Printer Friendly

Trott at a gallop.

Trott At A Gallop

Ralph Trott quickly greets us, then whirls away down the hallway like the road runner in the coyote cartoon. In a split second he punches the combination of the electric lock opening the large wooden door to the executive offices. He strides into the dimly-lit passageway lined with portraits of men with long ringleted hair and sober expressions.

These men were England's leading merchants and executives of The Hudson Bay Company granted a license by King Charles II to trade into Canada in 1670. The company has endured for 300 years. The Bay wound up as part of Thompson International, the newspaper publishing conglomerate in 1979. But the department store chain cut loose its 160 northern stores three years ago selling to a group of private Canadian investors.

Trott, 39, is the new Chief Executive Officer of North West and he is not big on the period paintings.

"These don't belong to us. They belong to The Bay. We're just looking after them," he says kindly. "We're just waiting for them to take them."

Changing the proud name of the HBC to The North West Company raised more than a few eyebrows among long-time employees of the old fur trader. The original North West boys were a group of salty privateers bankrolled in Montreal in 1760. They often traded gunfire with The Bay over fur trade territory. The two competitors realized there was more profit in cooperating than watching their back. In 1821 after many years of intense and bitter competition they joined under The Bays banner.

Retrieving the North West name for the new company took some doing, Trott said. Imperial Oil Limited (Esso Petroleum Canada) held the legal rights to it as name for one of its exploration companies. But Imperial graciously relinquished the historic name.

"They were satisfied that the name was the right fit for a company historically very Canadian," he said.

Trott admires the Inuit stone carvings in the corner of the passageway. They're in back-lit, protective, locked display cases. The works are a signature of the north, rich in symbolism of the Inuit life and the highest form of northern native craftsmanship which fetch prices of up to $50,000. Trott owns a sleek polar bear valued at about $10,000. And so he should, North West, among other things, is the largest seller of Inuit stone carvings in North America.

"I like it because it's a lean and mean bear which is my image of our company," he says.

Trott says company's thrust is to provide its largely native customers from New-foundland to British Columbia with what they want. And with television beamed into nearly all remote areas by satellite dish, the resident in isolated areas demands what everyone else gets - up-to-date merchandise.

Goods range from kiwi fruit, bananas, furniture, satellite dishes, videos, to all terrain vehicles, outerwear, hockey equipment, hunting equipment and household appliances. Trott says transporting a 10 kilo bag of potatoes to a remote area can cost almost as much as the price of the product itself.

And in many areas North West has competition. In the nickel mining City of Thompson in northern Manitoba, North West fights for every dime with Saan Stores, Woolworths, Canadian Tire, co-ops, and independents.

Finding the right suppliers, with the right products at the right price is another key component of successful retailing. "We have to be told what is selling well, such as Ninja Turtles, or fashion colors," Trott says. "That's the job of our suppliers and buyers."

Trott comes to the top job at a crucial and strategic time. The company must eventually gain expansion capital that will be raised in the stock market. But so far on its early cash flow it has done very well. Return on average equity is 19.5 per cent, which is in the top quartile of retail performers in Canada in 1989, according to Trott.

Plans are for the company to apply for a listing on Toronto Stock Exchange. Its 13 million shares carry a current in-house valuation of $6.27 and are expected to be available on a bid and asked basis. Trott says a public offering will come when the stock markets are more positive.

A lot of people are betting on Trott's guidance of North West through these tough times of high interest rates and low spending. He says July was the worst retail month in memory.

Yet, he is toughing it out. He earned his stripes at what he described as "Canadian Tire University" where scrupulous computerized attention is paid to inventory control, part of the North West's future focus, he says.

"Interest costs on inventory is one of the main areas where a company can cut expenses," Trott says. "Canadian Tire had a much more sophisticated approach to inventory control than The Bay northern stores had. We're moving to a computerized system to control inventory flow better."

