Bertram Loeb; Ottawa rich guy (Supermarket chains)
Hyfler/Rosner
Would-be Ottawa rabbi entered the family grocery firm with
grandiose visions, only to lose the IGA empire. Later, he
built a chain of gas stations and donated a fortune to
charity
ALEX DOBROTA; Globe & Mail
His father hand-picked him to become a rabbi, but Bertram
Loeb had other ideas. After a stint as an army canteen
manager, he decided to transform the family store into
something much larger. Years later, after he lost control of
the IGA grocery empire, told the Ottawa Citizen: "I made a
fatal error. Instead of going to study the Bible and Jewish
history, I should have gone to Harvard to study business."
As the head of an international grocery chain, Mr. Loeb
tended to rely more on his own philosophical considerations
than on the forces that drove the market. He followed
visions of grandeur and sometimes ignored economic factors
so that, in the end, his ambition was his undoing.
The Loeb name, which he fought so hard to bring to the helm
of the corporate world, became attached to the several
Ottawa institutions that benefited from his
multimillion-dollar donations. "His father had always said:
'Make sure the family name retains integrity,' " said his
daughter Naomi Loeb. "The money was always a means to an
end, it was never an end in itself."
Bertram Loeb grew up in Ottawa in a family of Russian Jewish
immigrants. By all accounts, his father, Moses Loeb,
emigrated to the United States to avoid being drafted in the
czar's army around the turn of the last century. But in
Cincinnati, he grew nostalgic for Russia's winters and moved
to Ottawa where he started a candy and tobacco store. The
store was close to Ottawa's train station where business was
brisk only around departure and arrival times. In the
meantime, he would harness his horses to a carriage and his
peddle goods to other stores. It fell to Bertram and his
five brothers to tend to the horses and to the family
warehouse.
Young Bertram had other chores, too, and often displayed a
knack for dodging difficulties. His mother often gave him 25
cents to take to the market and buy a live chicken for
Friday's dinner. On one occasion, as he was pedalling home
on Rideau Street the chicken flew out of his bicycle basket
and began strutting back in the direction of the market. The
boy had just seconds in which to make a decision. Should he
run after the chicken at the risk of losing his bike? Or
should he return home empty-handed and face the wrath of his
mother?
"He dropped the bike, ran after the chicken, got the chicken
and ran back and found his bike . . . so they had their
Friday-night chicken dinner," Ms. Loeb said.
Often, Bertram used his resourcefulness to make mischief.
One of his favourite pranks was to coat garlic in syrup and
tempt his friends with "chocolate-covered almonds," Ms. Loeb
said.
Perhaps because of young Bertram's ability to think on his
feet, Moses Loeb decided to send his son away to rabbinical
studies. He spent four years studying literature and
philosophy at New York University, plus religion at the
Jewish Theological Seminary in New York. After that, he
moved to Jerusalem to pursue a master's degree in Hebrew and
returned home just before the Second World War broke out. In
1940, Mr. Loeb joined the army and served as a sergeant at
Camp Petawawa, where he managed the base's canteen.
When he returned to Ottawa in 1945, he abandoned his plans
to become a rabbi and chose instead to help his father run
his business, which by then had become a successful
wholesale operation called M. Loeb Ltd. "In many ways, he
was a misfit in the world of business," his daughter said.
"There was this side of him that wanted to do business. He
was certainly interested in business, but he had no
training."
Instead, Mr. Loeb had a vision. Unlike his father, who often
paid for his transactions in cash and hesitated to take
risks, Mr. Loeb dreamed of turning the family business, in
which some of his brothers also worked, into an
international venture.
When Moses Loeb died in 1951, Mr. Loeb looked to the United
States, where a group of independent grocers had banded
together under the banner of the Independent Grocer's
Association (IGA) to resist a fast-spreading chain of new
stores run by the Atlantic and Pacific Tea Co. He brought
the IGA concept to Canada and, one by one, began convincing
Ottawa grocers to join the franchise operation and to buy
their stock from his wholesale business. The IGA franchise
quickly spread across the country. By the end of 1952, the
chain embraced 34 stores and racked up $3.5-million in
sales. Along the way, Mr. Loeb introduced an incentive
system in which customers received a stamp for every 10
cents' worth of purchases. Shoppers could accumulate the
stamps and trade them for a variety of products.
Much like his father, Mr. Loeb managed his business with a
hands-on approach and had little patience for dissenters.
"He was very dynamic and he liked to do things his own way,"
Ms. Loeb said.
His success quickly took him abroad. In the 1950s, after he
helped raise large sums of money for Jewish charities, he
was invited to Israel, where he met David Ben-Gurion, the
country's first prime minister. Mr. Ben-Gurion said Israel
needed entrepreneurs like Mr. Loeb and asked him to start a
supermarket chain. Mr. Loeb rose to the challenge and in
1958 opened Israel's first chain under the name Supersol.
