Skip navigation

Saturday April 7, 2012

He led Canadian Tire from family-run chain to national retailer with sales of $2-billion

Executive's meteoric rise ended with failed foray into complicated U.S. market with the purchase of money-losing White Stores

Special to The Globe and Mail

Dean Muncaster was one of the great business minds of his generation. During his 19 years as president and CEO of Canadian Tire, before his tenure came to an abrupt and controversial end, Muncaster transformed the company from a family-run chain in central Canada and the Maritimes to the nationwide retailer Canadian Tire is today, offering everything from light fixtures, bird seed and paint to lawn chairs and snowshoes. He made many investors (including some of his employees) seriously rich.

"We had a janitor who retired as a multimillionaire," recalls Richard Hobbs, who had been Muncaster's closest colleague. "He made [Canadian] Tire the most successful public company in terms of growth and profitability in the country and was the darling of the business press. He was the most public business figure at the time."

Born in Sudbury, Ont., in 1933, Muncaster died in Puerto Vallarta, Mexico, on March 13 at the age of 78, of an aneurysm and a stroke suffered after entering hospital with a pancreatic attack.

Canadian Tire was in his genes. His father, Walter Muncaster, was one of seven brothers, five of whom, including Walter, owned Canadian Tire stores. Young Dean, the eldest of four children, began to work for his father when he was 12, sweeping the floor and stocking shelves. At 18, he was left in charge of the store and its 40 employees while his father took a month-long holiday. He showed a precocious aptitude for business the way some youngsters show an early musical ability.

That aptitude, coupled with an MBA, vaulted him to the top job at Canadian Tire at the age of 32, in 1965, the chosen successor of Alfred (A.J.) Billes, who had founded the company with his elder brother, Bill, in the years after the First World War.

"He was a man of great energy and it affected people around him," recalls his eldest son, Bob. "As a parent, he led by example. He was not an in-your-face person, and would rarely enter into open conflict. It was similar to the way he managed people."

After graduating from Sudbury High School, where he presided over the student council, Muncaster went to London, Ont., to attend the University of Western Ontario, the first person in his family to go to university. He obtained an honours degree in business administration and was voted "most likely to succeed" by his classmates, some of whom later joined Canadian Tire's management team.

Muncaster then earned an MBA at Northwestern University in Chicago. His parents, Walter and Bea, were proud of him when he wrote a paper on Canadian Tire and it was most likely Walter who sent the paper to A.J. Billes, then the company president in Toronto. Billes was sufficiently impressed to offer the keen young man with a brush cut a job with the corporation - the first time anyone was hired by Canadian Tire straight out of university and the first hire with an MBA.

What Muncaster had learned at two business schools is that information is power. At the time, the company knew only the sales and profits of each store. His first assignment was to introduce more sophisticated performance measurements, such as sales per employee, sales per square foot and inventory turns (the number of times the inventory is sold per year). Data like this were not widely used in the 1950s.

He joined the board of Canadian Tire in 1960, then left head office to help his father at the Sudbury store. In Sudbury he devised a new product numbering system that enabled dealers to identify their fastest-moving products.

What he really wanted was the president's job, but he did not think it would ever go to someone outside the founding family.

The two Billes brothers had six children between them. Dick Billes, son of Bill (who died suddenly in 1956), was the most likely candidate. But A.J. found him too conservative and risk averse. Fred Billes, A.J.'s eldest son, also wanted the presidency, but was deemed too volatile.

In 1961, after a blowup with his uncle over keeping the Toronto stores open on Boxing Day, Dick left to go to Imperial Oil, paving the way for Muncaster's return as heir apparent.

"I met him when he came to the company and we both went on the board at the same time," recalls Robin Law, the company's long-time general counsel. "I was very close to him till he died. In 1965, A.J. indicated to me that he wanted to retire and he wanted Dean to become president. It took about a year for me to bring it about."

Muncaster set about hiring a team from among his former classmates. According to Ian Brown's 1989 book Freewheeling, the young MBAs faced a lot of resistance from the old timers who believed that the best way to do something is the way it has always been done. "Muncaster and his team set to making Canadian Tire their company. Their audacity was quite possibly without parallel in the annals of Canadian business," Brown wrote.

When Muncaster took over, Canadian Tire's sales were less than $100-million annually. Muncaster's plan was to make it into billion-dollar corporation within five years. Once or twice a month he and his management team met at the Inn on the Park to strategize about how to achieve this. By the end of his tenure as president, the company had sales of $2-billion a year.