In order to serve the north the company needs a guaranteed transportation system and that includes its own ice-worthy cargo vessels with a barge inside that can unload the ship where there are no docking facilities. Tons of goods make their way up the St. Lawrence Seaway to remote warehouses every season for distribution in the Arctic. Trucks travel winter roads over muskeg.

Trott has spent a lot of time in the field assessing store volumes. He says if goods aren't needed they shouldn't be in the system. "If a company misjudges a situation and has to fly large supplies in then that can affect the bottom line severely."

As a kid out of school Trott loved Canadian Tire and found himself leaping through the corporate ranks. He started as assistant buyer, then he became the youngest senior buyer in the corporation, then the youngest managing director in the company and finally as vice-president of the automotive marketing division.

"I kind of went though three year time cycles," he says. "I would take a job on, get good results and then move on through promotion into more intense, more complicated, responsible positions," he said.

His strengths are his high energy levels and his restless drive to achieve. He says he is very risk-oriented; "I'm willing to try things that haven't been tried."

He won the top job at North West based on those credentials because the owners needed someone to get things moving. Connections put him in the running for the job but he wasn't the only applicant the board of directors interviewed. A sizeable shareholder in North West is Paint Lake Investments. Two of the four shareholders are Jeff Gidney and Ian Sutherland. Sutherland is a director of North West as well. Gidney owns a Canadian Tire franchise and was the person who suggested to Trott that he apply for the job. Sutherland, whose sister is married to Gidney, is a former Winnipegger whose father, Hugh Sutherland, at one time ran The Bay's northern stores.

The majority shareholders who bankrolled North West are the Mutual Trust Company, Toronto, The Hudson Bay Company, Teachers Retirement Allowance Fund Board, Mutual Life Assurance Company of Canada, Bantor Company, the Toronto Dominion Bank Capital Group and Royal Trust Corporation of Canada.

Sutherland is the executive vice-president of the Mutual Trust Company of Toronto. He and Raymond Dore, the company's president, led these Canadian investors through the $187-million leveraged buyout; slightly more than the price of a pizza.

Says Sutherland: "There were a lot of Bay people who didn't agree that the northern stores should be parted from The Company," he said. "Including my father."

All that changed. All senior executives stayed on and bought shares in the new company which, after a three year deal with The Bay had to be renamed. The choice was The North West Company Inc., and the stores have been renamed Northern.

If Ralph Trott had been around at the time of the competition between The Bay and the North West he would have probably been the first one to fire a shot, though in the form of a catalogue rather than a musket ball.

His competitive edge would have been taken to the limit where he likes it. For relaxation Trott doesn't swing a golf club and he's not comfortable with spending time on public service board. His intense focus on business and his other love is formula auto racing.

"My idea of relaxation is driving a Formula 2000 for 50 laps," he said. And he has done that in Toronto when he was the head of the Automotive Division of Canadian Tire Corporation.

Trott sees far more opportunities than The Bay saw. He says that while the main thrust of the company is to serve the north there is a lot of things that the company has learned that can be utilized in the south.

He wouldn't elaborate but hinted that expansion could come through acquisitions. Expansion capital thrust will be led with the TSE listing, a precursor to a future public offering to come when the markets are stronger. A prospectus has already been prepared but Trott says the company has sufficient operating capital at the moment.

The annual report of the company for 1989 shows a $12-million return on equity based on gross sales of $441 million and increase of about a $15 million over 1988. Perhaps that's why the portraits of Bay men on the inner office passageway walls appear amused these days. Ralph Trott seems to have what it will take in the long run to improve on what they started so long ago.
COPYRIGHT 1990 Manitoba Business Ltd.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1990 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Title Annotation:Ralph Trott; includes related article on the North West Company Inc. deal makers
Author:Gage, Ritchie
Publication:Manitoba Business
Article Type:Cover Story
Date:Oct 1, 1990
Previous Article:After you, Gary.
Next Article:Not small peanuts.

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters