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#25 Unwavering Dedication and a Passion for Business & Marketing with Karen Flavelle

In this episode of the Polestar Podcast by VELA Wealth, host Jason Boudreau speaks with Karen Flavelle, the CEO and Chair of Purdys Chocolatier about how her visionary leadership has been instrumental in steering Purdys toward continued success in the confectionery industry. In this episode, Karen also shares her passion for her philanthropic endeavors, contributing to various charitable causes and community initiatives. Karen’s story is one of determination, perseverance, and a passion for business that will undoubtedly capture your attention and leave you wanting to hear more.

 

 

Podcast Highlights:

  • Discover the begining of the Flavelle family’s ownership of Purdys Chocolatier in 1963, initiated by Charles Flavelle and Eric Wilson.
  • Karen shares her journey into business, influenced by her father’s success from a young age, leading her to pursue her passion for business and marketing.
  • Learn about Karen’s determination to become a part of the family business despite initial challenges and rejections and how her passion propelled her to becoming the powerhouse of Purdys.
  • Learn about the enduring values of quality, sustainability, and philanthropy at Purdys.

 

About the Guest – Karen Flavelle

Many different experiences have provided the toolbox for Karen to successfully lead Purdys, the largest Chocolatier in Canada, a BCom from Queen’s, living in Japan and Asia for 2 years, speaking fluent French, being trained in classic packaged goods marketing at General Mills, developing innovative new products at Product Development Partnership in the UK, and growing a popular chain of 140 restaurants: Swiss Chalet.

Karen’s personal mission is to help people connect, to strengthen existing relationships and build new ones. At almost 117 years old, Purdys Chocolatier is a delicate balance between tradition and innovation, giving customers their favorites while exciting them with new ideas and new chocolates. In addition, Purdys contributes to many, local Canadian organizations with a focus on helping children and their families.

About the Host – Jason Boudreau

Jason has built VELA Wealth into an established life and estate planning firm, guiding families as they make meaningful choices at the intersection of life and wealth. Jason’s areas of expertise include intergenerational wealth transfer and estate planning with a focus on advanced insurance-based solutions that incorporate philanthropy and legacy planning. Leveraging these specialties, Jason brings a fresh perspective and outside-the-box thinking to the strategic planning process. To read more, please visit the VELA team page.

 

The episode is also available on:

  

  

 

 

The Podcast Transcript:

Jason Boudreau:

Welcome everybody to the Polestar Podcast by VELA Wealth. I’m your host, Jason Boudreau, and today I have the pleasure of welcoming Karen Flavell to the conversation. Karen is the CEO and Chair of Purdys Chocolatier. Karen, thanks so much for being here today.

 

Karen Flavelle:

It’s a delight to be here. Thanks, Jason, for having me.

 

Jason Boudreau:

I think it will be neat for our listeners to hear the story of your life and obviously taking it all the way back as far as you want to go in that conversation to give us some context around how your family business came to be and then how you got involved over time. But as far back as you want to start would be great. And then we’ll carry the conversation from there.

 

Karen Flavelle:

Well, maybe I’ll start with why I got interested in business. My parents like to have quite a formal dinner four nights a week. So we’d be around the dining room table, and I would listen to what my father’s day had been and it always really intrigued me, but his message around that table also was “I don’t want to parachute kids over long term employees” and he also was careful to say, “How we make a bit of money but we put that money back into the business”, and so I think he was really trying to communicate two things which were his employees were terribly important to him. The business isn’t easy, and you need to keep building it and nurturing it. But what he also communicated is there’s no room for you in this business. And all of us heard that message and went off and did other things.

 

Jason Boudreau:

Right! Loud and clear.

 

Karen Flavelle:

Yes. So, I went to Business School at Queens University and graduated from there. From there I was very interested in marketing and wanted to do packaged goods marketing. So, I went to General Mills, which was a fantastic background. I loved it for a while and then I found myself wanting to go more towards the retail side of things because I saw that there were only five major grocers in Canada. So, as a packaged goods marketer at that point, it started to get a lot more challenging. But mostly, I like the experiential nature of retail and “being where the power was”, that’s how I thought of it at the time.

