WEBVTT 00:00:00.000 --> 00:00:04.240 Imagine, imagine if you can see a man standing 00:00:04.240 --> 00:00:06.839 on top of just a massive mountain of merchandise. 00:00:06.860 --> 00:00:09.339 Like a literal mountain. Pretty much, yeah. We're 00:00:09.339 --> 00:00:13.179 talking tinned corn mismatched socks. maybe some 00:00:13.179 --> 00:00:16.359 porcelain figurines, and it is all piled high 00:00:16.359 --> 00:00:20.100 on these flimsy orange crates. Oh, wow. And he 00:00:20.100 --> 00:00:23.039 is screaming himself hoarse. He's practically 00:00:23.039 --> 00:00:25.679 vibrating with energy, is shouting about a bargain 00:00:25.679 --> 00:00:28.160 that you literally cannot afford to miss. It 00:00:28.160 --> 00:00:30.359 sounds chaotic, like a carnival barker having 00:00:30.359 --> 00:00:33.060 a full -on breakdown. Exactly. It's loud, and 00:00:33.060 --> 00:00:35.359 frankly, it looks a little desperate. But now, 00:00:35.520 --> 00:00:38.000 cut to a totally different scene. OK. That same 00:00:38.000 --> 00:00:41.460 man, but now he's in a tuxedo. Quite the wardrobe 00:00:41.460 --> 00:00:44.460 change. Right. He is sipping champagne with British 00:00:44.460 --> 00:00:46.820 royalty. He's shaking hands with the most elite 00:00:46.820 --> 00:00:49.659 actors in the world. And he has just single -handedly 00:00:49.659 --> 00:00:51.899 saved one of the most historic theaters in the 00:00:51.899 --> 00:00:54.579 Western Hemisphere from a wrecking ball. See, 00:00:54.600 --> 00:00:56.280 that sounds like two completely different movies 00:00:56.280 --> 00:00:58.859 just spliced together by accident. I mean, usually 00:00:58.859 --> 00:01:01.479 in business history you get this scrappy, ruthless 00:01:01.479 --> 00:01:04.620 discount or you get the refined, benevolent patron 00:01:04.620 --> 00:01:06.700 of the arts. Yeah, you don't get both. You rarely 00:01:06.700 --> 00:01:08.939 get them in the same lifetime and you almost 00:01:08.939 --> 00:01:11.359 never get them in the exact same body. But that 00:01:11.359 --> 00:01:13.620 is exactly the paradox we are unpacking today. 00:01:13.819 --> 00:01:17.280 We're doing a deep dive into the life, the business 00:01:17.280 --> 00:01:21.939 philosophy and the just sheer audacity of Ed 00:01:21.939 --> 00:01:24.959 Mervish. It is a wild ride. It really is. Now, 00:01:25.040 --> 00:01:28.189 if you are from Toronto, You know the name Honest 00:01:28.189 --> 00:01:30.590 Ed. You know that massive sign with the blinking 00:01:30.590 --> 00:01:32.790 lights that looked like Las Vegas got lost in 00:01:32.790 --> 00:01:34.890 a Canadian blizzard? The aesthetic was definitely 00:01:34.890 --> 00:01:37.370 unique. But if you're coming to this fresh, you 00:01:37.370 --> 00:01:39.989 are in for a treat. Because the source material 00:01:39.989 --> 00:01:43.019 we're looking at today is this incredible biographical 00:01:43.019 --> 00:01:44.939 record of his life. And I think we should be 00:01:44.939 --> 00:01:46.420 clear right up front for everyone listening, 00:01:47.019 --> 00:01:49.140 this Deep Dives isn't just a biography. Right. 00:01:49.239 --> 00:01:51.340 We have a stack of biographical records here, 00:01:51.500 --> 00:01:53.900 sure. But what we're really looking at is a case 00:01:53.900 --> 00:01:56.459 study in business adaptability. Yes. It's about 00:01:56.459 --> 00:01:59.500 how a concept called the loss leader, combined 00:01:59.500 --> 00:02:02.590 with this P .K. Barnum level showmanship, didn't 00:02:02.590 --> 00:02:05.250 just sell cheap socks. It did way more than that. 00:02:05.390 --> 00:02:08.849 It actually revitalized entire city blocks and 00:02:08.849 --> 00:02:11.110 saved the theater industry in two different countries. 00:02:11.409 --> 00:02:13.990 We really do have a lot of ground to cover. The 00:02:13.990 --> 00:02:16.610 sources paint a picture of a man whose stunts 00:02:16.610 --> 00:02:19.629 were, frankly, hilarious. I mean, truly laugh 00:02:19.629 --> 00:02:22.710 out loud funny. But under all that humor, there 00:02:22.710 --> 00:02:25.770 was this unintentional genius at play. That is 00:02:25.770 --> 00:02:29.229 the key word for me today, unintentional. Yeah. 00:02:29.439 --> 00:02:31.840 Because a lot of what Mervish did just to survive 00:02:31.840 --> 00:02:34.360 or to make a quick buck to feed his family ended 00:02:34.360 --> 00:02:37.099 up being master classes in urban planning and 00:02:37.099 --> 00:02:39.360 vertical integration. He was playing 4D chess. 