It wasn't that easy, of course. Mr. Loeb faced stiff
opposition from Orthodox Jews who prohibit placing dairy and
meat on the same table. Many of them wondered how customers
could transport dairy and meat products in the same cart
without breaking religious rules.
Simple, Mr. Loeb responded, with his characteristic flair
for fixing snags. By placing dairy inside the shopping cart,
and the meat in the cart's top basket.
Meanwhile, IGA Canada had developed by leaps and bounds. By
1962, it had posted sales of $140-million and a 20-fold
increase in earnings. The chain grew so large that it
acquired a company airplane and a computer, both of which
were rare at the time.
Even so, Mr. Loeb's resourcefulness was not enough to
counter the setbacks he suffered two years later. In 1964,
it was revealed that the man he had picked as the chain's
general manager had embezzled $1.3-million (U.S.) from the
company's coffers. The board of directors, then chaired by
the Montreal businessman Charles Bronfman, dismissed Mr.
Loeb as its president.
"It was a huge blow to him personally" Naomi Loeb said. "For
a number of years, he was very, very bitter about what
happened and he turned his back on everything Jewish,
Then, in 1965, Mr. Loeb chose to donate $450,000 to Ottawa's
Civic Hospital for a medical research centre. The city's
mayor, Charlotte Whitton, refused the donation, claiming
that it would force taxpayers to assume liability for the
building. Some observers suspected that Ms. Whitton cringed
at the thought of seeing a Jewish name on a city facility.
"Many people thought she was an anti-Semite," Ms. Loeb said.
Instead, Mr. Loeb offered the money to Carleton University
for the construction of a new social-sciences building that
now bears the Loeb name. Decades later, long after Ms.
Whitton's tenure as a mayor, Mr. Loeb would lead a
fundraising campaign for Ottawa's Civic Hospital that netted
$14-million to build a research centre named after his
parents.
"He had a big vision," Rabbi Reuven Bulka of the Machzikei
Hadas Congregation in Ottawa said. "He looked at charities
which are more than just empty pits. He liked to do things
which would generate results."
Ms. Loeb said her father believed in giving back to the
community and in trying to make the world a better place.
"He really did have a sort philosophical and spiritual side,
which is kind of incompatible with business."
As a rule, Mr. Loeb avoided red tape and relied on his own
instincts when making donations. "He was a very trusting
guy," Mr. Bulka said. "He didn't need fancy documents --
just his vision and the thrust and the direction and the
purpose. That was enough for him."
Those instincts likely betrayed him during the 1970s. By
that time, sales of the M. Loeb Ltd. wholesale operation had
exceeded $1-billion and Mr. Loeb began an aggressive
expansion into the United States by buying a Chicago IGA
franchise. Unfortunately, he made several serious mistakes.
For one thing, his company's shares were not divided into
several classes, which meant such rivals as Loblaws and
Provigo could buy it up and plot a hostile takeover. To make
matters worse, his brothers had already sold much of their
stock, which left Mr. Loeb with control of only 15 per cent.
With theft problems plaguing his supply chain and rivals
slowly gnawing at his market share, the U.S. business
started bringing down the company's stock value and by 1977
the board of directors forced Mr. Loeb to step down as a
chairman.
It was a devastating blow and Mr. Loeb sold his shares. For
a time, he dabbled in politics, briefly accepting a
nomination as the Liberal candidate in the Ottawa-Carleton
riding for the 1979 federal election. In an unexpected move,
Mr. Loeb withdrew, blaming a bleeding ulcer, but at the time
some Liberal Party members gave a different version of
events. They said Mr. Loeb wanted a cabinet portfolio and
Prime Minister Pierre Trudeau refused to make promises.
Mr. Loeb never returned to politics. Instead, he made a
comeback in business. In the early 1980s, one of his former
employees asked him to invest in a chain of gas stations
called Sunys Petroleum. His new project started off with a
handful of locations and quickly grew to 250 stations in
Ontario and Quebec. "He just couldn't sit back and do
nothing," Ms. Loeb said. "He was just not capable of that."
Mr. Loeb successfully steered Sunys until 1996, when he
finally retired at 80 yet continued to make discreet and
careful donations. His most recent was a 2002 bequest of
$1-million to the Bertram Loeb Organ-Tissue Institute at the
University of Ottawa.
Bertram Loeb was born
in Ottawa on Feb. 6, 1916.
He died in Ottawa on Sept. 11, 2006, from multiple myeloma.
He is survived by his two daughters, Naomi and Diana, by his
grandson Samuel, and by his brothers Jules and David.