Imagine, imagine if you can see a man standing
on top of just a massive mountain of merchandise.
Like a literal mountain. Pretty much, yeah. We're
talking tinned corn mismatched socks. maybe some
porcelain figurines, and it is all piled high
on these flimsy orange crates. Oh, wow. And he
is screaming himself hoarse. He's practically
vibrating with energy, is shouting about a bargain
that you literally cannot afford to miss. It
sounds chaotic, like a carnival barker having
a full -on breakdown. Exactly. It's loud, and
frankly, it looks a little desperate. But now,
cut to a totally different scene. OK. That same
man, but now he's in a tuxedo. Quite the wardrobe
change. Right. He is sipping champagne with British
royalty. He's shaking hands with the most elite
actors in the world. And he has just single -handedly
saved one of the most historic theaters in the
Western Hemisphere from a wrecking ball. See,
that sounds like two completely different movies
just spliced together by accident. I mean, usually
in business history you get this scrappy, ruthless
discount or you get the refined, benevolent patron
of the arts. Yeah, you don't get both. You rarely
get them in the same lifetime and you almost
never get them in the exact same body. But that
is exactly the paradox we are unpacking today.
We're doing a deep dive into the life, the business
philosophy and the just sheer audacity of Ed
Mervish. It is a wild ride. It really is. Now,
if you are from Toronto, You know the name Honest
Ed. You know that massive sign with the blinking
lights that looked like Las Vegas got lost in
a Canadian blizzard? The aesthetic was definitely
unique. But if you're coming to this fresh, you
are in for a treat. Because the source material
we're looking at today is this incredible biographical
record of his life. And I think we should be
clear right up front for everyone listening,
this Deep Dives isn't just a biography. Right.
We have a stack of biographical records here,
sure. But what we're really looking at is a case
study in business adaptability. Yes. It's about
how a concept called the loss leader, combined
with this P .K. Barnum level showmanship, didn't
just sell cheap socks. It did way more than that.
It actually revitalized entire city blocks and
saved the theater industry in two different countries.
We really do have a lot of ground to cover. The
sources paint a picture of a man whose stunts
were, frankly, hilarious. I mean, truly laugh
out loud funny. But under all that humor, there
was this unintentional genius at play. That is
the key word for me today, unintentional. Yeah.
Because a lot of what Mervish did just to survive
or to make a quick buck to feed his family ended
up being master classes in urban planning and
vertical integration. He was playing 4D chess.
He was. He was playing 4D chess while everyone
else was playing checkers, even if he didn't
actually realize it at the time. So let's rewind
the tape. Where does a character like this even
spawn? because he feels like he walks straight
out of a Dickens novel. But he was actually born
in Colonial Beach, Virginia in 1914. Right. He
starts life as Yehuda Mervish. His parents were
Jewish immigrants from Lithuania and Austria.
Classic immigrant story. Exactly. And right away
you have this narrative of assimilation. His
cousin actually pressured the parents to give
him a more American name because Yehuda sounded
too old world. So Yehuda became Edwin. But there's
one specific anecdote from his birth, or rather
shortly after, that Mervish himself always pointed
to as his destiny. It is in every biography of
him for a very good reason. Oh, the circumcision
story? Yes, the bris. It's incredible. So Colonial
Beach is this tiny town. There's no mohel that's
the person qualified to perform the circumcision
ceremony. Right. So the family's in a bind. They
have to import one from Washington, DC. They
bring in this guy, Rabbi Moshe Rubin Yolson.
And for the entertainment history buffs listening
or anyone who knows the Golden Age of Hollywood,
that last name Yolson, is the smoking gun. Exactly.