00:02:39.580 --> 00:02:41.759 He was. He was playing 4D chess while everyone 00:02:41.759 --> 00:02:43.300 else was playing checkers, even if he didn't 00:02:43.300 --> 00:02:45.620 actually realize it at the time. So let's rewind 00:02:45.620 --> 00:02:47.860 the tape. Where does a character like this even 00:02:47.860 --> 00:02:50.569 spawn? because he feels like he walks straight 00:02:50.569 --> 00:02:53.050 out of a Dickens novel. But he was actually born 00:02:53.050 --> 00:02:56.169 in Colonial Beach, Virginia in 1914. Right. He 00:02:56.169 --> 00:02:59.610 starts life as Yehuda Mervish. His parents were 00:02:59.610 --> 00:03:01.830 Jewish immigrants from Lithuania and Austria. 00:03:02.030 --> 00:03:04.710 Classic immigrant story. Exactly. And right away 00:03:04.710 --> 00:03:06.990 you have this narrative of assimilation. His 00:03:06.990 --> 00:03:09.030 cousin actually pressured the parents to give 00:03:09.030 --> 00:03:11.430 him a more American name because Yehuda sounded 00:03:11.430 --> 00:03:14.879 too old world. So Yehuda became Edwin. But there's 00:03:14.879 --> 00:03:17.900 one specific anecdote from his birth, or rather 00:03:17.900 --> 00:03:21.409 shortly after, that Mervish himself always pointed 00:03:21.409 --> 00:03:24.629 to as his destiny. It is in every biography of 00:03:24.629 --> 00:03:26.689 him for a very good reason. Oh, the circumcision 00:03:26.689 --> 00:03:29.750 story? Yes, the bris. It's incredible. So Colonial 00:03:29.750 --> 00:03:32.430 Beach is this tiny town. There's no mohel that's 00:03:32.430 --> 00:03:35.150 the person qualified to perform the circumcision 00:03:35.150 --> 00:03:37.770 ceremony. Right. So the family's in a bind. They 00:03:37.770 --> 00:03:40.990 have to import one from Washington, DC. They 00:03:40.990 --> 00:03:43.449 bring in this guy, Rabbi Moshe Rubin Yolson. 00:03:43.669 --> 00:03:45.610 And for the entertainment history buffs listening 00:03:45.610 --> 00:03:48.069 or anyone who knows the Golden Age of Hollywood, 00:03:48.629 --> 00:03:52.360 that last name Yolson, is the smoking gun. Exactly. 00:03:52.780 --> 00:03:55.259 Rabbi Ilson was the father of Al Jolson. The 00:03:55.259 --> 00:03:58.460 jazz singer. Yes. One of the biggest, most famous 00:03:58.460 --> 00:04:01.360 entertainers of the entire 20th century. And 00:04:01.360 --> 00:04:03.240 Mervish loved to tell people that story. He'd 00:04:03.240 --> 00:04:05.259 say that because Al Jolson's dad performed his 00:04:05.259 --> 00:04:08.020 bridge. That was his literal physical introduction 00:04:08.020 --> 00:04:10.219 to show business. A very painful introduction 00:04:10.219 --> 00:04:12.120 to be sure, but it really set the tone. It's 00:04:12.120 --> 00:04:14.360 almost like the universe tagged him for the stage 00:04:14.360 --> 00:04:16.939 right from the cradle. It really is. But before 00:04:16.939 --> 00:04:20.379 the stage came the struggle. And honestly, Struggle 00:04:20.379 --> 00:04:23.459 is putting it lightly. The family moves to Toronto 00:04:23.459 --> 00:04:27.199 in 1923 after his father's grocery store in DC 00:04:27.199 --> 00:04:29.939 goes completely belly up. And the records from 00:04:29.939 --> 00:04:32.779 this period, it's grim. They moved to Dundas 00:04:32.779 --> 00:04:35.819 Street, west in Toronto. His father is trying 00:04:35.819 --> 00:04:39.420 absolutely everything to make ends meet. He's 00:04:39.420 --> 00:04:42.100 selling Fuller brushes door to door. He's selling 00:04:42.100 --> 00:04:45.339 the encyclopedia Freemasonry, which is a niche 00:04:45.339 --> 00:04:48.120 market, if I've ever heard of one, before finally 00:04:48.120 --> 00:04:50.360 scraping together enough capital for another 00:04:50.360 --> 00:04:52.319 grocery store. And we have to talk about the 00:04:52.319 --> 00:04:54.920 living situation. They are living above the store, 00:04:55.160 --> 00:04:57.519 which is classic for the time, but they aren't 00:04:57.519 --> 00:04:59.579 alone up there. No, not at all. They're sharing 00:04:59.579 --> 00:05:01.860 this tiny apartment with a Hebrew school. It 00:05:01.860 --> 00:05:03.860 really grounds you in the level of poverty they 00:05:03.860 --> 00:05:06.800 were dealing with. Mervish joked later in life, 00:05:06.860 --> 00:05:09.100 and he always used humor to deflect the pain 00:05:09.100 --> 00:05:11.259 that his biggest childhood dream wasn't fame 00:05:11.259 --> 00:05:14.180 or fortune. That wasn't a fancy car. No, it was 00:05:14.180 --> 00:05:15.939 just to have a bathroom he didn't have to share 00:05:15.939 --> 00:05:19.899 with 50 other people. Just basic dignity. And 00:05:19.899 --> 00:05:22.899 that level of deprivation, it builds a certain 00:05:22.899 --> 00:05:25.120 kind of grit. You learn to value every single 00:05:25.120 --> 00:05:28.500 penny. And he needed that grit because tragedy 00:05:28.500 --> 00:05:30.959 struck when he was just 15. His father died. 00:05:31.120 --> 00:05:33.300 Yeah, and Ed had to drop out of school instantly. 