The Entrepreneur Podcast
The Entrepreneur Podcast

Episode · 3 months ago

Legends with Bob Nourse of The Bombay Company

ABOUT THIS EPISODE

“Those who can’t do, teach.” If you enjoy dispelling popular myths, this episode is for you.

MBA ’64 Bob Nourse was in his element when teaching in the classroom. After completing his doctorate at Harvard, Nourse began a nine-year teaching career at Ivey. But in 1976 that world was upended when a private equity firm came knocking for his expertise to turn around some struggling companies. From airlines and soft drinks to building water slides, Nourse eventually found a New Orleans-based mail-order business called the Bombay Company, which he grew to over 400 stores across Canada and United States. In 1993, Nourse was voted Entrepreneur of the Year by Inc. Magazine, which called Bombay, “America's hottest company.”

In this episode, Nourse shares his entrepreneurial story, including the ups and downs of the company he took from obscurity to the New York Stock Exchange.

You are listening to the entrepreneur podcast from Western Universities Morissett Institute for entrepreneurship, powered by Ivy. In this series, join me, Eric Morse, as we uncover the stories of our entrepreneurial legends. These western founders have revolutionized industries, built recognizable brands and added richness to lives across Canada and beyond. Discover their origins, their greatest moments, their deepest challenges and what makes each of them tick. Welcome to the legend series. Those who can't do teach. If you enjoy dispelling popular myths, then this episode is for you. Mba Sixty four, Bob Norris was in his element when teaching in the classroom. After completing his doctor at Harvard, Norris began a nine year teaching career at the Ivy Business School. But in one thousand nine hundred and seventy six that world was appended when a private equity firm came knocking for his expertise to turn around some struggling companies, from airlines and soft drinks to building water slides. Norris eventually found his diamond in the rough in a little New Orleans based mail order business called the Bombay Company. The rest, as they say, is history. Bob, thanks so much for joining us today. We're really fortunate to have Bob Norris with us as our guests on the legends podcast, and Bob Somebody I've gotten to know or around the university. So when I first moved to Ivy, Bob was coming back and teaching a class and entrepreneurial growth and it was great to get to know him kind of over time and know his story and I'm really pleased to have this chance to let other people know Bob Story and hear some of this. So, Bob, thanks so much for being with us. Job. So, when you were growing up, was entrepreneur something that was on your radar? Had you ever thought of this kind of a career path? Heck No. Hey, yeah, I was raised as an Army Brat and a military family. We talked a lot about things around the dinner table, but never about starting and growing businesses. Okay, kind of a poster boy for people who don't start out thinking about being an entrepreneur but through their experiences in life and up becoming one. Okay, well, fantastic, and you kind of came to entrepreneurship a little bit later in life I did. Yeah, so you had actually gone through university and came to Ivy as a faculty member here in the Marketing Department. Right, right, I was really thirty eight before I got into a private company and ended up running some high growth companies. I guess before that I was on the board of that company, but really I was in my late s before I really got going. It's really interesting. So tell me about your teaching you know, what was it that led you to teaching to begin with and what did you kind of take away from that, maybe when you got into...

