Ask the Legends: Christine Magee

Sleep Country Canada's co-founder answers reader questions about her legendary entrepreneurial career

Written by ProfitGuide

President and co-founder
Sleep Country Canada

Career highlights:

  • Graduates from the Richard Ivey School of Business with an honours BA in business administration in 1982
  • In 1985, becomes a senior manager of corporate and commercial lending at National Bank of Canada, where she meets future partners Gordon Lownds and Stephen Gunn
  • In 1994, the partners launch the first four Sleep Country Canada stores, all of them in the Vancouver area
  • In 2003, goes public on the TSX as Sleep Country Canada Income Fund
  • Sleep Country is inducted into the Retail Council of Canada’s Hall of Fame in 2005
  • In September 2008, private-equity funds Birch Hill Equity Partners and Westerkirk Capital acquire Sleep Country in a deal valued at $356 million; its annual sales at the time: $357 million
  • In May 2009, Sleep Country had 163 stores in Canada and 46 in the U.S.

How has Sleep Country stayed so competitive against general retailers in your sector, such as Sears?
Orrett Morris

We like to say that we focus on providing great customer service, and it just so happens you get a mattress along the way. We are not trying to be all things to all people. Our focus is to provide an exceptional in-store experience and an exceptional home-delivery experience. Mattresses are an infrequent purchase and a big-ticket item. Consequently, it is one category in which customers do require knowledgeable sales assistance to help them select the mattress that is right for them. Our sales associates educate on the importance of sleep and explain the various choices of mattresses, so we can help every customer find a mattress that is right for them and within their budget. We offer one of the largest selections of mattresses, but we also go further and provide a comprehensive service package of price, comfort guarantees and home delivery. This single-minded focus on our category allows us to execute with every customer, each and every day. If we had expanded to a more general range of products, we wouldn’t have been able to execute as well or as consistently.

What made you go into the mattress business? I’ve heard your background is in banking.
Hala Anderson
Mississauga, Ont.

I came to know my two co-founding partners, Steve Gunn and Gord Lownds, through National Bank. We were involved in the management buyout of Simmons Canada from Simmons U.S. in 1990, and we came to realize the potential of the mattress category in the retail sector, which ultimately led us to start Sleep Country Canada.

To what extent does mass-media marketing drive the growth of Sleep Country?
Jeremy Lichtman, CEO
Lichtman Consulting Inc., Toronto

Research indicates that a typical [mattress buyer] is only in the market for two weeks and may visit only one or two stores before making a decision. So, our media strategy is to blanket a city or region to create a high awareness of the Sleep Country Canada retail brand so that when you are in the market, you are aware of us and want to visit our store. Our electronic-media approach, in which we buy radio at high frequency and reach, is used to drive traffic and create a brand image. But just as powerful as traditional advertising is word-of-mouth marketing. This is branding to me as well: living up to the experience and expectations that our ads promise to our customers.

What was the thinking behind the decision to take Sleep Country private after just a few years of being a publicly traded company?
John Graham

Notwithstanding the looming changes to the Income Trusts Act, the decision to go private was stimulated by an offer made by Birch Hill Equity Partners [the private-equity firm that led the buyout] and their co-investors. The independent board of trustees, after thoughtful consideration, felt it necessary and appropriate to present the offer to the unitholders as fair value, and ultimately it was the unitholders’ decision to accept the offer. And here we are today.

What were the pros and cons of going public?
Emilio Rodriguez

Having practised good governance since our inception, our transition to a public company was relatively seamless. There were, however, additional costs and resources that were required as a public entity due to investor relations, reporting, quarterly calls and the like. As a public company in a highly competitive industry, there was also a need for timely disclosure, such as strategic plans and financial data, that I would rather not have had to share with our competitors. But it was appropriate and necessary as a public company.

What made you decide to be Sleep Country Canada’s advertising pitchman? Would you advise other entrepreneurs to be the face of their company’s marketing efforts?
Steve Hnatiuk

I think it is more credible when someone from the company stands up and talks about the company, as opposed to a faceless company or just a trademark or jingle. I believe it helps personify the company, making it more real and human. But the decision for me to become the spokesperson, as opposed to [co-founders] Steve or Gord, was the fact that our target market is women from 25 to 54, which I still represent — at least, for a few more years. Would I advise other entrepreneurs to be their company’s pitchperson? Not if you like anonymity. But it has proven to be very effective for us.