00:05:33.540 --> 00:05:36.300 He became the sole support for his mother, his 00:05:36.300 --> 00:05:39.189 sister Lorraine, and his brother Robert. Just 00:05:39.189 --> 00:05:41.610 a kid himself. Side note here, his brother Robert 00:05:41.610 --> 00:05:43.370 actually went on to become a very successful 00:05:43.370 --> 00:05:46.129 novelist later on. Oh, wow. I didn't know that. 00:05:46.290 --> 00:05:48.470 Yeah. But for Ed, the creative writing had to 00:05:48.470 --> 00:05:51.529 wait. He was in cure survival mode. He tries 00:05:51.529 --> 00:05:53.899 to keep the grocery store afloat. but it fails. 00:05:54.620 --> 00:05:57.779 So he pivots, and this is where we see the very 00:05:57.779 --> 00:06:00.779 first flash of that Honest Ed attitude, that 00:06:00.779 --> 00:06:03.560 total refusal to be pushed around. The dry cleaning 00:06:03.560 --> 00:06:05.879 business. Right. He partners with a childhood 00:06:05.879 --> 00:06:08.519 friend named Yale Simpson, and they open a dry 00:06:08.519 --> 00:06:10.519 cleaning business. Which they naturally named 00:06:10.519 --> 00:06:12.540 Simpsons. Now we really need to pause on the 00:06:12.540 --> 00:06:14.480 context here for you listeners who might not 00:06:14.480 --> 00:06:17.420 be Canadian. In Toronto at that time, Simpsons 00:06:17.420 --> 00:06:19.920 wasn't just a name. It was the name. It was a 00:06:19.920 --> 00:06:21.519 massive department store. Think of the equivalent 00:06:21.519 --> 00:06:24.139 of Macy's in New York or Harrods in London. Exactly. 00:06:24.199 --> 00:06:26.600 It was a retail giant. Yeah. So naturally, the 00:06:26.600 --> 00:06:28.779 corporate lawyers from the big department store, 00:06:28.839 --> 00:06:32.160 Simpsons, get wind of this tiny little dry cleaner 00:06:32.160 --> 00:06:35.300 using their name. Oh, boy. They descend on him. 00:06:35.420 --> 00:06:37.839 They demand he change the name immediately. They 00:06:37.839 --> 00:06:40.279 threaten to sue him into oblivion. And most 19 00:06:40.279 --> 00:06:42.680 year olds would fold immediately. I know I would 00:06:42.680 --> 00:06:45.980 have folded. But Ed. He brings out his partner, 00:06:46.160 --> 00:06:47.899 Yale Simpson, introduces him to the corporate 00:06:47.899 --> 00:06:50.740 suits, and says the famous line, Here's my Mr. 00:06:50.920 --> 00:06:53.319 Simpson. Where's yours? It is such a brilliant 00:06:53.319 --> 00:06:56.120 deflection. It really is. Yeah. He knew he was 00:06:56.120 --> 00:06:58.300 technically right. It was his partner's actual 00:06:58.300 --> 00:07:00.660 real name, and he just refused to be bullied 00:07:00.660 --> 00:07:03.759 by the big guys. That anti -corporate, scrappy 00:07:03.759 --> 00:07:06.000 identity was forming right there in that room. 00:07:06.740 --> 00:07:08.860 He eventually did settle and change the name, 00:07:08.899 --> 00:07:12.569 but the moral victor was completely his. He eventually 00:07:12.569 --> 00:07:14.990 left dry cleaning and found some stability working 00:07:14.990 --> 00:07:17.209 as a produce manager for another entrepreneur, 00:07:17.509 --> 00:07:21.230 Leon Weinstein. But the itch was there. He wanted 00:07:21.230 --> 00:07:25.970 his own kingdom. Which brings us to 1948. The 00:07:25.970 --> 00:07:28.509 year everything changed. He's married to Anne 00:07:28.509 --> 00:07:30.769 Macklin now, who by the way was a jazz singer 00:07:30.769 --> 00:07:33.290 and a sculptor, which is a fascinating match 00:07:33.290 --> 00:07:35.850 for a grocer. A very creative household. And 00:07:35.850 --> 00:07:38.189 they decide to take the plunge, but they have 00:07:38.189 --> 00:07:40.490 no money. No bank is going to loan them what 00:07:40.490 --> 00:07:43.529 they need. So in a move that would give any modern 00:07:43.529 --> 00:07:46.470 financial advisor an absolute heart attack, Ed 00:07:46.470 --> 00:07:49.029 cashes in his wife's insurance policy. It's the 00:07:49.029 --> 00:07:51.310 classic burn the boats moment. Exactly. There 00:07:51.310 --> 00:07:53.889 is zero safety net. He takes that cash and opens 00:07:53.889 --> 00:07:56.970 a store. But Honest Ed's wasn't just a store. 