They feed the country ? and have what it takes to rake in the dough. But for some, the biggest challenge is keeping the peace around the family dinner table
The Phelan family members who now control Cara Operations ? with a net worth of $386 million ? are playing out what could be the final act in the company's time on the stage as a publicly traded entity. In August, sisters Gail Regan and Rosemary Phelan, along with niece Holiday Phelan-Johnson, offered to buy out all other shareholders at $7.50 per share and take the food-services company private. But the three have now put their bid ? originally set to go to shareholders on Dec. 15 ? on hold. In November, struggling Air Canada decided to void its contract with Cara to provide on-board meals. This prompted the women to re-evaluate their plan.
The move to take Mississauga, Ont.-based Cara private is the latest chapter in a tale of alleged feuding in the family. Gail Regan, a Cara board member, contends the offer is good business. “My great-grandfather founded the company in 1883, it went public in the late 1960s, and the stock is not performing,” she says. But the estranged brother of Gail and Rosemary, Paul David Phelan ? who has only a non-voting stake in Cara after selling off his voting shares years ago ? criticized the privatization plan, calling it opportunistic and inadequate. Undoubtedly, part of this family quarrel results from the failure of P. J. Phelan, the father of Gail, Rosemary and Paul David, to come up with a clear succession plan before his health failed. P.J. held on to his role of honorary chairman until his death, in 2002, at 84.
Among other food purveyors, Wallace McCain, who with his family shares a 32% stake in Toronto-based Maple Leaf Foods, has worked out a succession plan with younger son, Michael. As president and CEO, Michael negotiated in September the US$378-million take-over of longtime rival Schneider. Still, most of Wallace's fortune (this year it's $1.99 billion) comes from the privately held McCain food empire, based in Florenceville, N.B., which he owns with brother Harrison.
The Sobey brothers, cousins and their children have managed to build their family's wealth. Members of the Pictou County, N.S.-based clan, many of whom sit on the board of Empire Co. or its Sobey grocery division, saw their net worth rise a modest 7% to $897 million to end up No. 34 on our list. Meanwhile, St-Léonard, Que.-based cheese maker Saputo, has been grooming its next leader from family ranks. Chairman Lino Saputo has been preparing his son, Lino Jr., to take over since he joined the company, in 1988 (see “The grand fromage,” page 89). The younger Saputo, expected to become president and CEO by next August, will have a lot on his plate following the company's $51-million acquisition of an Argentine dairy company in October. But the more practice Lino Jr. gets running the firm, the better ? but at least his father thinks his son, as the next big cheese at Saputo, is ready to stand alone. By Mark Brown
From pharmacies to furniture stores and fashion retailers, the men behind the counters are tops when it comes to serving up the goods to consumers
The most effective way for retailers to make it onto the Rich 100 may be the drugstore trade. In fact, the three wealthiest individuals in the sector operate pharmacies: Quebec's Jean Coutu, Edmonton's Daryl Katz and Vancouver's Brandt Louie. Together, they make up more than 70% of the combined net worth ? $5.87 billion ? of the retailers on the list.
An aging population needing more drugs may have helped, but business acumen doesn't hurt, either. The wealthiest, Coutu, built his Montreal-based chain, the Jean Coutu Group, by expanding into Ontario, Eastern Canada and the United States. It's now Canada's second-largest drugstore retailer by revenue, behind Shoppers Drug Mart. Recently, the firm said it may bid for J. C. Penney's struggling Eckerd chain.
For Katz, however, a similar U.S. strategy has had its ups and downs. Katz Group owns Canada's largest drugstore business by number of outlets (over 1,500) under such names as Pharma Plus and Medicine Shoppe. But Katz's Minnetonka, Minn.-based Snyder's drugstore division recently filed for Chapter 11 bankruptcy protection as part of a restructuring that includes selling 77 stores operating under the Drug Emporium banner. Katz stresses, though, that the Snyder's stores themselves are doing well. In Canada, Katz has embarked on a campaign to relaunch the company's Rexall brand.
As for Louie, whose family-owned H. Y. Louie Co. owns London Drugs, the business plan is purely Canadian. (Louie's other assets in-clude charter airline London Air Services and Sonora Resort, a luxury fishing lodge in B.C.) London Drugs, which has 59 outlets, intends to expand more aggressively beyond the West.
Operating drugstores is not the only way for retailers to get rich; two of the seven merchants on our list have made their fortunes selling furniture. Edmonton's Bill Comrie, proprietor of Canada's largest furniture chain the Brick Warehouse, is now worth more than $400 million, while the Leon family of Toronto, which owns Leon's Furniture, is valued at $352 million.
Those who aspire to the ranks of Canada's richest retailers might want to look to the world of fashion. Montreal's Aldo Bensadoun continues to grow his mid-price shoe empire in Canada and around the world. Then there's Lawrence Stroll, who has taken his fashion sensibility upscale. With the money he made from the 1998 sale of Pepe Jeans and Tommy Hilfiger Canada (to Tommy Hilfiger Inc.), Stroll's Sportswear Holdings, headquartered in Hong Kong, last January bought an 85% stake in the latest darling of fashionistas, New York-based Michael Kors. Stroll also has a 25% stake in A&G Group, which owns Asprey, a high-end fashion store, and Garrard, a jeweller.
Now, if someone could come up with a cool shoe store that sold cutting-edge clothes and sofas to match ? and filled prescriptions as you shopped ? he or she could really make a killing. By Zena Olijnyk