...the private sector? Well, I got into teaching probably, like a lot of people, under the influence of some very persuasive professors, Clayton and marketing and Andy Grindley, who taught quantitative subjects. They both kind of took me under their wing and encourage me and I took a look at the life that they were leading. I'd actually had teaching experience before. I talked about electrical engineering for a year at Royal Military College. I knew I like teaching and it just seemed like a good thing to do. Hate that decision really at the end of the NBA program and going to Harvard for a doctor at or going anywhere for a doctor that matter. was just a matter of getting a union pass what you needed to teach on a career basis. Right. Hey, I just found something. I didn't know. You were a recovering engineer like myself. I am. I'm an electrical engineer. I wouldn't want to do much more than plug in the socket right now. It's been too long for me as well. I totally agree with you. Okay, so you've left Academian and in one thousand nine hundred and seventy nine you bought the rights to the Bombay Company. Can you give me a little bit of the history? How did that come about and what what was the thinking there? Well, you really have to back up a little bit. Eric, to one thousand nine hundred and seventy six, I had been on the board as an outside director of a company called venture tack. It was a private Equity Company and at that time it was controlling about two hundred million dollars in venture assets over eight or nine companies and two founders, one of whom was a friend of mine. We're really finding themselves pretty stretched, and so they showed up in my office at Ivy one day and basically offered me a job. I would come in as a vice president and and oversee two or three of the companies. I got three, in fact, but of course I didn't get the cream of the crop because I was the third guy in. About three months after joining the venture tech I was overseeing an Arctic airline. Okay, the numbers didn't look quite right and we sent in Cooper's and library and to do an audit and what we found is that in fact they were hiding. We found a couple hundred thousand dollars of full expenses in the back door of the CFO and so forth, and I had to go in and and fire the top four people and of course they looked at me and said, well, who's going to run this and I said, well, I'll run it till we get someone but I ended up running an Arctic airline for a year and a half. Wow, well, that's an education. Yeah, that was a real education and and really for my time and venture tech. What I found was that that I ended up doing a lot of that kind of...

...thing. I was in the soft drink business, I was in a geophysical mapping and I built water slides in I was in these banks, to French banks, a big government agency called Canada Development Corporation, and really my incandives were there, but they weren't very big and I learned a lot in that time about how to grow businesses. Yeah, I started looking it really in late one thousand nine hundred and seventy eight, for something I might do on my own a year to find it. Okay. So the entrepreneurial bug was kind of bitch you at that point as you were running something and not only bet me at swallowed me. Well, you found a really interesting one because you jumped and you did it with your partner. Yeah, I did, I did. I'd known Alex, my wife, for quite a long time and she actually was living in Amsterdam and I was in Toronto when I made the decision. But a few months after we got started she moved out to Toronto and while we never intended to work together, our skills are very complementary and it worked out perfectly and we did it for seventeen, sixteen, seventeen years. Well, that's that's that's amazing. And so you bought the rights to the Bombay Company, which I think was mostly mail order and mostly in the estates at the time, and that's right. Who opened up, and certainly the first bricks and mortar in Canada, maybe anywhere, I don't recall. Yeah, what happened basically was a classmate of mine at Ivy had invested in the mail order business out of New Orleans, okay, and I had had dinner with him one time and in Bermuda and he told me about this. He said you ought to go see this guy. So I went into New Orleans a couple of times, the left of which was a long liquid lunch at Allison New Orleans. But elesven hours, I think, the back of a Napkin, we signed an agreement where I got the Canadian rights to Bombay Company for a dollar. Promised to hire his mother if we opened a store. His mother was living in in Toronto America. Hired her, Bonnie was her name, and she was a great salesperson. Could keep track of the invoices, but she did a great job, and so that's how I got basically ended up with the rights. And yes, there was by that time one store in suburban New Orleans, Uptown Square, but it was nothing like the kind of store that we opened, which was in Eaton Center store in April of nineteen eighty. April nineteen eighty in the Eaton Center and that was a bit of an ordeal and it. Can you take me through what...