00:07:57.470 --> 00:08:00.029 It was an assault on the census. The aesthetic 00:08:00.029 --> 00:08:02.509 was let's call it early chaos. Early chaos is 00:08:02.509 --> 00:08:05.370 very polite. It was aggressive. The merchandise 00:08:05.370 --> 00:08:07.389 was displayed on those orange crates we mentioned, 00:08:07.569 --> 00:08:10.720 not shelves. There was no credit, no delivery, 00:08:10.819 --> 00:08:13.720 no returns, no service. He bought odd lots from 00:08:13.720 --> 00:08:16.480 bankruptcy sale, fire sale stuff that basically 00:08:16.480 --> 00:08:18.160 fell off the back of a truck, metaphorically 00:08:18.160 --> 00:08:20.160 speaking. But this is where the pure business 00:08:20.160 --> 00:08:23.220 genius kicks in. He claims to have invented or 00:08:23.220 --> 00:08:25.680 at least perfected the concept of the loss leader. 00:08:25.939 --> 00:08:29.180 Now, in retail, we know what this is today. Costco 00:08:29.180 --> 00:08:32.240 does it with their $1 .50 hot dogs. But break 00:08:32.240 --> 00:08:34.580 down why this was revolutionary for him back 00:08:34.580 --> 00:08:38.820 in 1948. So a loss leader is a product sold at 00:08:38.820 --> 00:08:41.539 a price lower than its market cost, sometimes 00:08:41.539 --> 00:08:44.059 even lower than what you paid for it, specifically 00:08:44.059 --> 00:08:47.440 to stimulate other sales of more profitable goods. 00:08:47.580 --> 00:08:49.460 You lose money on the socks to make money on 00:08:49.460 --> 00:08:52.200 the shirt. Exactly. Yeah. But Ed took it to the 00:08:52.200 --> 00:08:54.200 extreme. He wasn't just discounting slightly. 00:08:54.480 --> 00:08:57.000 He was selling tinned corn or unmatched socks 00:08:57.000 --> 00:08:59.299 for literally pennies. He was practically giving 00:08:59.299 --> 00:09:02.929 them away. And why? because it created an absolute 00:09:02.929 --> 00:09:05.289 frenzy. It stopped being shopping and started 00:09:05.289 --> 00:09:07.529 being looting. It turned the whole experience 00:09:07.529 --> 00:09:10.570 into a competitive sport. It did. And the Orange 00:09:10.570 --> 00:09:12.889 Crates played right into that. They weren't just 00:09:12.889 --> 00:09:15.169 about saving money on shelving. They were psychological. 00:09:15.190 --> 00:09:17.370 Oh, that makes sense. They signaled to the customer, 00:09:17.850 --> 00:09:20.350 I am not spending money on fancy decor so I can 00:09:20.350 --> 00:09:23.269 pass the savings directly to you. It made the 00:09:23.269 --> 00:09:25.610 customer feel smart. It made them feel like they 00:09:25.610 --> 00:09:28.649 were beating the system. And once they were inside 00:09:28.649 --> 00:09:32.009 navigating that crazy maze of crates, which was 00:09:32.009 --> 00:09:33.950 intentionally confusing by the way the treasure 00:09:33.950 --> 00:09:36.110 hunt dopamine hit kicked in. They'd come for 00:09:36.110 --> 00:09:38.330 the five cent socks and leave with a lamp, a 00:09:38.330 --> 00:09:40.570 rug and a whole set of dishes they didn't even 00:09:40.570 --> 00:09:42.789 know they needed. And it worked like gangbusters. 00:09:42.909 --> 00:09:46.210 The store just exploded. It eventually swallowed 00:09:46.210 --> 00:09:48.850 up an entire city block from Bathurst Street 00:09:48.850 --> 00:09:51.789 to Markham Street. He billed it as the world's 00:09:51.789 --> 00:09:54.950 biggest discount department store. But as he 00:09:54.950 --> 00:09:58.570 expanded, he ran into a wall. Literally and bureaucratically. 00:09:58.929 --> 00:10:00.889 Right, the Markham Street houses. He started 00:10:00.889 --> 00:10:03.090 buying up the Victorian houses on the next street 00:10:03.090 --> 00:10:05.970 over. The plan was standard developer logic. 00:10:06.710 --> 00:10:09.110 Tear down the old houses, build a massive parking 00:10:09.110 --> 00:10:11.649 lot for the customers. Cure efficiency. You need 00:10:11.649 --> 00:10:13.370 parking for all those thousands of people buying 00:10:13.370 --> 00:10:16.330 cheap turkeys. But the City of Toronto said no. 00:10:16.450 --> 00:10:18.529 They straight up rejected the demolition permit. 00:10:18.870 --> 00:10:21.309 So now Ed is stuck with a row of old Edwardian 00:10:21.309 --> 00:10:23.789 houses he can't knock down. And this is where 00:10:23.789 --> 00:10:26.789 the unintentional urban planner comes in. Most 00:10:26.789 --> 00:10:28.529 developers at the time would have just let the 00:10:28.529 --> 00:10:31.350 buildings rot out of spite or burned down for 00:10:31.350 --> 00:10:34.029 insurance. But Ed listened to his wife, Anne. 00:10:34.190 --> 00:10:37.110 Yes. She suggested renting them out cheaply to 00:10:37.110 --> 00:10:39.570 artists. Because artists don't mind old plumbing 00:10:39.570 --> 00:10:41.929 if the natural light is good and the rent is 00:10:41.929 --> 00:10:44.450 dirt low. Precisely. And because the rent was 00:10:44.450 --> 00:10:47.399 so low, artists swocked there. galleries opened, 00:10:47.919 --> 00:10:50.720 studios, boutiques. It became Mervish Village. 