Rabbi Ilson was the father of Al Jolson. The
jazz singer. Yes. One of the biggest, most famous
entertainers of the entire 20th century. And
Mervish loved to tell people that story. He'd
say that because Al Jolson's dad performed his
bridge. That was his literal physical introduction
to show business. A very painful introduction
to be sure, but it really set the tone. It's
almost like the universe tagged him for the stage
right from the cradle. It really is. But before
the stage came the struggle. And honestly, Struggle
is putting it lightly. The family moves to Toronto
in 1923 after his father's grocery store in DC
goes completely belly up. And the records from
this period, it's grim. They moved to Dundas
Street, west in Toronto. His father is trying
absolutely everything to make ends meet. He's
selling Fuller brushes door to door. He's selling
the encyclopedia Freemasonry, which is a niche
market, if I've ever heard of one, before finally
scraping together enough capital for another
grocery store. And we have to talk about the
living situation. They are living above the store,
which is classic for the time, but they aren't
alone up there. No, not at all. They're sharing
this tiny apartment with a Hebrew school. It
really grounds you in the level of poverty they
were dealing with. Mervish joked later in life,
and he always used humor to deflect the pain
that his biggest childhood dream wasn't fame
or fortune. That wasn't a fancy car. No, it was
just to have a bathroom he didn't have to share
with 50 other people. Just basic dignity. And
that level of deprivation, it builds a certain
kind of grit. You learn to value every single
penny. And he needed that grit because tragedy
struck when he was just 15. His father died.
Yeah, and Ed had to drop out of school instantly.
He became the sole support for his mother, his
sister Lorraine, and his brother Robert. Just
a kid himself. Side note here, his brother Robert
actually went on to become a very successful
novelist later on. Oh, wow. I didn't know that.
Yeah. But for Ed, the creative writing had to
wait. He was in cure survival mode. He tries
to keep the grocery store afloat. but it fails.
So he pivots, and this is where we see the very
first flash of that Honest Ed attitude, that
total refusal to be pushed around. The dry cleaning
business. Right. He partners with a childhood
friend named Yale Simpson, and they open a dry
cleaning business. Which they naturally named
Simpsons. Now we really need to pause on the
context here for you listeners who might not
be Canadian. In Toronto at that time, Simpsons
wasn't just a name. It was the name. It was a
massive department store. Think of the equivalent
of Macy's in New York or Harrods in London. Exactly.
It was a retail giant. Yeah. So naturally, the
corporate lawyers from the big department store,
Simpsons, get wind of this tiny little dry cleaner
using their name. Oh, boy. They descend on him.
They demand he change the name immediately. They
threaten to sue him into oblivion. And most 19
year olds would fold immediately. I know I would
have folded. But Ed. He brings out his partner,
Yale Simpson, introduces him to the corporate
suits, and says the famous line, Here's my Mr.
Simpson. Where's yours? It is such a brilliant
deflection. It really is. Yeah. He knew he was
technically right. It was his partner's actual
real name, and he just refused to be bullied
by the big guys. That anti -corporate, scrappy
identity was forming right there in that room.
He eventually did settle and change the name,
but the moral victor was completely his. He eventually
left dry cleaning and found some stability working
as a produce manager for another entrepreneur,
Leon Weinstein. But the itch was there. He wanted
his own kingdom. Which brings us to 1948. The
year everything changed. He's married to Anne
Macklin now, who by the way was a jazz singer
and a sculptor, which is a fascinating match
for a grocer. A very creative household. And
they decide to take the plunge, but they have
no money. No bank is going to loan them what
they need. So in a move that would give any modern
financial advisor an absolute heart attack, Ed
cashes in his wife's insurance policy. It's the
classic burn the boats moment. Exactly. There
is zero safety net. He takes that cash and opens
a store. But Honest Ed's wasn't just a store.
It was an assault on the census. The aesthetic
was let's call it early chaos. Early chaos is
very polite. It was aggressive. The merchandise
was displayed on those orange crates we mentioned,
not shelves. There was no credit, no delivery,
no returns, no service. He bought odd lots from
bankruptcy sale, fire sale stuff that basically
fell off the back of a truck, metaphorically
speaking. But this is where the pure business
genius kicks in. He claims to have invented or
at least perfected the concept of the loss leader.