...it was like signing that lease and getting something going in Eaton Center? Well, you know, sometimes you're just lucky. I walked they at that time had just completed the south wing of the Eaton Center, the one the South Wing, and basically there were one or two spots left, that was all. And I walked in hey to a fellow named Ernie booth. Ernie was the vice president leasing for Cadillac Fair Go. I walked in this office and sort of said, I'm Bob Norrison, I'd like a store. Well, I know that if you if you do that today, I knew then to you don't get anywhere. I mean. But Ernie both happened actually to have a soft spot and he wanted somewhere in Eaton Center to say that he was nurturing a startup of some kind. And great gave us a store, okay, and he not only gave us a store but he did not put the blocks to us on the lease. I later got to know the people of Radio Shack and we actually had a better leas than radio shack wow, which was kind of interesting because he really when you're kind of green in the guilds like that, a landlord can absolutely tie you up in knots, and he didn't do that at all. And so we we were able to open that store and it took off right away. If we had problems, it was there was too much volume. And so the store takes off right away. I remember you telling me a little bit about it. was kind of the stuff on the walls that started people in. How did that happen? Well, that was almost an accident. Initially we had a woman named Bruce Pelli doing some accessorizing for us because she knew all the contacts locally, and we put a few frame pieces of just framed prints around the store to give it the the, if you like, the look of a home. And one day ruse belly came in and she took all of those prints and put them on one wall. All of a sudden they were masked. There was a critical mass there and they just started selling like hot cakes. But later on, when we had a lot of stores, prints and Mirrors, which we called Wal decret, we're making up almost twenty percent of our sales and we were selling a million pieces of a year. Wow, that's amazing. Just tells you there. It was right under our nose and almost by accident. What we learned? Something about making a statement to your customer about what kind of a business you're in. Yeah, got the message. We were in that business. Yeah, and you were flexible enough and obvious looking for learning.

You know often enough that you were able to capitalize on it. So, but that kind of starts the growth. I mean you've got a store in the Eaton Center, which has got to be the best commercial space in all of Canada at the time, and and your things are really going fast. As you said, the problem maybe that you have too much volume. So now you decide you're going to start opening new stores that you know that may be the biggest risk, right. Can you take me through when you decided to grow and make this? Well, Nice thing about having a store in the eaton center was that everybody, all the other developers, sawed so more or less over the next year or so we had kind of people dropping in from sherwy gardens, from OAKVILLE, from Bay View village, big locations in Toronto, our problem at that point was capital, and that day in the age, you even needed money to open a letter of credit and you had to open letters to credit to buy merchandise overseas. Right or time. That went away, but that was it for now. It came out of your bank line. Meanwhile, in the US, I have to back up a minute here. The US operator in running the mail order business never made money. Okay, he ended up selling out to a shell company on the American Stock Exchange called Tandy. Brands with you with a lot of cash and not much businesses to make it run, and they invested in our company sooner than I would have liked, to be honest. But let us with enough in said of that, here I am living in Sounta Barbara, California. Well done, and with their money we were able to open a group of, I think, five or six stores in Babil village, was the next Sherwick Gardens, Scarborough town center. There was a street store in OAKVILLE. We hadn't been able to work a deal with the landlord and we did very well with that. And over a period from then to one thousand nine hundred and eighty three, late eighty white late eighty three. We had twelve stores. Well, we rolled out. We did not short of spread them all over the place. So they were in Toronto, then in Ottawa, then there was one in Kingston, and and only toward the end, and we did we open a two or three stores in western Canada, and that that's only helped them. Sure, with distribution and yes, well, and supervision and everything else. It's a must take that a lot of entrepreneurs make, you know, is to spread themselves over too much geography and they don't roll out their business in a way that makes them contro let some control our costs. So your you're spread across Canada this point and things are going really well. But now we're really headed for huge grow of so take me through.

