Greg Hicks, Canadian Tire's new CEO, at the company's head office in Toronto, on Dec. 9, 2020.Fred Lum/The Globe and Mail
The announcement zinged across the news wires at 7 a.m., heralding one of those rare moments when corporate life reaches its zenith. Greg Hicks, president of Canadian Tire Retail, had been elevated to the role of chief executive officer of Canadian Tire Corp. (CTC-T), the giant, near-century-old institution that sells tires, of course, and gas and sporting goods and Paderno stockpots and Dyson vacuums, and pails and pails and pails of paint. Happy day, yes?
Seemingly so. The prior evening, Mr. Hicks had been reflecting on the life-changing event over a quiet dinner with chief financial officer Gregory Craig at STK in Toronto’s Yorkville (pronounced consonant by consonant, by the way, and not “Steak”). Sure, the guys at the next table had shared the thunderous news that the NBA had just suspended its season after a player tested positive for COVID-19, but Mr. Hicks wasn’t really hearing the pandemic drumbeat at home. “It didn’t feel as real on that night,” he reflects – “that night” being March 11. A near Canadian Tire lifer, there had been so many immediate matters to attend to that any pandemic thoughts Mr. Hicks did have were mentally tucked into the “this won’t last long” file. “It seems ridiculous,” he says, “but I think that was just the headspace I was in.”
Until the next day. He recounts with precision the morning of March 12, when CTC chair Maureen Sabia knocked on his office door 45 minutes after that news release went out and walked him into the boardroom down the hall for his first official greeting as CEO. It was an emotional changing of the guard, what with the e-mailed congratulations from workers Mr. Hicks had known for eons, the sharp realization that he was now wholly responsible for an organization that generates $15-billion in annual revenue, and the momentous challenge of taking over from his predecessor, Stephen Wetmore, described by Ms. Sabia, dauntingly, as a “once-in-a-generation leader.”
And then, wham. “While the day was unfolding, my first real day, [Ontario Premier] Doug Ford announced schools in Ontario would be closed, the NHL suspended its season, Broadway theatres were closed … .” Really, you could cherry-pick the bad news on such a fruitful day. Was that the day the province of Quebec declared a state of emergency? Why, yes it was. The World Health Organization had already declared a global pandemic.
Need it be said there would be no honeymoon period? Within hours, Mr. Hicks was notified that a worker at a SportChek store had come into contact, on a flight, with a passenger who’d tested positive for the coronavirus. The health authority had put the worker on notice, and the worker had started to tell co-workers and so on, until 7:30 that night, when the lone person left standing at the SportChek outlet in Stouffville, Ont., was the store manager, with 90 minutes to go until closing.
Frantic is the word that pops into Mr. Hicks’s mind. “Knowing what to do, what the right protocol is – do we keep the store closed? Do we put a sign on the door? What obligation do we have to inform the rest of the employees?” Employees, by the way, who stretch from sea to sea.
It is inevitable that any tour through CTC is carried along by the adage that more than 90 per cent of Canadians live within a 15-minute drive of a Canadian Tire store. The CTC “family of businesses” – including Tire, SportChek and Mark’s and Atmosphere and gas bars and financial services – puts tens of thousands of Canadian workers under the wing of Mr. Hicks’s brand-new leadership. His tenure was meant to achieve the stated goal of making the company the No. 1 retail brand in Canada by 2022 – a date that, not coincidentally, marks the centenary of the moment when Billes brothers A.J. and J.W. bought a one-stop garage in east-end Toronto, later incorporating under the grand, aspirational name Canadian Tire and launching, during the Depression, the beginnings of an associate dealer network that forms the 500-store spine of the Billes-controlled empire to this day.
Greg Hicks is a writer, a note-taker. So he can leaf through his daily journal of chicken-scratches – his term – to illustrate the ways in which his leadership trajectory has been yanked off script. Take March 18. At 6 p.m., he was notified of the first positive COVID-19 case at a SportChek store in British Columbia. He wrote that down. “Stock closes @ 7 year low $74.31.” (A note from late February recorded a share close of $140, and then an early March close of $127. You get the picture.)
On Monday, April 13, he wrote at 9 a.m.: “Website not loading @ all.” Followed by: “multiple network issues.” Followed by: “I don’t like the looks of this,” a notation that earned three exclamation marks.
Greg Hicks is spinning through what the folks at Canadian Tire call Retail City, a flat-topped, low-rise building in northeastern Toronto that, once upon a time, was the focus of Mr. Hicks’s role at Tire. The fresh-faced CEO, who has the scrubbed appearance of a student on picture day, is 49. We meet, initially, in the waning days of summer, a sunny morning when all might seem well with the world – until the masks and the distance and an overall dread sense of caution bring reality back home.