Now, in retail, we know what this is today. Costco
does it with their $1 .50 hot dogs. But break
down why this was revolutionary for him back
in 1948. So a loss leader is a product sold at
a price lower than its market cost, sometimes
even lower than what you paid for it, specifically
to stimulate other sales of more profitable goods.
You lose money on the socks to make money on
the shirt. Exactly. Yeah. But Ed took it to the
extreme. He wasn't just discounting slightly.
He was selling tinned corn or unmatched socks
for literally pennies. He was practically giving
them away. And why? because it created an absolute
frenzy. It stopped being shopping and started
being looting. It turned the whole experience
into a competitive sport. It did. And the Orange
Crates played right into that. They weren't just
about saving money on shelving. They were psychological.
Oh, that makes sense. They signaled to the customer,
I am not spending money on fancy decor so I can
pass the savings directly to you. It made the
customer feel smart. It made them feel like they
were beating the system. And once they were inside
navigating that crazy maze of crates, which was
intentionally confusing by the way the treasure
hunt dopamine hit kicked in. They'd come for
the five cent socks and leave with a lamp, a
rug and a whole set of dishes they didn't even
know they needed. And it worked like gangbusters.
The store just exploded. It eventually swallowed
up an entire city block from Bathurst Street
to Markham Street. He billed it as the world's
biggest discount department store. But as he
expanded, he ran into a wall. Literally and bureaucratically.
Right, the Markham Street houses. He started
buying up the Victorian houses on the next street
over. The plan was standard developer logic.
Tear down the old houses, build a massive parking
lot for the customers. Cure efficiency. You need
parking for all those thousands of people buying
cheap turkeys. But the City of Toronto said no.
They straight up rejected the demolition permit.
So now Ed is stuck with a row of old Edwardian
houses he can't knock down. And this is where
the unintentional urban planner comes in. Most
developers at the time would have just let the
buildings rot out of spite or burned down for
insurance. But Ed listened to his wife, Anne.
Yes. She suggested renting them out cheaply to
artists. Because artists don't mind old plumbing
if the natural light is good and the rent is
dirt low. Precisely. And because the rent was
so low, artists swocked there. galleries opened,
studios, boutiques. It became Mervish Village.
It's incredible. He accidentally created one
of the coolest, most vibrant cultural hubs in
the entire city just because he failed to build
a parking lot. It is a perfect example of constraints
breeding creativity. He couldn't do the boring
thing, so he did the interesting thing. But while
Mervish Village was this quiet artistic side,
the main store, Honest Eds was becoming a full
blown circus. We have to talk about the stunts.
We really do. This man understood the attention
economy decades before the internet existed.
He knew that if you're selling discount goods,
you can't be dignified. You have to be loud.
You have to be unavoidable. You rode elephants
in downtown Toronto. He did. He brought in literal
elephants for parades. But that is just the tip
of the iceberg. The source material is full of
these. My favorite story, the one that really
shows his manipulative genius in a good way,
is the dress code protest. Oh, this is pure gold.
So later in his career, he opens a restaurant,
and he decides to enforce a strict dress code.
Jackets for men, no jeans, that sort of thing.
Which seems completely off -brand for the guy
selling socks on orange crates. It totally was.
And people complained. the media started grumbling
about it. So seeing an opportunity, Ed hires
people to pick at his own restaurant. Wait, let's
make sure you catch that. He paid protesters
to stand outside his own business with signs
yelling at him. Yes. They had signs saying, down
with the dress code and unfair to eaters. He
completely manufactured the controversy. That
is brilliant. Because suddenly everyone was talking
about the restaurant, it made the place seem
exclusive, important, and worth fighting about.
That is 4D chess right there. He's controlling
his own opposition. And then of course there
were the turkeys. The turkey giveaway? This became
absolute folklore in Toronto. Every Christmas
he would give away 10 ,000 pounds of free turkeys.
People would line up for blocks. I mean, people
camped out overnight in the freezing Canadian
winter. And it lasted until 2015. It wasn't just
marketing. It became a genuine part of the city's
holiday rhythm. Yeah. It was a tangible way of
giving back to the community that made him rich.