How do we go from that? Hundred stores or four hundred plus stores across North America? Well, in late one thousand nine hundred and eighty three, the people who had bought the mail or to business in tront in the US, had started opening stores and they weren't doing a very good job of it. Okay, we had a dozen stores and every one of them was making money, good money, and we kind of knew, Alex and I, that that we were probably going to hear from them one of these days, but we pretty well decided that. Well, they're in Fort Worth Texas and we live in Drawdo. We would never move to Fort Worth Texas. And all that's words girls. Hell. Yeah, the phone call comes in December. They've had a lousy Christmas season and they asked if they could come up to Toronto and talk with us. And and suddenly, you know, we realize there's this big US market waiting to be had and we thought we knew how to do it and the idea that it would go to someone else was just a killer. By by the first week of January we were on our we had a guy who could take over the Canadian operation under our wing and we both moved to Fort Worth Texas and the first thing I did was close about a dozen stores. Oh, open and and the first year there we only open three stores. Okay, but we got the model right and we fixed the the problems they had with inventory and with the stores that they had opened that were in the wrong places, in the wrong setup. Sure, so you've got tendy now is a very approximate partner, I guess. As you start to expand in the US and things start to hit a pace in terms of growth. Yeah, Eric, and it was actually tandy brands, which wasn't the Radio Shack tendy. Oh, okay, sorry, make that clear. It was a of a separate company, rather sleepy on the American Stock Exchange, but traded every third Wednesday, I think. Okay. But after the first store we opened twelve the next year, we opened thirty five the next year and and we were on a roll. And and every time we learn more and more. But how to open a store and how to open multiple stores, and we eventually reached a point where, counting some conversions, we were doing the larger stores. We had two years in a row where we opened a hundred stores. Wow, it's by the way. It was too many. Yeah, so every every third day there's a new store. That's that's kind of starbucks level growth. What does that do to the business? It does two things. It makes we're public company by that point in time on the New York Stock Exchange and it makes the stock market very excited. But it does so. We were carrying a fifty pe multiple,...

I think, for at least almost a year and and that's very hard to live up to. We were not really a tech company, we were a retail company, and that's one thing. The big problem it creates is for the people that are working for you. Retail is people intensive, hiring people at a great rate, and you almost reach the point even though you put in training programs and everything else, you can't move quickly enough and you fuck. The person you hired yesterday is telling the person you hired today how the company runs, with what to do, and that person, of course, doesn't really know. That's hard on culture, isn't it? Yeah, it's very hard on culture and and we grew too fast, very simply. All right. Well, before we get to that, I'm going to say nine three d ninety four was kind of the year about norse. Yeah, had four hundred stores. You were entrepreneur of the year. You know, lots of lots to live up to in terms of growth and everything else. That has has to be just a little bit more pressure, I would assume. I don't know if you feel pressure. It's not ultimately a good thing. You know, everybody thinks you can do no wrong and, quite crazy, most of the time it seems like you can. Everything you're touching is turning to gold. Right, but everybody's praising you and nobody's really talking to you, other than, in my case, my wife, realistically about what's happening. And it is a it's a great right, there's no question about it. You're being asked by all of the big brokerage houses not only to attend their conferences and speak, but to go with them to Europe and meet with their major clients and all sorts of bells and whissels, and it's hard. It really puffs your ego and and you really shouldn't let it do that. Well, I think it's hard. I ink said you were running America's hottest company at one point in time. I said, yeah, they did. And you know, it's funny. By by, I know you've done some work with entrepreneurs here in Canada and high growth companies and one of the things I always laugh out when you tell them is, hey, if you ever reach a multiple of fifty, time to sell. Yeah, yeah, I'm well for that. Big about take some money off the table on the way, whether it's fifty or not. You know when that, when the times are so good, aren't going to last that way forever. They may not turn bad, but they're not going to be that good forever and ultimately, as all things do, it did turn down, go down the other direction and and you parted ways with the company. When you look back, what were some of the you know, it was a successful Rundom, matter how...