00:10:50.940 --> 00:10:53.200 It's incredible. He accidentally created one 00:10:53.200 --> 00:10:55.480 of the coolest, most vibrant cultural hubs in 00:10:55.480 --> 00:10:58.159 the entire city just because he failed to build 00:10:58.159 --> 00:11:00.820 a parking lot. It is a perfect example of constraints 00:11:00.820 --> 00:11:02.940 breeding creativity. He couldn't do the boring 00:11:02.940 --> 00:11:04.980 thing, so he did the interesting thing. But while 00:11:04.980 --> 00:11:07.899 Mervish Village was this quiet artistic side, 00:11:08.019 --> 00:11:11.000 the main store, Honest Eds was becoming a full 00:11:11.000 --> 00:11:14.059 blown circus. We have to talk about the stunts. 00:11:14.179 --> 00:11:17.240 We really do. This man understood the attention 00:11:17.240 --> 00:11:19.639 economy decades before the internet existed. 00:11:20.019 --> 00:11:21.980 He knew that if you're selling discount goods, 00:11:22.460 --> 00:11:25.139 you can't be dignified. You have to be loud. 00:11:25.259 --> 00:11:27.600 You have to be unavoidable. You rode elephants 00:11:27.600 --> 00:11:30.960 in downtown Toronto. He did. He brought in literal 00:11:30.960 --> 00:11:33.519 elephants for parades. But that is just the tip 00:11:33.519 --> 00:11:35.960 of the iceberg. The source material is full of 00:11:35.960 --> 00:11:38.039 these. My favorite story, the one that really 00:11:38.039 --> 00:11:40.220 shows his manipulative genius in a good way, 00:11:40.440 --> 00:11:43.519 is the dress code protest. Oh, this is pure gold. 00:11:43.940 --> 00:11:45.840 So later in his career, he opens a restaurant, 00:11:45.960 --> 00:11:48.519 and he decides to enforce a strict dress code. 00:11:49.340 --> 00:11:51.379 Jackets for men, no jeans, that sort of thing. 00:11:51.580 --> 00:11:53.720 Which seems completely off -brand for the guy 00:11:53.720 --> 00:11:56.559 selling socks on orange crates. It totally was. 00:11:57.200 --> 00:11:59.759 And people complained. the media started grumbling 00:11:59.759 --> 00:12:02.580 about it. So seeing an opportunity, Ed hires 00:12:02.580 --> 00:12:04.840 people to pick at his own restaurant. Wait, let's 00:12:04.840 --> 00:12:07.320 make sure you catch that. He paid protesters 00:12:07.320 --> 00:12:09.659 to stand outside his own business with signs 00:12:09.659 --> 00:12:12.909 yelling at him. Yes. They had signs saying, down 00:12:12.909 --> 00:12:15.330 with the dress code and unfair to eaters. He 00:12:15.330 --> 00:12:17.710 completely manufactured the controversy. That 00:12:17.710 --> 00:12:20.450 is brilliant. Because suddenly everyone was talking 00:12:20.450 --> 00:12:22.350 about the restaurant, it made the place seem 00:12:22.350 --> 00:12:24.210 exclusive, important, and worth fighting about. 00:12:24.289 --> 00:12:26.470 That is 4D chess right there. He's controlling 00:12:26.470 --> 00:12:28.350 his own opposition. And then of course there 00:12:28.350 --> 00:12:31.090 were the turkeys. The turkey giveaway? This became 00:12:31.090 --> 00:12:34.110 absolute folklore in Toronto. Every Christmas 00:12:34.110 --> 00:12:36.649 he would give away 10 ,000 pounds of free turkeys. 00:12:36.840 --> 00:12:39.059 People would line up for blocks. I mean, people 00:12:39.059 --> 00:12:41.440 camped out overnight in the freezing Canadian 00:12:41.440 --> 00:12:44.519 winter. And it lasted until 2015. It wasn't just 00:12:44.519 --> 00:12:47.639 marketing. It became a genuine part of the city's 00:12:47.639 --> 00:12:50.279 holiday rhythm. Yeah. It was a tangible way of 00:12:50.279 --> 00:12:52.500 giving back to the community that made him rich. 00:12:53.200 --> 00:12:55.879 But let's be honest, it also guaranteed that 00:12:55.879 --> 00:12:58.539 every single news camera in the city was at his 00:12:58.539 --> 00:13:01.039 front door on Christmas week. It was essentially 00:13:01.039 --> 00:13:03.960 free advertising on every channel. Exactly. And 00:13:03.960 --> 00:13:06.080 we can't forget the birthday parties. For his 00:13:06.080 --> 00:13:08.159 own birthday, he'd throw these massive street 00:13:08.159 --> 00:13:11.019 parties, free food rides, and when he turned 00:13:11.019 --> 00:13:14.289 92 in 2006. He had a sale where items were 92 00:13:14.289 --> 00:13:16.649 cents. He was always looking for the hook. Even 00:13:16.649 --> 00:13:19.129 his funeral plans were a marketing gag. Oh, the 00:13:19.129 --> 00:13:21.149 potato salad. I saw the photo of the sign in 00:13:21.149 --> 00:13:23.129 the store. It detailed his wishes explicitly. 