But let's be honest, it also guaranteed that
every single news camera in the city was at his
front door on Christmas week. It was essentially
free advertising on every channel. Exactly. And
we can't forget the birthday parties. For his
own birthday, he'd throw these massive street
parties, free food rides, and when he turned
92 in 2006. He had a sale where items were 92
cents. He was always looking for the hook. Even
his funeral plans were a marketing gag. Oh, the
potato salad. I saw the photo of the sign in
the store. It detailed his wishes explicitly.
It said, when Ed dies, he would like a catered
funeral with accordion players and a buffet table
with a replica of Honest Ed on it made of potato
salad. A potato salad effigy. You really have
to respect a man who just refuses to take his
own mortality seriously. He wanted to leave people
smiling. But this is where the story pivots.
We have the potato salad man, the orange crate
hustler, the guy riding elephants. And then suddenly
we have the savior of the stage. It's quite the
transition. How does the discount king end up
owning the most prestigious theater in town?
It starts in 1963 with the Royal Alexander Theater.
This was a Beaux Arts landmark, a truly stunning
building, but it was on death's door. The wrecking
ball was practically swinging. The theater business
locally was tanking. The O 'Keeffe Center, which
was new or big or all concrete, was taking all
the big touring shows. The Royal Alex was losing
money fast, and the owners just wanted to sell
the land. So Ed steps in. He buys it from the
Malacca State. And because it was losing money
and because nobody else wanted it, he gets it
at a massive bargain. Of course he did. He never
paid retail if he could help it. But the cultural
elite in Toronto were absolutely horrified. They
clutched their pearls. They really did. They
thought, what does the guy who sells cheap underwear
know about high culture? Is he going to put neon
signs on the proscenium arches? Is he going to
sell popcorn in the aisles? But he didn't. He
restored it lovingly. He brought it back to its
original glory. But here's the insight I want
to dig into from the deep dive. He applied the
exact same retail logic to the theater that he
applied to the discount store. Yes. He realized
that the play itself wasn't enough. He needed
an ecosystem. He understood vertical integration
before it was a buzzword in business schools.
He looked at the theater and said, people need
to eat before the show. If they eat somewhere
else, that's money I am missing. So he bought
the warehouse next door. And turned it into Ed's
warehouse. A restaurant. But not a fancy high
margin bistro with a finicky chef. He served
a fixed menu to cut costs and increase speed.
Prime rib, mashed potatoes, peas. That is it.
It's the Ford Model T of dinners. You can have
any dinner you want as long as it's roast beef.
Exactly. No chefs making complicated sauces that
take 20 minutes. Just efficient, hearty food
in a lavish setting. And because he owned the
supply chain, he could keep prices incredibly
low. It served 6 ,000 meals a night at its peak.
6 ,000. That is a factory of roast beef. But
look at the strategy here. The restaurant was
the loss leader, or at least the volume leader
that fed the theater. You go for the cheap beef,
you stay for the show. Right. He revitalized
the entire King Street area. He added Ed's seafood,
Folly Ed's Chinese. He built an entire destination.
And once he had the venue and the restaurants,
he needed the content. He didn't want to rely
on New York producers deciding what to send him
on tour. So he and his son, David Mervish, started
Mervish Productions. This was crucial. They stopped
relying on just booking touring acts. They start
producing their own massive sit -down productions.
The Lion King Mamma Mia hairspray. Two shows.
They brought these to Toronto and kept them running
for years. They own the theater, they own the
restaurant, they own the show. They captured
the entire night out. He even built a new theater
from scratch. The Princess of Wales Theater in
1993. Which is astonishing. It was the first
privately financed theater built in North America
in 30 years. Wow. Private money in theater is
almost unheard of because the margins are usually
terrible. But Mervish knew how to make the margins
work, because he wasn't just selling tickets,
he was selling the experience. But Ed wasn't
content with just conquering Toronto. He looked
across the pond to London. In 1982, he bought
the old Vic. This is Howard Ground we're talking
about. This is the theater of Laurence Olivier
and John Gielgud. It was falling apart. And he
bought it for 550 ,000 pounds. Which for a landmark
like that is basically the price of a semi -detached
house in London today. It was an absolute steal.