...you look at it. Built an amazing business, great culture, great really merchandising that that hadn't been seen before you. You really did a lot of the industry. There's some of the major lessons maybe, that you took away from from that whole ride, you know, up as high and even down down some of the lows. We certainly learned the importance of a business model. I mean, perhaps because of my ivy background and teaching and everything else, from the very beginning I kind of knew what our formula was for making money, for the key drivers were and what expenses most needed to be controlled and what you had to build into fixed commitments like leases. And time and again, in working with other entrepreneurs or doing other things myself, what I've seen is that a lot of people don't have a clear idea of their business model. It's a fuzzy idea and it doesn't really nail what drives avenue and what drives control of your expenses, and so it's to be sure, business models need to be tweaked as you grow and as circumstances change, but you have to know what your model is in the first place in order to tweak it. In throughout history, even in some very big instances, there have been people who demonstrate they don't do that. That's one of the most important things. If you don't know where what you're as revenue, how do you leverage you know and move forward? And some of the other things I think I probably talked about just because they keep surfacing for me. You know, don't outgrow the ability of your people to grow. That's not I'm not the only person who's done that, and we didn't do it disastrously so, but it was we certainly did it. Bury your ego. You know, when you're successful, everybody tells you how good you're right and you're not really that. But and and take some money off the table on the way up. You'll be glad you did. We took some off. We didn't take as much, with hindsight as I would have liked, but there again it was enough to live a comfortable life and do a lot of other things in life. Great Advice, Bob, and I think tried and true. You know, coming through a pandemic. You've been through some tough times as well and economic cycles while you were running Bombay Company. Anything that you would share with entrepreneurs that are struggling right now to come out of the pandemic and in a positive way? Yeah, you really just have to stick at it. When I mean we've had I can talk about a couple of them if you like. We points along the way where it wasn't clear we were going to make it or not make it. We had points in the early days where we didn't know if we were going to make a payroll next week. Right from three or four days noticed we had to organize as a warehouse sale to generate...

...some cash to make the payroll later on. We had, of course, in our early years use an agent to source for us and Asia, primarily in Taiwan in the beginning. But you reach a point where that's no longer cost effective, where you pay him a percentage but you could operate your own office much cheaper, and those transitions are classics in Asia. They usually go wrong and and are certainly was difficult to made that transition. All of a sudden the agent just dropped US immediately and we had to put a team of people on a plane to Taiwan and set up a sourcing office in an environment that we really didn't know all that well right now. Both of those are circumstances where you just do what you got to do and if you're passionate about your business, you will probably work harder and longer than you ever thought you could. But it takes you don't get over those hurdles without that kind of an effort, and I think that that I don't know many businesses that have succeeded that having confronted situations like that. The private equity company I work for, Venture Tech, before I had ever worked there, they'd invested in a Lacrosse factory down in Cornwall and they ended up with something like twenty Lacrosse factory workers all carrying lacrosse sticks in their office. Yikes. You know, a threatening all sorts of things. So you just you just have to dig right in and do and you probably will. But if you haven't got the metal, if you like to be an entrepreneur, then you probably back down or look for an easier solution. And it never works. I think that's such great advice for our aspiring entrepreneurs is that, you know, find something you're passionate about, because things are going to go bad and you're going to have to really dig deep to get through those times and try and that's yeah, let's see what what? One thing I'm going to make it really narrow it down. Well, one thing you wish you would have learned in school, perhaps that that would have helped you in your entrepreneural career, that you had to kind of learn the hard way. Well, let me think about that. The thing I learned the hard way was the value of experience. Interesting, I came out of university into private equity bit just because of the the things you learn at Ivy and the way you approach things. I knew how to define problems, I knew how to structure solutions for them. conceptually, I could handle any problem. Yeah, but I was working in private equity with people who work very quickly. You know. They could see problems,...