Then along came Jamie, who’s now my husband, and he happened to be living in London, UK, at the time. So, I thought, why don’t I go to London? I knew I was bored with something. I didn’t know whether it was Toronto or package goods. I felt it was time for a change. So, I moved to London. And unfortunately, I didn’t have a grandparent or anything that would give me status or a working visa and at that time, I was too old and they weren’t as generous with the ages at that time, so I was too old to get the student visa. So, I looked for a job. I tried to get into retail, and I remember being in an interview where they said “Well, from what you’re describing (wanting to be involved in everything the customer touches) purchasing is a good fit.” I thought, “no, no, no, no purchasing is not what I’m interested in.” So, I ended up getting a job with a boutique consulting company and they mostly helped companies like Quaker Oats to design a new product, that kind of thing, and it was good. I learned that really, I’m an operator. I’m not a consultant. I want to be the one trying to figure out what to do and then watching that project go all the way to the end and either being successful or pivoting and figuring out what else to do, but not being the person recommending. Then the crash of ‘87 happened, and Jamie was in Canadian dollar euro bonds at Citibank and that was a serious crash at the time. Citibank decided they didn’t need any more Canadian dollar euro bonds. So, then we had a decision of do we stay, and he gets another job, or do we go back to Canada. He’d already been in the UK 5 1/2 years by that point and was ready to go home and I wasn’t loving my job enough to say no. So we went back to Canada, and I sat down with a book called “What Color is Your Parachute?”

 

Jason Boudreau:

Oh yes, I know that book.

 

Karen Flavelle:

Well, the book leads you through; What do you love doing? What do you not like doing? What are you good at? What do you think you’re not good at? And lo and behold, the medium sized retail company came off the page. So, I thought, well, I know one of those.

Before I went to England, I was kind of restless in Toronto and I got an interview with Mcgavin’s bread thinking, “Well, maybe I’ll move back to Vancouver.” While I was there, I asked my father, “Hey, why don’t I come back to Vancouver and work for Purdys in marketing?” And he said “No, we don’t have any need for anybody in marketing. No, thank you.” And then I learned years later after the interview at Mcgavin’s, they said, “You know, I don’t think she’s really interested in moving to Vancouver.” And they were absolutely right, because in between arranging the interview and having the interview, I’d met Jamie. And so now I didn’t want to go to Vancouver. I wanted to be where he was. So, they absolutely read through the line.

So, back to when I came back to Toronto, having done what Colors Your Parachute, I was much more thoughtful about getting into retail. Whether it’s at Purdys or in Toronto. So, I approached my father again, but at the same time, Jamie had said, “I’ve been in London for 5 1/2 years. If we’re going to go to Vancouver for you to be with Purdys, then I’d like to be in Toronto for five years before we do that.” So, it was great because it gave my father and I five years to talk this through. It also meant I needed to find a job, which I did, and that’s one thing I’ve always thought is important for a family member, working elsewhere. And part of that working elsewhere is also finding the jobs. So, by that point, I got myself employed by General Mills, got myself – without a visa- employed in the UK, and now I was going to get myself employed back in Toronto. All before I went to Purdys. When you go into the family business and things don’t work out the way you’d hoped, you know that you can find something else. Whereas if you go directly from university straight into a family business and then you’re not loving it, you don’t have the same confidence or experience in finding your own job. So, I’ve always thought that was important for me. It just happened because I was not invited to come into the business, but it did work in my favor.

 

Jason Boudreau:

So, there wasn’t an internal family philosophy there about if you were going to come back, you needed to have the experience. It was just happenstance with you.

 

Karen Flavelle:

Just happenstance, yes. So, this time actually, he was ready for that question because his longest-term employee had said, “So, Charles, when is the family coming into the business?” And I guess that started him thinking about, “Well, if family doesn’t come into the business, then what?” So, he became more open. And then also I was one of four. I was the eldest and my youngest brother had died in a mountain climbing accident some years before. And so, my father felt his mortality as well and kind of understood that there needed to be an end game at some point. I’ve actually heard of a father/daughter family business talk about this and the father actually said, “I didn’t think I was going to die.” They don’t necessarily think about it. So, that made him receptive to me asking, and I was more thoughtful about what I could bring to Purdys and why I was interested and why I thought I might be good at it. And that started five years -actually turned into six years because Jamie and I had a third child along the way. So, I found a marketing position at Swiss Chalet in Toronto, which was the closest I could get to retail, because what I found as I went to the interviews with retail presidents in Toronto was, they couldn’t really see a place with my description of what I wanted. Which was trying to influence everything the customer touches. So, what the store looks like, what the what the staff are wearing, if they’re wearing a uniform, what products are being sold, how they’re merchandised, how they’re marketed, all of that. And there wasn’t really that kind of a position in retail organizations. The closest I came was Swiss Chalet. Which is multi-unit family, casual style dining and they had 140 restaurants.

 

Jason Boudreau:

Wow, all in Ontario primarily? Or in the East Coast?