They moved the stores off the main streets to the outskirts of towns and started owning the buildings, renting them to dealers (dealers owned everything inside their stores). They bought twice as much land at each location than was immediately needed to allow for expansion, so their real-estate holding became enormous. They tore down stores and rebuilt them every few years, and the stores got bigger and bigger. Building a 40,000-square-foot store was considered madness at the time, but it paid off in increased sales.

They created a financial arm to run their own credit-card services and overhauled the dealer selection process in order to find the most motivated candidates rather than the ones who simply had the most money to invest. They devised methods unheard of in other franchise operations of moving dealers from small to ever larger stores.

On Muncaster's watch, Canadian Tire expanded west of Ontario for the first time, opening successful dealerships first in Manitoba, then on the Prairies and finally, in the late 1970s, in B.C. Canadian Tire stock rose to new highs and Muncaster was invited on numerous boards - Black & Decker, Sara Lee, Ontario Hydro, Bell Canada. He was also active in the Young Presidents' Organization, a global network of chief executives.

"He used to be director of CP Hotels, which meant we travelled for vacations to the Banff Springs Hotel and Château Frontenac," recalls Bob Muncaster, now a Bay Street lawyer. "On ski vacations, we stopped to visit Canadian Tire stores in the Eastern Townships. The dealers worshipped him - we got to see that first hand. The regions where there was expansion in B.C. and Quebec were especially grateful."

"Where Dean was really incredible, he always took responsibility for any error made by someone below him - there was never any pointing of fingers or criticizing anybody," Law recalls. "He was very analytical. When there was an issue to be dealt with, he would ask you a question and you would realize that the answer was the answer to whatever the issue was. Next thing you knew, you'd be given credit with coming up with this idea. During the 20 years he was president, the company was sensational in its profits and he was the spokesperson. But that wasn't natural for him, the high profile. The analytical skills were where he shone."

Meanwhile Muncaster's relationship with his former mentor, A.J. Billes, who had stayed on to work in the company's tire department, became icy. "The founding family occasionally wanted to get involved in management," recalls Rich Hobbs, who sometimes had to play the heavy. "That could never be allowed to happen."

Muncaster's meteoric rise also put a strain on his marriage to Grace Rodwell Muncaster, the mother of Bob and his brother Bernie.

"He had married his high-school sweetheart. She was a quiet and demure small-town young lady," Martha Billes, A.J.'s daughter, recalls in an e-mail. "My mom took her under her wing a bit. The marriage lasted till the two sons were in their teens."

In 1977 Muncaster married Evelyn Bennett, a young widow who had been his secretary for 10 years. That marriage also ended in divorce.

By the early 1980s, Canadian Tire had about 380 stores across the country and Muncaster believed there was no room for further growth within Canada. He and his team bought the money losing Texas-based White Stores, which had a similar product mix to Canadian Tire. But the stores were in bad neighbourhoods and the U.S. market was tough to understand. Though his team worked hard for a turnaround, losses kept piling up (eventually reaching $224-million) and the board, now dominated by the Billes siblings as the majority owners of the voting shares, ran out of patience. In June, 1985, Muncaster was fired with a million-dollar severance and the board pulled the plug on White Stores.

Muncaster busied himself with his directorships, and was made vice-president of Montreal-based Canadian Corporate Funding, an investment company. In 1990, he and a group of investors acquired Bargain Harold's from K-Mart, a chain of small discount stores selling housewares and cleaning supplies. He had never previously gone into a Bargain Harold's. He cleaned up the stores and tried to introduce up-to-date inventory control, but failed to rescue the discount chain. It went into receivership and then into bankruptcy in 1992.

By then he had married his third wife, Brenda Bell. A third son, David, was born, now a graduate student in history. After his marriage to Brenda ended, he married for the last time. With his fourth wife, Joan Cameron, he spent 17 happy years living in Collingwood, Ont., and wintering in a rented condo in Puerto Vallarta.

In Collingwood, he continued to exercise his leadership abilities as chair of the Collingwood Utilities Service and Collus Power Corp.

He was taught to sail by his friend Vic Searles, and the sport gave him enormous pleasure for his last 30 years. According to his son Bob, he could do anything on a boat, including rebuild an engine.

He is survived by Joan, his three sons and five grandchildren. A celebration of his life will take place at the York Club in Toronto on April 14.

Back to top