...move on them and act more quickly than I can just because they had a reservoir of experience that I didn't have. It the other side that you really have to get the conceptual thing in its own right is important and it served me well, because not a lot of people get that the way I got it by teaching. HMM. Same time, I really I made some mistakes coming out. Maybe other people wouldn't have made those mistakes, I don't know, but I bought a company to too easily, without enough diligence and research, and I sort of looked at what we were being told like a case study. You know, right, sure, but the problem is real world case studies don't always tell you the whole story, particularly trying to sell you something. Yeah, well, you know that's interesting. So if you were, you know, to put your teaching hat back on, what? What, maybe, could we be teaching our students better than we are today? Yeah, I don't know that one very well, Eric. I thought about I knew you might ask that question and I don't know awfully well what you're teaching. What I do know is that, you know, your quantum shift program works with real entrepreneurs. Yeah, people who are aspiring to be it right, tell that thing out. Plus plus every the waiting list every year. So you must be doing a lot of things right. Well, thanks, funk. That's very important. I think that. That's that's as good as I can judge that really, but I think you're probably doing a pretty good job. And Bear in mind that when I went through the NBA program there were no courses in entrepreneurship, no program no institute, none of these things, and so I almost had to wait quite a long time before I got exposed and sensitive to some of those things. Yeah, I do feel that sometimes people who aspire to be entrepreneurs are having trouble finding an idea. Sure, and you don't find an idea in a white walled room, you know, sitting there and staring. Yeah, and what I would say to them is don't be discouraged, but probably you might want to consider getting some experience in an industry or a sector of an industry somewhere. HMM, learn how that industry works, what are the important variables, what are the unimportant things and where there are opportunities to make the industry better. Yeah, and that will make you a lot make it a lot easier for you, not...

...only to find an idea but to develop an idea more successfully. So if you haven't got an idea and have to go to work for a few years somewhere else, with that in the back of your mind all the time. That's not such a bad thing. It's then starting out with some idea that you've just sort of dreamt up at night and and really hasn't got very big potential. Entrepreneurs should be looking for businesses that have decent potential. Yeah, not know, not local laundry services. Yeah, now, I agree with you. You know, how do we change the world in a way for the better? Right, and we should be thinking at that level. You know, Bob, my time here at I's been wonderful and one of the things that that I do cherish is having the opportunity to to watch you teach and to learn from you over the years. The way you teach business model, if you kind of did in this session a little better, you touched on it, was really great. I loved sitting through watching you teach that to, you know, successful entrepreneurs and having all of them go, wait a minute, do I really know what my lovers are? And boy, it really made me think about how do I present that to others and a better job of helping entrepreneurs. But that's had a great impact on me. And last question for you was, you know, was there something while you were at Ivy as a faculty member, when you your first time, when you came back even that, that you remember and will take with you well, I think, despite the fact that that I had a wonderful time initially there in the marketing group when I first taught there, and and teaching elsewhere as well, I think my fondest moments are those that happened when I came back. I had done sixteen years at Bombay, when I been involved in some other startups, both myself and as an investor. Then I could go into a classroom and know in my heart what I thought was important it and and and be able to teach that and teach with confidence that I was teaching the right thing sure, and find ways to express it. I will say, by the way, that when I went back to teaching, I came to understand in some ways that I never had before why I had done some of the things I did when I was actually in an entrepreneur okay, each you learn a lot from teaching. They about your students, but about yourself. That whole experience for me, and I think it was eleven or twelve years in total, counting quantum shift, hum was a very rewarding experience for me because I was kind of giving back, but at the same time I...

...was by training a teacher. You know, and and I sometimes think that it would, it's harder for businessmen to come into teaching than for teachers to go into business. Teaching is a skill set and it's a and and you really have to work at that. Well, Bob, thanks, thanks so much for today. I know there's several decades worth of students out there, and certainly those that I got to know when you came back that that benefit and tremendously from from your teaching and from your experience. As you mentioned, that's so hard to come by. So thanks so much for that and thanks for today. I was great. Tis So nice to see you again. Nice to see you too, Bob. I hope will have a chance to person in the near future. Okay, then there are take care and thank you very much. Thank you very much, Bob. The entrepreneur podcast is sponsored by quantum shift, two thousand and eight alum, Connie CLARICI, and closing the gap healthcare group. To ensure you never miss an episode, subscribe to the show on your favorite podcast player or visit entrepreneurship, Dot uwo Dot c a podcast. Thank you so much for listening. Until next time,.

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