Two weeks earlier, the company had reported its second-quarter financial results. The headline news was a $20-million loss, compared with a profit of $177.4 million in the corresponding quarter in fiscal 2019. But it was the swing in sales through those 16 weeks at Canadian Tire Retail that told the more arresting tale: from an almost 2-per-cent decline in April to a 25-per-cent gain in May to a 38-per-cent increase in June. Mr. Hicks’s journal entries capture the executive’s brightening mood in real time, such as this one from mid-May: “Month of May CTR sales through the roof like nothing I’ve ever seen.”
Here’s an unexpected thought: Could it be that the pandemic was just the kick in the pants the oft-derided company needed to prove it’s more than a bricks-and-mortar antique? And might it be that successfully weathering the crisis will convince critics that one of the last Canadian chain retailers standing actually matters to Canadians? That’s a lot for an executive to navigate, which brings to mind an aphorism of which Mr. Hicks is fond: Rough seas make good sailors.
He believes the average Canadian does not fully grasp the scope of the company he now leads. Retail City is a showcase for its “owned brands” – Paderno, Premier paints, Woods tents, Noma lights, MasterCraft, Canvas and more – and a 50,000-square-foot mock store that demonstrates enticing merchandise displays. Outside it’s picnic weather, but in here, in mid-August, the company has moved into its all-important fourth quarter. Christmas has arrived. Noma lights. Noma trees. “Non-lit, pre-lit, easy to assemble, not easy to assemble,” Mr. Hicks remarks, bemused. Noma commands an 80-per-cent market share in lights and trees. This year’s holiday theme is called Enchanted Forest, with woodland-creature ornaments in gold and bronze, created by the company’s own style and design team. “What authority does Canadian Tire have to really decorate and inspire and entertain?” Mr. Hicks asks into the air, anticipating the thought that “Canadian Tire” and “style” do not an obvious match make. This has changed, he wants us to know. “Before, we would have gone to a factory, and we would have just selected an assortment based on what they had.” Today, style teams tour fashion runways to create, for example, table-scapes sold under the in-house Canvas brand. This is a long way from MotoMaster lug wrenches.
Mr. Hicks suspects, rightly, that consumers are unaware that across all its corporate banners, including SportChek and Mark’s, owned brands account for sales of more than $4-billion (nearly 27 per cent of CTC’s total revenue). This is a key aspect of what Mr. Hicks calls a “controlling our own destiny” strategy. Muskol insect repellant. Vermont Castings barbecues. Noma. “Like most of these acquisitions, the customer still doesn’t know that we own them,” he says. The deal for the Paderno kitchenware brand was finalized in the summer of 2017. In 2018, CTC announced its near-billion-dollar acquisition of Oslo-based Helly Hansen, a heritage brand famous for Barents Sea-battling waterproof wear. In the summer of 2019, Mr. Hicks led the purchase of Party City stores in Canada for $174.4-million, hoping the consumer’s desire for all-season celebrations adorned with latex balloons and treat-bag tchotchkes would be a new platform for growth.
In addition to the growth-by-acquisition strategy, there’s the in-house product-development strategy. We have just missed the industrial engineer who has been testing what will one day be a Noma vacuum cleaner that can suck sticky Cheerios from a low-pile carpet. That project, three years in the works thus far, seems an audacious gambit to give Mr. Dyson a run for his money. “Product development is a whole new muscle for us,” Mr. Hicks says. “I think the days of Crappy Tire are long gone.”
It feels heartless to mention that singer-songwriter Kathleen Edwards has evoked that appellation in her recent song Options Open. (”I blame it on the weekly flyer/That took me down to Crappy Tire”). The CEO appears to physically deflate upon hearing this news, like helium escaping a Party City balloon. “Oh, you’re kidding me,” he says. “We have worked so hard to remove that from the Canadian lexicon.”
The epithet no longer fits as it once did. Owned brands are ideally driven through three merchandising channels: good, better and best. Take kitchen stuff. There’s the “good” kitchenwares line offered by Tire’s own Master Chef label, and the “best,” which it landed by buying Paderno. “We’ve been looking for a ‘better’ kitchen brand for a long time,” Mr. Hicks says of the missing piece of the in-house strategy. That strategy must be enhanced by also selling revered brand items, such as $400 KitchenAid stand mixers. (Tire does not own KitchenAid.) So you create a Noma vacuum not to go head-to-head with Dyson, but to tuck in just underneath it, to fill a lower price point. Any new in-house product is put before a testing panel of 75,000 consumers. “Tested for life in Canada,” Mr. Hicks says – an essential part of changing the consumer’s perception around quality. “Can we create brands that Canadians love and covet and remain loyal to over time? That’s the intent.”