He spent millions renovating it. Right. And under
Mervish management, the Old Vic was artistically
incredible. It won tons of awards. It produced
some of the best theater of the decade. But it
never made money. Not a dime. He eventually sold
it in 1999. So looking at the balance sheet,
was it a failure? I don't think he saw it that
way. And neither did the British Empire. Because
he saved that theater, he was made a commander
of the Order of the British Empire. The CBE.
That is a very serious honor. It is. And this
brings us right back to the lost leader concept.
He lost money on the Old Vic financially, but
he gained prestige, he gained a legacy, and he
saved a piece of history. The profit was social
capital. Exactly. He was willing to lose money
on what he loved because he was making money
on the roast beef and the tin corn. Speaking
of honors, The list is remarkably long. He was
an officer of the Order of Canada. He had an
Ed Mervish day in Toronto. But my absolute favorite
honor has to be the Freeman of the City of London.
Paul, this is the best one. One of the ancient
medieval privileges of being a Freeman of the
City of London is that you have the legal right
to drive sheep across London Bridge. Now, most
people would frame the certificate and put it
on the wall in their office. Please tell me Ed
didn't do that. He absolutely did not. He rented
a herd of sheep. Of course he did. And there
he was, Ed Mervish, the boy from Colonial Beach
who grew up sharing a battle ram, driving a literal
herd of sheep across London Bridge in front of
all the press. It's the perfect synthesis of
his life. It's a high honor treated like a barnyard
stunt. It is high -low culture in a nutshell.
Exactly. He took the pomp and circumstance and
made it fun. He made it accessible. Sadly, the
show had to end eventually. Ed Mervish passed
away in July 2007 at the age of 92. The reaction
was immense. It wasn't just a CEO dying. It was
a city icon. Theaters on Broadway in New York
dimmed their lights. That is a rare tribute for
someone who wasn't a performer or a director.
It really showed the respect the industry had
for him as a producer. In Toronto, the police
provided a ceremonial unit for the funeral. And
get this, one of the police horses in the unit
was actually named Honest Ed. Even Jones Soda
issued bottles with his picture on the label.
You know you've transcended business when you
are on a soda bottle. That's true pop culture
status. But the legacy has shifted since his
death. Honest Ed's the store itself closed in
2016. That was a hard day for the city. I remember
it. It was the end of an era. The block was sold
for redevelopment. The famous sign went into
storage. All those hand -painted signs, which
were iconic, full of puns and bad jokes, were
sold off to the public. It's a bit sad, but in
a way, it fits his philosophy. He was always
about the deal the moment the event. The store
served its purpose. But look at what remains.
The Royal Alex is still there. The Princess of
Wales is still there. The Ed Mervish Theater
is still there. It really is a duality. He sold
bargain goods on orange crates so he could lose
money on high art productions. He was a man who
understood that you have to feed the stomach
with cheap turkeys and roast beef before you
can feed the soul with Shakespeare. And he understood
that sometimes the best investment is the one
that doesn't show up on the balance sheet immediately.
Whether it was housing artists in Mervish Village
or restoring a crumbling theater, he played the
long game. He understood value, not just price.
So as we wrap up this deep dive into the life
of the bargain king, here is something for you
to chew on. Ed Mervish mastered the loss leader,
losing a little here to gain a lot there. Think
about your own life. What is your loss leader?
What is the thing you are willing to spend time,
energy, or money on at a loss because you know
it brings value in a completely different currency?
Maybe it's a hobby, a volunteer gig, or just
a passion project that drains your wallet but
fills your cup. Because if Ed taught us anything,
it's that the things that don't make sense, C
-E -N -T -S, often make the most sense in the
long run. That's a great thought to end on. That's
it for this deep dive. Thanks for listening.
See you next time.