary history of

578.

EPILOGUE 579.

the inst.i.tution they represented, the Bay men turned inward and became marginal to the country growing up around them-in it, but not of it.

Their obsessive concern with durability governed nearly every stage of the Company's evolution from a one-fort trading operation on Hudson Bay to its modern incarnation as a $5-billion merchandising conglomerate. Reading the Bay men's journals, one is struck by the strong sense of obligation they felt to those who had gone before or would come after; they behaved as if one wrong step might wipe out the HBCs history. They didn't seem to realize that history is not a disposable commodity, that the future cannot erase the past.

The Iludson's Bay Company is permanently woven into the marrow and the dreams of this country. Its geography became Canada, its history the new nation's dowry. More important, the Company's frontier presence sp.a.w.ned the country's founding ethic.

All those early forts and trading posts were really Company towns, demanding deference to authority from inhabitants inside their ramparts and deference to nature beyond them. That orderly att.i.tude -stressing collective survival instead of individual excellencebecame the country's prevailing ideology, and it still colours what Canadians do and especially don't do. That was very different from the American frontier, where authority was challenged rather than deferred to, and the hunt was on for "life, liberty and the pursuit of happiness" instead of "peace, order and good government." One expression of those dissimilar approaches was the treatment of aboriginals. The Americans conquered their frontier, sharpshooters against tomahawks, with first the mountain men slaughtering Indians for their furs, followed by the U.S. Cavalry, which fought sixty- nine Indian wars, often killing "Injuns" just to "watch lein spin."

580 EPILOGUE.