00:13:23.409 --> 00:13:25.889 It said, when Ed dies, he would like a catered 00:13:25.889 --> 00:13:28.289 funeral with accordion players and a buffet table 00:13:28.289 --> 00:13:30.690 with a replica of Honest Ed on it made of potato 00:13:30.690 --> 00:13:33.509 salad. A potato salad effigy. You really have 00:13:33.509 --> 00:13:35.889 to respect a man who just refuses to take his 00:13:35.889 --> 00:13:38.590 own mortality seriously. He wanted to leave people 00:13:38.590 --> 00:13:41.009 smiling. But this is where the story pivots. 00:13:41.529 --> 00:13:44.470 We have the potato salad man, the orange crate 00:13:44.470 --> 00:13:47.669 hustler, the guy riding elephants. And then suddenly 00:13:47.669 --> 00:13:50.470 we have the savior of the stage. It's quite the 00:13:50.470 --> 00:13:52.649 transition. How does the discount king end up 00:13:52.649 --> 00:13:54.629 owning the most prestigious theater in town? 00:13:54.909 --> 00:13:57.970 It starts in 1963 with the Royal Alexander Theater. 00:13:58.570 --> 00:14:01.629 This was a Beaux Arts landmark, a truly stunning 00:14:01.629 --> 00:14:04.610 building, but it was on death's door. The wrecking 00:14:04.610 --> 00:14:07.230 ball was practically swinging. The theater business 00:14:07.230 --> 00:14:09.750 locally was tanking. The O 'Keeffe Center, which 00:14:09.750 --> 00:14:12.230 was new or big or all concrete, was taking all 00:14:12.230 --> 00:14:14.850 the big touring shows. The Royal Alex was losing 00:14:14.850 --> 00:14:17.289 money fast, and the owners just wanted to sell 00:14:17.289 --> 00:14:20.370 the land. So Ed steps in. He buys it from the 00:14:20.370 --> 00:14:23.090 Malacca State. And because it was losing money 00:14:23.090 --> 00:14:24.889 and because nobody else wanted it, he gets it 00:14:24.889 --> 00:14:27.070 at a massive bargain. Of course he did. He never 00:14:27.070 --> 00:14:29.649 paid retail if he could help it. But the cultural 00:14:29.649 --> 00:14:31.970 elite in Toronto were absolutely horrified. They 00:14:31.970 --> 00:14:33.950 clutched their pearls. They really did. They 00:14:33.950 --> 00:14:36.470 thought, what does the guy who sells cheap underwear 00:14:36.470 --> 00:14:39.210 know about high culture? Is he going to put neon 00:14:39.210 --> 00:14:40.870 signs on the proscenium arches? Is he going to 00:14:40.870 --> 00:14:43.409 sell popcorn in the aisles? But he didn't. He 00:14:43.409 --> 00:14:45.669 restored it lovingly. He brought it back to its 00:14:45.669 --> 00:14:48.350 original glory. But here's the insight I want 00:14:48.350 --> 00:14:51.769 to dig into from the deep dive. He applied the 00:14:51.769 --> 00:14:54.590 exact same retail logic to the theater that he 00:14:54.590 --> 00:14:57.639 applied to the discount store. Yes. He realized 00:14:57.639 --> 00:14:59.779 that the play itself wasn't enough. He needed 00:14:59.779 --> 00:15:02.200 an ecosystem. He understood vertical integration 00:15:02.200 --> 00:15:04.480 before it was a buzzword in business schools. 00:15:04.940 --> 00:15:07.480 He looked at the theater and said, people need 00:15:07.480 --> 00:15:10.000 to eat before the show. If they eat somewhere 00:15:10.000 --> 00:15:12.720 else, that's money I am missing. So he bought 00:15:12.720 --> 00:15:15.179 the warehouse next door. And turned it into Ed's 00:15:15.179 --> 00:15:18.759 warehouse. A restaurant. But not a fancy high 00:15:18.759 --> 00:15:21.679 margin bistro with a finicky chef. He served 00:15:21.679 --> 00:15:24.200 a fixed menu to cut costs and increase speed. 00:15:24.779 --> 00:15:27.940 Prime rib, mashed potatoes, peas. That is it. 00:15:28.159 --> 00:15:29.940 It's the Ford Model T of dinners. You can have 00:15:29.940 --> 00:15:31.580 any dinner you want as long as it's roast beef. 00:15:31.820 --> 00:15:34.419 Exactly. No chefs making complicated sauces that 00:15:34.419 --> 00:15:36.820 take 20 minutes. Just efficient, hearty food 00:15:36.820 --> 00:15:39.299 in a lavish setting. And because he owned the 00:15:39.299 --> 00:15:41.519 supply chain, he could keep prices incredibly 00:15:41.519 --> 00:15:45.080 low. It served 6 ,000 meals a night at its peak. 00:15:45.379 --> 00:15:48.340 6 ,000. That is a factory of roast beef. But 00:15:48.340 --> 00:15:51.159 look at the strategy here. The restaurant was 00:15:51.159 --> 00:15:53.179 the loss leader, or at least the volume leader 00:15:53.179 --> 00:15:55.519 that fed the theater. You go for the cheap beef, 00:15:55.580 --> 00:15:57.980 you stay for the show. Right. He revitalized 00:15:57.980 --> 00:16:01.259 the entire King Street area. He added Ed's seafood, 00:16:01.820 --> 00:16:04.799 Folly Ed's Chinese. He built an entire destination. 