Is this the final demise of White Rose Nurseries?

Alexandre Raab immigrated to the Toronto area from France in 1954 and founded what became White Rose Crafts and Nursery Sales Ltd. in 1957. It was touch and go at first, as he worked from a single outlet on Hwy. 7 in Unionville, Ontario. His invention of the MerryGro greenhouse (a small plastic growing tray for starting seeds) helped a great deal in the early days. The business soon developed to include a mail-order seed catalogue and new garden centres sprung up all over Ontario, and eventually in Quebec with the acquisition of W.H. Perron in that province.

Ellen Winger joined Mr. Raab in the early days and was general manager.

I remember Mr. Raab fondly, and dealt with him on many occasions, including in 1979 when Pierre Bourque (later to become Mayor of Montréal) and I convinced him to put in a large rose garden (which he planted himself in late fall 1979, in a very muddy area of the St. Lawrence Islands) at the 1980 Montréal Floralies.

In 1968, Ron Maclean joined the company immediately upon his graduation from The Niagara Parks Commission School of Horticulture and he soon became assistant general manager. On Ellen’s retirement, Ron became general manager and the greatest development of the White Rose chain occurred during the early 80s under his leadership. By the late 80s, Ron was also president and expansion was still on his mind. He wanted to open in Québec and decided the best way to do it was to buy the W.H. Perron stores. There was expansion in Québec, up to eight stores, but in retrospect, I believe that decision to move into La belle province was one of the major bad moves that lead to where the company is now.

In 1993 Ron Maclean and his board (still including Alex Raab, although Alex was more and more withdrawing his activity) took the company public and shares initially were listed at $11.

By 1996, due primarily to incredible competition from the big box stores combined with heavy expenses in Québec, White Rose was no longer reporting earnings, but rather steadily increasing losses.

Ron Maclean stepped down and the company’s board brought in high-flying retail executive (formerly head of Canadian Tire Corp.) Dean Groussman as Ron stayed on in an advisory capacity. Mr. Groussman was strongly criticized for his air-commuting habits (between Toronto and the southern US) and for continuing losses. By late 1998, Mr. Groussman and the entire board resigned, and “turn-around expert” William Aziz was brought in. Fiscal 1998 was the company’s third successive year of losses, specifically $38 million on sales of $210 million compared with a $4.9 million loss on $206 million sales the previous year. The company’s stock was selling for 42 cents per share, up eight cents on the day when Mr. Aziz’s arrival was announced!

The company entered bankruptcy protection on November 27, 1998 soon after Mr. Aziz’s arrival. In February of 1999, he oversaw the closure of ten stores, including all eight in Québec. Two of three distribution centres were also to be closed. The slimming-down resulted in the departure of 119 full-time and 274 part-time employees, but left 128 staff at the head office and a total of 1,960 employees.

June 1999 saw the delisting of the company’s shares on the Toronto Stock Exchange.

In August that year the Board of Directors appointed a new Chairman of the Board--Clare Copeland, and he in turn appointed a new President and Chief Operating Officer in the person of Howard Board, a former executive of Peoples Jewellers where, for four years, he helped the famous jewellery retailer battle through bankruptcy protection.

Under Mr. Board’s guidance, the company carried out a series of cost reduction programmes including streamlining its distribution operations, reduction of inventories, renegotiations of lease agreements, outsourcing of non-core businesses and reduction of payroll expenditures. In 2000-2001 the chain changed its name to White Rose Home and Garden Centres (a move seen by some--including me--as negative since it left out the word “nursery” which conveys to the public the actual ‘buy from a grower’ concept). It was an attempt to move up a notch or so in the marketplace replacing many of the craft items with items for home decorating. It also launched nine spring garden centres in mall parking lots.

The most significant change was the redesign of two test stores (Erin Mills in Mississauga, and London West), with the idea of eventually converting all of the “tired looking” stores to the new model. The company apparently considered several new ideas including a management buyout and branching out into wholesaling but the key remained searching for about $10 million in new funds in order to speed up the snail-pace remodelling process.

In late July 2001, an additional store was closed.

Unfortunately, the lack of cooperation from spring weather and the inability to bring in needed funds led to the second bankruptcy filing for the company on June 20, 2002. PricewaterhouseCoopers was named the Receiver, and on August 2nd, the Receiver announced that two sales had been made, one was to a new company, White Rose Home and Garden Centres Limited, which would purchase 24 of the company’s retail stores. Seven other stores were to be closed. A second sale was of the nursery farms, still run by 28-year employee, Dan Galea, to a different buyer.

The buyer of the retail stores (24 of them) was Iqbal Kassam, financier and Vancouver resident with whom I have met and discussed the realities of trying to run a money-making retail nursery/garden centre chain. Iqbal tried everything he could devise to turn the sinking company around, much as he had done previously for the ailing Stevenson’s Rent-all chain, now highly profitable and known as Stephenson’s Rental Services.

Fern Reeves, a 30-year veteran of the garden centre industry, originally headed up the operations side of the new White Rose, and then many months later, Iqbal hired Tim Lagace, ex of Weall & Cullen Garden Centres Ltd. as the Chief Operating Officer.

In February 2004 White Rose closed another nine stores, bringing the total down from 42 to just 15, but Iqbal was not able to solve the dilemma of how to cover the high cost of a head office staff for four months when there was literally no money coming in. In our discussion, he said he was aware that the industry generally relied on heavy sales in late April and May, and possibly in early June to offset the cost build-up of the late winter months. He added, though, that in 2003, the very wet and cold spring, especially on weekends, cut severely into April and May sales and he never did cover those costs.

And so that brings us up to the present: on January 19 the company decided to go into receivership, and on March 19 it was announced that the firm of Shiner Kideckel Sweig would be the trustees in bankruptcy for White Rose. Tim Lagace is now gone from the company, but most other employees remain, including some long-time ones such as Jim Webb, a major buyer who was in China at the time of the March 19 announcement.

I have talked with both Alan Shiner and Murray Kideckel and they are both looking for possible individuals/companies who may be interested in buying the company out of bankruptcy; as well as at breaking the company up. Meanwhile, at the 13 stores it will be business as usual with new merchandise and plants as ordered in the past months coming in and offered for sale to the public. Alan Shiner expects their work as Receivers will go on at least until June.

No doubt other retailers may well be affected by this, in that White Rose stores will likely be selling this spring’s plants and merchandise at less than regular prices, thus undercutting the trade in it its short, peak selling season.

Ave Atque Vale; Hail and Farewell, White Rose!