What’s the most effective tactic you have used to maximize productivity from your sales force?
Graham Casson, President & CEO
OurPLANE Inc., London, Ont.

We have developed a very comprehensive in-house training program conducted by our existing sales associates that develops leadership, credibility and best practices, which I believe maximizes productivity. Our ability to grow is usually not a function of capital constraints, but rather a people issue. When we expand into a new market, we are careful to train and promote some key leadership roles — specifically, in our sales and operations teams — and transfer them to our new regions.

Most Canadian retailers that have tried to expand into the U.S. have failed. Why has Sleep Country succeeded in the U.S., and what key differences have you noticed between retailing here and in the U.S.?
Adam Purcell

We were fully aware of previous attempts by Canadian retailers to expand into the U.S., but we viewed our entry as a low-risk approach. Sleep America, which we purchased in 2005, was developed on our business model and became the dominant player in the Phoenix/Tucson area. Given the success that Sleep America enjoyed, we believe that our approach would work very well in the U.S. context and provide a possible platform for future expansion.

What has been one of your biggest challenges in hiring, retaining or training your retail salespeople, and how have you overcome that challenge?
Stephan St. Pierre
Laval, Que.

In the early days of our business, we did not have the history or reputation that we have today. So, as we expanded and entered new markets, we did not usually receive a large number of applications in response to our job ads. We often had to “troll” retailers in other categories to find good people. Fortunately, as we have expanded, the number and quality of the applicants within existing markets has grown, including a large number of referrals from existing staff members recommending us to their friends. Now, as we enter new markets, we can demonstrate a strong track record that earns us credibility with new hires, and a larger selection of candidates as well.

Small-business owners often need better employee talent, but don’t have the money to pay for it. What are your tips and suggestions?
Nicole McCord, Business Development Manager
Silver Lining Ltd., Toronto

We spend a significant amount of time during the hiring process assessing fit, ability and potential. That lends itself as much to sales as it does to operations, distribution and customer service. Particularly in the startup phase, we really had to find individuals with great potential and attitude, then mould and develop them over time.

What was the early vision for Sleep Country Canada, and how did it change along the way? Which factors influenced that change?
J. Graham

Surprisingly or not, our early vision has proven to be very effective and has remained largely unaltered from the early days of 1994. From our inception, we have tried to keep our business approach simple and focused on three factors: to dominate in the minds of our consumers and maintain a high brand awareness; to provide an exceptional in-store experience; and to provide an exceptional home-delivery experience. Our ability to deliver on these three key variables has allowed us to build and dominate share of market across the country and the regions in which we operate.

Judging from Sleep Country Canada’s success, it seems that you and co-founder Stephen Gunn form an enviable partnership. To what do you attribute the success of your partnership, and can you share some specifics about how you manage it?
Grace Chang
Markham, Ont.

We share the same approach, vision and values for our business. I think integrity, trust and candour are essential ingredients to our growth and success. Over the years, we have developed and built our management team, which effectively runs the various parts of the business and operating units. I have taken on more of the operational roles, people and day-to-day duties, while Steve oversees the mattress manufacturers, media relationships and investor relations.

My students would like to know which subjects you feel are the most important to take in high school in order to be a successful entrepreneur?
Rose Guido, Entrepreneurship Teacher
Michael Power High School, Toronto

I think math and finance are essential, as is a communication class that highlights written, verbal and listening skills. In business, you need to be able to articulate a point of view, present it and defend it. I also think solution-based learning, in which students have to think through obstacles or challenges and propose action plans, would be helpful. At the end of the day, students need to learn how to work with other people; business is almost always dependent on teamwork, so learning teamwork is critical to your success.

How do you find balance between the demands of long work hours and family life without the risk of burnout or, worse yet, marital stress?
Stephen MacVicar
Sydney, N.S.

In the early days, it was quite crazy. I think my ability over the years to juggle the demands of life comes from maintaining perspective. I think children, family and friends have a way of helping us maintain that perspective. I also think exercise and other personal pursuits, such as reading, arts and music, are essential. It’s sometimes very hard to make time for me, but when I do, I am usually so much better at what I need to do next. I have come to believe that balance is getting comfortable with the idea that I am always going to be a little uncomfortable.

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