00:16:04.940 --> 00:16:06.759 And once he had the venue and the restaurants, 00:16:06.860 --> 00:16:09.720 he needed the content. He didn't want to rely 00:16:09.720 --> 00:16:11.960 on New York producers deciding what to send him 00:16:11.960 --> 00:16:15.480 on tour. So he and his son, David Mervish, started 00:16:15.480 --> 00:16:18.769 Mervish Productions. This was crucial. They stopped 00:16:18.769 --> 00:16:21.470 relying on just booking touring acts. They start 00:16:21.470 --> 00:16:24.309 producing their own massive sit -down productions. 00:16:24.649 --> 00:16:27.169 The Lion King Mamma Mia hairspray. Two shows. 00:16:27.389 --> 00:16:29.330 They brought these to Toronto and kept them running 00:16:29.330 --> 00:16:31.710 for years. They own the theater, they own the 00:16:31.710 --> 00:16:33.269 restaurant, they own the show. They captured 00:16:33.269 --> 00:16:35.509 the entire night out. He even built a new theater 00:16:35.509 --> 00:16:38.149 from scratch. The Princess of Wales Theater in 00:16:38.149 --> 00:16:40.610 1993. Which is astonishing. It was the first 00:16:40.610 --> 00:16:42.690 privately financed theater built in North America 00:16:42.690 --> 00:16:45.490 in 30 years. Wow. Private money in theater is 00:16:45.490 --> 00:16:47.289 almost unheard of because the margins are usually 00:16:47.289 --> 00:16:50.169 terrible. But Mervish knew how to make the margins 00:16:50.169 --> 00:16:51.970 work, because he wasn't just selling tickets, 00:16:52.070 --> 00:16:54.370 he was selling the experience. But Ed wasn't 00:16:54.370 --> 00:16:57.389 content with just conquering Toronto. He looked 00:16:57.389 --> 00:17:00.570 across the pond to London. In 1982, he bought 00:17:00.570 --> 00:17:02.929 the old Vic. This is Howard Ground we're talking 00:17:02.929 --> 00:17:05.390 about. This is the theater of Laurence Olivier 00:17:05.390 --> 00:17:09.099 and John Gielgud. It was falling apart. And he 00:17:09.099 --> 00:17:12.599 bought it for 550 ,000 pounds. Which for a landmark 00:17:12.599 --> 00:17:15.460 like that is basically the price of a semi -detached 00:17:15.460 --> 00:17:18.019 house in London today. It was an absolute steal. 00:17:18.220 --> 00:17:20.420 He spent millions renovating it. Right. And under 00:17:20.420 --> 00:17:22.740 Mervish management, the Old Vic was artistically 00:17:22.740 --> 00:17:25.019 incredible. It won tons of awards. It produced 00:17:25.019 --> 00:17:27.279 some of the best theater of the decade. But it 00:17:27.279 --> 00:17:29.559 never made money. Not a dime. He eventually sold 00:17:29.559 --> 00:17:32.259 it in 1999. So looking at the balance sheet, 00:17:32.400 --> 00:17:34.819 was it a failure? I don't think he saw it that 00:17:34.819 --> 00:17:38.099 way. And neither did the British Empire. Because 00:17:38.099 --> 00:17:40.619 he saved that theater, he was made a commander 00:17:40.619 --> 00:17:42.799 of the Order of the British Empire. The CBE. 00:17:43.039 --> 00:17:46.000 That is a very serious honor. It is. And this 00:17:46.000 --> 00:17:48.220 brings us right back to the lost leader concept. 00:17:49.200 --> 00:17:52.000 He lost money on the Old Vic financially, but 00:17:52.000 --> 00:17:55.579 he gained prestige, he gained a legacy, and he 00:17:55.579 --> 00:17:57.880 saved a piece of history. The profit was social 00:17:57.880 --> 00:18:00.579 capital. Exactly. He was willing to lose money 00:18:00.579 --> 00:18:02.619 on what he loved because he was making money 00:18:02.619 --> 00:18:04.759 on the roast beef and the tin corn. Speaking 00:18:04.759 --> 00:18:08.029 of honors, The list is remarkably long. He was 00:18:08.029 --> 00:18:10.329 an officer of the Order of Canada. He had an 00:18:10.329 --> 00:18:14.109 Ed Mervish day in Toronto. But my absolute favorite 00:18:14.109 --> 00:18:16.269 honor has to be the Freeman of the City of London. 00:18:16.410 --> 00:18:18.549 Paul, this is the best one. One of the ancient 00:18:18.549 --> 00:18:20.490 medieval privileges of being a Freeman of the 00:18:20.490 --> 00:18:22.950 City of London is that you have the legal right 00:18:22.950 --> 00:18:26.250 to drive sheep across London Bridge. Now, most 00:18:26.250 --> 00:18:28.329 people would frame the certificate and put it 00:18:28.329 --> 00:18:30.309 on the wall in their office. Please tell me Ed 00:18:30.309 --> 00:18:32.809 didn't do that. He absolutely did not. He rented 00:18:32.809 --> 00:18:34.970 a herd of sheep. Of course he did. And there 00:18:34.970 --> 00:18:37.829 he was, Ed Mervish, the boy from Colonial Beach 00:18:37.829 --> 00:18:40.849 who grew up sharing a battle ram, driving a literal 00:18:40.849 --> 00:18:43.509 herd of sheep across London Bridge in front of 00:18:43.509 --> 00:18:45.650 all the press. It's the perfect synthesis of 00:18:45.650 --> 00:18:48.470 his life. It's a high honor treated like a barnyard 00:18:48.470 --> 00:18:50.930 stunt. It is high -low culture in a nutshell. 