Mr. Hicks talks about trusting the brand that’s on the outside of the store, and trusting the brands inside, too. It’s also the corporate strategy to survive against yapping big-footed American competition, including Walmart and Amazon. “Few, if any, industries have witnessed as much change in such a short period of time,” says retail consultant Bruce Winder, who worked at Canadian Tire long ago. Mr. Winder refers to Amazon as the alien retailer of the future – the future being now. The omnipresent giant has already won what the industry calls the last-mile race, being able to effectively, efficiently and affordably tackle the pick, pack and delivery piece that it was built for. Canadian Tire, Mr. Winder says, “is looking for brands that have cachet, that they own proprietarily, that aren’t on Amazon” – a shrewd strategy, as far as he’s concerned.
Marco Marrone retired from Canadian Tire a half-dozen years ago, but with more than two decades at the corporation, ultimately as president of Canadian Tire Retail. He pretty much saw it all. “Do you know how many times the company was considered dead? When Walmart came in, we were dead. I remember that – we’re dead. Target came in – we’re dead.”
Target proved not to be a slayer, wildly misjudging the Canadian market and announcing its exit in 2015 after a brief two-year run. That obviously worked in Tire’s favour. Its approach to online shopping and ship-to-home did not. Test runs dating back to 2009, a partial rollout, a complete pullback, a return to testing home delivery in 2017 – by which time Amazon was already more than two decades old. “They [Canadian Tire] were very late to the game with their online capabilities,” says Mr. Winder. “Very, very, very, very late.”
Mr. Hicks acknowledges the corporation’s bricks-and-mortar bias and its botched online strategy left it completely out of step with the times. There was, as he says, a cloud hanging over the company. What the company has in its favour is geography and coverage and reach. “We have been building this supply-chain network for 100 years in this vast land,” he says.
Mr. Marrone tries to put his finger on the intangibles that work in Tire’s favour, but that’s the thing with intangibles: You really can’t. Maybe the foreign competitors didn’t diligently analyze the Canadian Tire dealer network. “They have skin in the game,” Mr. Marrone says of the associate dealers in Wawa and Moose Jaw and Steinbach. “It’s hard to place a number or a value on it, but it’s one of those soft items. It’s human nature – to protect your livelihood. It’s a large corporation, yet it has a local face.”
In the early part of this year, as Mr. Hicks was wondering whether he might be promoted to the job of chief executive, he would have understood the imperative of building a strong relationship with the dealer network. Once upon a time, he saw owning a Tire store as his own destiny. His father was an executive with the company and, long ago, owned a Tire store in Carleton Place, just west of Ottawa. Two uncles were dealers. Mr. Hicks worked at the Carleton Place store during summers at university. “I wasn’t going to the interviews and doing everything that all my peers were doing, because I knew what I was doing – I was going to be a Canadian Tire dealer.”
Post-university, he advanced through the conventional Tire jobs, from associate buyer to a manager of buyers to a manager of a division of buyers. Ultimately, marriage and a happy life in Toronto caused him to rethink his future. “One thing with Canadian Tire is you can’t say no to your first store, and your first store could be in Wawa.”
In 2006, he left to run the Canadian arm of TSC Stores, an Ontario-focused farm and ranch retailer that had been purchased by a Toronto private equity firm. Then came the recession, and then came a period of consulting, and then came a contract with Tire to strategize on how to build its outdoor recreation business. His key recommendation: buy the Woods brand. It was Mr. Wetmore who persuaded Mr. Hicks to return to the company full time. “One of my first moves was to finalize the Woods deal and get it done,” Mr. Hicks says of the company whose gold-rush history in expedition gear predates even Canadian Tire. The year the deal was struck, 2014, the combined sales for Woods and Tire’s Outbound line were approximately $10-million. By early December, 2020, combined sales had surpassed $250-million (no doubt with an extra bump from the pandemic, when seemingly everyone suddenly embraced camping and hiking and biking).
