As spectacle, the shakeup appeared a righteous falling on swords for Loblaw's recent dismal performance. Adding pathos was the fact that it was the stunning turnaround of a beleaguered Loblaw in the 1970s that proved Galen Weston's own corporate mettle to his father, Garfield Weston. Shunning his father's advisers, Weston hired young Richard Currie, a strategic mastermind, and Dave Nichol, the manic marketing genius who created the President's Choice brand and brought balsamic vinegar to the masses. Riding the crest of incipient foodie-ism, they transformed the shabby, money-losing chain into an industry firebrand.
Now, Currie and Nichol are long gone, and Loblaw has lost its cachet as a product innovator and smart merchandiser. In the past few years, the company shifted to discounting and non-food merchandising, losing its competitive edge on the food side. It later embarked on a massive, disruptive overhaul of its supply chain in anticipation of Wal-Mart Supercentres' arrival in Ontario later this year.
On a conference call with analysts, the 65-year-old Weston stated emphatically that his son is now in charge. Still, the three-replacing-one geometry lacks clarity. As it stands, the younger Weston will preside over the President's Choice banking unit, store construction and labour relations, a prickly area given the threat of an imminent strike by unionized workers in Ontario. Foote will handle Loblaw's supply chain and its core food and general merchandise businesses - the day-to-day. The more seasoned Leighton will "advise," which some industry watchers have interpreted to mean "be in charge." Yet others insist that Galen Sr., a shrewd judge of executive character, would never throw his son into the fray without believing him capable. As one analyst observes, the Weston family, with a $5.5-billion interest in Loblaw Companies "has a lot of skin in the game." Peter Holden, an analyst with Veritas Investment Research Corp. in Toronto, believes young Weston's corporate training wheels are temporary, "a short-term measure to bolster confidence while the participants settle in."
But there is little time for learning on the job. Analysts express concern that senior management will flee to competitors that are edging in. Perry Caicco, of CIBC World Markets, expresses the mood in the typically craven language of brokerage research reports: "We do not view the recent management changes as instantly positive," he writes. The stock, which has fallen from $75 to under $50 since April 2005, dropped $1 on the news. In a highly unusual gesture in the cloistered, tight-lipped Canadian business establishment, Currie, now chairman of BCE Inc., vented his dismay over the reorganization to the Globe and Mail, saying he found the timing questionable, the executive troika "fuzzy," and the deterioration of a company that he spent three decades building "heartbreaking."
Such public disapproval of anything Weston-related is rare. Galen Weston Sr. and his wife, Hilary, travel elegantly on both sides of the Atlantic, chumming with royalty and donating generously to charity and the arts. If the couple can be faulted it would be for their selfishness in not providing grist for gossip mills. Their children, Alannah and Galen, evidenced none of the bad behaviour so often seen in billionaire offspring. That Galen Jr. would one day head the company founded in 1882 by his great-grandfather, George Weston, was a given, just like the eccentric Weston family tradition of saddling boys with names that begin with "G." To date, however, the elder Alannah has shown the greater affinity for retail. She is credited with overseeing the new corporate branding at family-owned Holt Renfrew and the revitalization of Selfridges in London, where she is creative director.
Known for her style and love of art, it is unlikely that the London-based Alannah would find professional satisfaction in the cutthroat brutalities of the supermarket industry with its focus on margins, shelf space and dairy rotation. Nor did Galen Jr. display an early interest in the family businesses. His first love was theatre. As a pupil at Upper Canada College he was an avid participant in the drama department - in addition to being a good student, star athlete and event organizer. In 1998, he and school pal Michael Shore created Spoke Productions, which staged plays in Toronto, New York and London. In 2004, the pair opened The Spoke in Toronto, a private club for the city's creative community.
All the while, however, he prepped for the corporate role he was born to play, earning a B.A. from Harvard and an M.B.A. from Columbia. Known to share his father's flair on the polo field and his people skills, it's unclear yet whether Weston has inherited pater's mercantile touch or knack for spotting talent. He has told friends he has grown to enjoy business, particularly during his stint at President's Choice banking services. Certainly there is little evidence he is conflicted about his destiny. By all reports, he's an impeccably decent guy, with lovely manners and zero social pretension. He dislikes being called Galen Weston Jr., preferring GG or G2, his family nickname (Galen Sr. is G1). Like his famously private father, he avoids media scrutiny, declining a request for interview. When his artfully raw industrial loft in a grungy Toronto neighbourhood was photographed for Toronto Life magazine in 2001, its resident was referred to obliquely as "The Bachelor."
That status ended in 2005 when he married Alexandra Schmidt, a member of the Bata shoe-empire family, in a chateau in Provence. The stylish couple has emerged as prom king and queen of Toronto's young socialite set. Their lavish pre-wedding party was held in an abandoned Loblaws warehouse transformed into a wonderland: white carpeting was laid, orchid chandeliers blazed, a classical trio fiddled and the couple's image was projected on water cascading down walls. After a Ben Mulroney-hosted video that paid tribute to the betrothed couple, Weston serenaded his future bride with Are You Lonesome Tonight? The stage he now assumes is less glamorous, though far more histrionic. The fact the family owns the theatre offers G2 little protection. Critical eyes are already on him to assess how able a player he will be.
Maclean's October 9, 2006
Author ANNE KINGSTON