00:18:51.160 --> 00:18:54.619 Exactly. He took the pomp and circumstance and 00:18:54.619 --> 00:18:57.880 made it fun. He made it accessible. Sadly, the 00:18:57.880 --> 00:19:00.579 show had to end eventually. Ed Mervish passed 00:19:00.579 --> 00:19:04.099 away in July 2007 at the age of 92. The reaction 00:19:04.099 --> 00:19:07.299 was immense. It wasn't just a CEO dying. It was 00:19:07.299 --> 00:19:10.640 a city icon. Theaters on Broadway in New York 00:19:10.640 --> 00:19:13.519 dimmed their lights. That is a rare tribute for 00:19:13.519 --> 00:19:15.380 someone who wasn't a performer or a director. 00:19:15.740 --> 00:19:17.460 It really showed the respect the industry had 00:19:17.460 --> 00:19:19.630 for him as a producer. In Toronto, the police 00:19:19.630 --> 00:19:22.250 provided a ceremonial unit for the funeral. And 00:19:22.250 --> 00:19:24.369 get this, one of the police horses in the unit 00:19:24.369 --> 00:19:27.470 was actually named Honest Ed. Even Jones Soda 00:19:27.470 --> 00:19:29.410 issued bottles with his picture on the label. 00:19:29.690 --> 00:19:31.490 You know you've transcended business when you 00:19:31.490 --> 00:19:33.690 are on a soda bottle. That's true pop culture 00:19:33.690 --> 00:19:35.849 status. But the legacy has shifted since his 00:19:35.849 --> 00:19:38.930 death. Honest Ed's the store itself closed in 00:19:38.930 --> 00:19:41.910 2016. That was a hard day for the city. I remember 00:19:41.910 --> 00:19:44.630 it. It was the end of an era. The block was sold 00:19:44.630 --> 00:19:46.609 for redevelopment. The famous sign went into 00:19:46.609 --> 00:19:48.740 storage. All those hand -painted signs, which 00:19:48.740 --> 00:19:51.359 were iconic, full of puns and bad jokes, were 00:19:51.359 --> 00:19:54.140 sold off to the public. It's a bit sad, but in 00:19:54.140 --> 00:19:56.900 a way, it fits his philosophy. He was always 00:19:56.900 --> 00:19:59.299 about the deal the moment the event. The store 00:19:59.299 --> 00:20:02.119 served its purpose. But look at what remains. 00:20:02.480 --> 00:20:04.650 The Royal Alex is still there. The Princess of 00:20:04.650 --> 00:20:06.809 Wales is still there. The Ed Mervish Theater 00:20:06.809 --> 00:20:09.690 is still there. It really is a duality. He sold 00:20:09.690 --> 00:20:12.130 bargain goods on orange crates so he could lose 00:20:12.130 --> 00:20:14.930 money on high art productions. He was a man who 00:20:14.930 --> 00:20:16.750 understood that you have to feed the stomach 00:20:16.750 --> 00:20:18.829 with cheap turkeys and roast beef before you 00:20:18.829 --> 00:20:21.390 can feed the soul with Shakespeare. And he understood 00:20:21.390 --> 00:20:23.730 that sometimes the best investment is the one 00:20:23.730 --> 00:20:25.849 that doesn't show up on the balance sheet immediately. 00:20:26.609 --> 00:20:28.410 Whether it was housing artists in Mervish Village 00:20:28.410 --> 00:20:31.849 or restoring a crumbling theater, he played the 00:20:31.849 --> 00:20:34.880 long game. He understood value, not just price. 00:20:35.299 --> 00:20:37.480 So as we wrap up this deep dive into the life 00:20:37.480 --> 00:20:39.640 of the bargain king, here is something for you 00:20:39.640 --> 00:20:42.579 to chew on. Ed Mervish mastered the loss leader, 00:20:43.180 --> 00:20:45.740 losing a little here to gain a lot there. Think 00:20:45.740 --> 00:20:48.180 about your own life. What is your loss leader? 00:20:48.659 --> 00:20:51.700 What is the thing you are willing to spend time, 00:20:51.859 --> 00:20:54.619 energy, or money on at a loss because you know 00:20:54.619 --> 00:20:56.940 it brings value in a completely different currency? 00:20:57.500 --> 00:21:00.180 Maybe it's a hobby, a volunteer gig, or just 00:21:00.180 --> 00:21:02.279 a passion project that drains your wallet but 00:21:02.279 --> 00:21:04.579 fills your cup. Because if Ed taught us anything, 00:21:04.799 --> 00:21:07.259 it's that the things that don't make sense, C 00:21:07.259 --> 00:21:09.680 -E -N -T -S, often make the most sense in the 00:21:09.680 --> 00:21:12.160 long run. That's a great thought to end on. That's 00:21:12.160 --> 00:21:13.759 it for this deep dive. Thanks for listening. 00:21:13.880 --> 00:21:14.299 See you next time.