CANADIAN TIRE
TSX weekly closes
$180
160
140
120
100
80
60
40
20
0
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
AUGUST 2000
APRIL 2006
JANUARY 2009
Stephen Bachand
Wayne Sales
Tom Gauld
retired
retired
retired
Wayne Sales
Tom Gauld
Stephen Wetmore
hired
hired
hired
DECEMBER 2014
JULY 2016
MARCH 2020
Stephen Wetmore
Michael Medline
Stephen Wetmore
retired
fired
retired
Mark Medline
Stephen Wetmore
Greg Hicks
hired
rehired
hired
THE GLOBE AND MAIL, SOURCE: bloomberg
CANADIAN TIRE
TSX weekly closes
$180
160
140
120
100
80
60
40
20
0
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
AUGUST 2000
APRIL 2006
JANUARY 2009
Stephen Bachand
Wayne Sales
Tom Gauld
retired
retired
retired
Wayne Sales
Tom Gauld
Stephen Wetmore
hired
hired
hired
DECEMBER 2014
JULY 2016
MARCH 2020
Stephen Wetmore
Michael Medline
Stephen Wetmore
retired
fired
retired
Mark Medline
Stephen Wetmore
Greg Hicks
hired
rehired
hired
THE GLOBE AND MAIL, SOURCE: bloomberg
CANADIAN TIRE
TSX weekly closes
$180
160
140
120
100
80
60
40
20
0
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
AUGUST 2000
APRIL 2006
DECEMBER 2014
JULY 2016
MARCH 2020
JANUARY 2009
Stephen Bachand
Wayne Sales
Stephen Wetmore
Mark Medline
Stephen Wetmore
Tom Gauld
retired
retired
retired
retired
fired
retired
Wayne Sales
Tom Gauld
Stephen Wetmore
Michael Medline
Stephen Wetmore
Greg Hicks
hired
hired
hired
hired
rehired
hired
THE GLOBE AND MAIL, SOURCE: bloomberg
Mr. Hicks says his time away from the Tire family had nothing to do with tumult at the top, but the company’s leadership has often been rocky. His exit in 2006 coincided with a chaotic change of command. All he’ll say is that the company he returned to in 2014 was more “professional.” That the company has struggled nailing the seamless leadership piece was on display again that same year, however, when Mr. Wetmore stepped back as CEO, putting veteran Tire executive Michael Medline in charge. He lasted only about 19 months before being suddenly yanked and replaced by Mr. Wetmore. (Mr. Medline became CEO of Sobeys not long after.)
Here’s a long-ago story: Mr. Hicks’s father was busy with paperwork one Saturday morning in his office at Canadian Tire headquarters in Toronto, and he had taken young Greg along, as he sometimes did. Down the hall that morning strode a giant in young Greg’s eyes – Dean Muncaster, the company’s then CEO. “I remember him being 10 feet tall,” Mr. Hicks says. “I shook his hand.”
Mr. Muncaster had earned a reputation as a retail legend. In the mid-1980s, Maclean’s magazine described Mr. Muncaster, who had started with the company in 1966, as a leader who had masterminded its growth from a $100-million regional player into a $2-billion-a-year, near-400-store empire featuring a broad mix of merchandise. The Billes brothers had chosen the name Canadian Tire for the simple reason that it sounded big. Mr. Muncaster made it so. He also became an exemplar of the ruthlessness of corporate life: He was fired an hour before the company’s annual meeting in 1985, taking the fall for the disastrous purchase of Texas-based White Stores Inc. He led the meeting nevertheless. One attendee said the proceedings displayed a “lack of dignity.” Another called it “tacky.”
Martha Billes was at that AGM, having taken over the board seat occupied by her father, A.J. Today, she takes issue with how those events were reported. “I know he stood at the podium and cried,” she says in an interview. She recorded it all. “Phenomenal,” is how she describes the proceedings. Ms. Billes had fought long and hard to be on that board – a gift naturally and easily bestowed on her two brothers. Mr. Muncaster, she says, had been given an extensive period of time to come up with a strategic plan. “He came up with nothing.” His resignation was requested weeks before the AGM. “He was told that his solution, which was a non-solution, did not satisfy the board nor the company.”
A decade later, Ms. Billes would launch an epic corporate battle over the future of Canadian Tire Corp. She won. Today, she controls approximately 41 per cent of the voting shares. Her son, Owen, controls another 21 per cent. The phrase “serving at her majesty’s pleasure” comes to mind. Her friends currently refer to her, she says with amusement, as “her serene highness” in recognition of her recent appointment as an Officer of the Order of Canada. Ms. Billes, who comes across as direct and plain-speaking, laughs easily. She is 80 years of age and determined that history not play its conventional tricks on the company she controls. “That old tradition of the third generation loses it – there’s no way I want that to happen. No way Owen wants that to happen.” Shirtsleeves to shirtsleeves in three generations? “Or barefoot to barefoot,” she says more descriptively.
