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.
The Globe and Mail
October 3, 2006
BERTRAM LOEB, BUSINESSMAN: 1916-2006
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
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.
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