Mr. Hicks seems slightly surprised to find himself in the position of ensuring the company does not falter. “Quite frankly, I didn’t think it was my time,” he says. The more obvious choice might have been Allan MacDonald, to whom Mr. Hicks reported. Ms. Billes credits Mr. MacDonald particularly with his accomplishments around the consumer loyalty program, meaning the evolution of Triangle rewards into a credit card that lets shoppers earn CT Money across all the company’s banners. “They were both very strong contenders,” she says. But Mr. Hicks was born into a Canadian Tire family. His brother David is a dealer. He has a “spark,” a “determination.” Protecting the sense of nationhood, the DNA of the corporation, is key, in Ms. Billes’s view. She has adopted the term “North Star,” the in-house nostrum that underscores the company’s seemingly simple objective: to be there for life in Canada. The pandemic has put a spin on that: to be there for life in Canada, no matter what life looks like.
Just to be clear: Is Mr. Hicks in the CEO’s office only until Owen Billes, himself a dealer, takes over? “No no no no no no no,” is Ms. Billes’s swift response. “He has no eyes on the executive suite, but he will keep his eyes on the executive suite, just as I have.”
The demands of Mr. Hicks’s early days in the top spot can be looked at from the perspective of chasing stock, of struggling to fulfill online orders – nearly a quarter of shoppers couldn’t even get onto the site in their first attempt, and e-commerce orders shot up from fewer than 4,000 daily to 120,000. Specifically, that meant making such pragmatic decisions as shifting 200 tractor-trailers of bicycles from closed SportChek stores to open Canadian Tire ones. Demand moved from protection (paper products, sanitation) to shelter in place (paint) to boredom-busters (dartboards) to the outdoors (trampolines). It was Tire dealer David Hicks who said to his brother, “If I were you, I’d get your team all over dumbbells.”
Stock-chasing examples fail to capture the panic of the moment. Mr. Hicks did not favour a textbook response. “If academically you opened up a playbook that said you’re going into survival mode, your instinct immediately would be to cut costs,” Mr. Hicks says. “You’ve got to fire people, shut down your marketing.” Instead, the company launched a fast use-of-cash audit, and awakened with some surprise to the realization that 70 per cent of cash was tied up in inventory. Shutting down goods destined for SportChek happened in a flash. His real-time notes confirm what his thinking was in the moment: “I don’t want to use covid crisis to right size our cost structure ... It’s just not right.”
There have been many lessons learned, and Mr. Hicks is earnest in his expression of these. In this era, his daily e-mails to employees, his pledges to be open and transparent, his examination of leadership “learnings,” could sound like tips ripped from an MBA textbook. He wrote a list of guiding principles in his notebook. “Be prepared for the worst. Don’t overreact but be ready,” is No. 1. “Take care of yourselves,” is No. 5. Cross-collaboration, agility, bureaucracy as an obstacle to adaptability – he spends considerable energy on the design of his leadership and defeating barriers to it. Yet there’s nothing hollow or self-interested in this. “He’s the real deal,” says retail consultant Mr. Winder. “He was born to be in that job.”
Mr. Hicks equates running Canadian Tire with nothing less than nation-building. In that regard, “we’re not telling our story,” he acknowledges. And here we are at the ultimate time of togetherness, in a moment, as Ms. Billes says, that has “changed our world.”
“Everything they do should be made for Canada and made for Canadians, ‘cause we’re different up here,” says advertising legend Geoffrey Roche. “They should do everything humanly possible to nail this thing of being a Canadian company and doing things differently than anybody else.”
How many out there are acquainted with Jumpstart, the CTC charity that launched an $8-million sport relief fund to keep children’s fitness programs running during COVID? You better not write about Canadian Tire without mentioning Jumpstart, Ms. Billes says sternly. “Jumpstart is a big piece of our corporate entity.”
Mr. Hicks uses Jumpstart as one example of how the company is there for Canadians, and the importance of fitness, too. His first memory of shopping at Canadian Tire was buying a pair of Lange moulded skates. (“The other kids made fun of me.”) Favourite stick? Still a Sher-Wood PMP 5030, which draws a, “Hey look, my dad uses a wooden stick” from one of his sons in the hockey change room. Tire owns the Sher-Wood trademark.
All these years later, he’s running the show. The financials have turned around. E-commerce sales in the quarter ended Sept. 30 were up 132 per cent. Year-to-date, they were up $1-billion. Sales growth for all those owned brands was up 128 per cent. As Mr. Winder says, the company has pulled the nose up at the last minute before. “Could we have got there without the crisis? I don’t know,” Mr. Hicks says. “It really will guide how we operate in this business for the next number of years.”
The last word goes to Martha Billes: “He really wanted the job, and we gave him the job, and the world gave him a good whack.”
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