 

Karen Flavelle:

Well, Ontario to Alberta and the East Coast. And then we had a competitor in Quebec that was strong, and we could never really make headway in BC it seemed. So, it never caught hold here. But in Ontario, it’s an institution and it was good for me because obviously it was multi-unit which is what retail was so just understanding labor costs, in that case, there was food cost because it’s the food’s being prepared at individual locations, and it was a very well operated organization. So, a good one to be part of and to learn from and actually way larger marketing budgets than I’d ever had at General Mills or some of those places.

 

Jason Boudreau:

It’s not a franchise though, right? It’s a corporate entity?

 

Karen Flavelle:

Well, it’s kind of a funny franchise. Because normally franchisees pay for the store to be built, whereas in the Swiss chalet model they didn’t. It was almost more like a profit-sharing model, whereas the Harvey’s -which is a sister company to Swiss chalet- that was a purer franchise. So yes, then there was the whole franchise model and getting things done through franchisees so if we were trying to do local store marketing that would involve the restaurants. And there was that element of independence that’s different when it’s a franchise versus when it’s an owner operated location.

But maybe I should back up to talk about why did my father own Purdys? It was interesting because he had gone to university and didn’t seem to be his thing so much. And then he got his machinist ticket, and he worked in production sites and lived on a street where there was another man who had immigrated from England, got off the boat and said, “What’s the best thing I can do to be successful?” And whoever he asked, they said, get your CA. So, he got his CA and then he was working with IGA stores, and Eric found or heard of this little chocolate company that was up for sale. And he said, well, “I’ve got my CA and I understand retail and I’m looking at Charles up the street, who understands production and construction, so maybe we’d be a good fit.”

So, the two of them each had $10,000 that they could put towards this. So, they went to the bank to borrow $100,000, because that was the rest of the purchase price – $120,000. And the bank said “We don’t think this is a very profitable company. No, we’re not happy to lend you any money.” I guess Charles went to his father and said “Can you help us out?” And my grandfather guaranteed the loan, which I learned only a few years ago, was about 75% of his retirement income, which is just huge. Thank goodness my father did well, so that my grandfather could also do well and be okay and retire.

Then Eric and Charles took on the business. And my father is fond of saying there was a number of older men at the time running other chocolate companies, and they were the young whippersnappers at the time.

 

Jason Boudreau:

How old would your dad and Eric have been at the time?

 

Karen Flavelle:

I think dad was about 33 or 35 and Eric would have been just a few years older, and dad had three kids and one on the way, so it was lots of risk and responsibility. He and Eric grew the business, dad was the President of the company and Eric was still doing the accounting for IGA stores, so he was not working in the company, but he was a board member. There were four stores and a 3,500 square foot factory at the time. When I arrived, it was a 57,000 square foot factory and 44 stores. So, they built a lot and there were no more of those older competitors. They’d built a good reputation for the quality of the chocolates and the company’s culture. Like I said before, employees were very important to my father, so that was clearly a big part of it. I arrived in 1994 and we negotiated for five years and there were some things that were important to me and one of them was that I just assumed I would be buying it. It never occurred to me that it would be gifted to us, but I wanted to buy it on my own, not with my siblings, because I was going to be the only one working in the business and operating it. I didn’t want the complication of having to run decisions by other people. So that was one and dad was fine with that. I don’t remember that being something that we had to negotiate, particularly. Another one was that I thought that I should own it after I had paid for 50% of it and dad was a hard no on that one. He said I needed to pay 75% of it. I think that might have seemed a little unfair to me at the time, but that was clearly a hard idea for him. And now that I’m standing in his shoes. I can understand it.

 

Jason Boudreau:

Where was Eric at the time then? Had he left the business already then or was he still part of it?

 

Karen Flavelle:

That’s a key part. He was still part of it. There’d always been an agreement that, well, because my grandfather had guaranteed the loan –  Charles had 75% and Eric had 25%. And then part of that too was an understanding/recognition that the Flavelle family would be buying out the Wilson family or Charles would be buying Eric out. So, when I came to buy it, the first thing we did was have it valuated by Deloitte, the third-party valuation. And I always felt good with that as that dictated what the price was. Then I paid interest on the outstanding debt as well. But one of the good parts was dad had gifted us $500,000, because of the capital gain exemption, he had given each of us that amount of the business. So, that I think was also good because at a time when I was getting involved in the business, my siblings also got something. I always thought that was good and my sister did a great job of investing in real estate that’s I think been helpful through her life. So, then I set about okay how do I make this better? We stand on the shoulders of those that came before us, and dad and Eric had done a great job. And now what was I going to do? And the first thing was, sales had kind of stagnated for the past four years.

 

Jason Boudreau:

Still at 44 stores then?

 

Karen Flavelle:

Yes. And my job was now how could I spark them? How could I get them going? And I spent four months spending a day in each of those 44 stores learning the retail business because I really hadn’t been in retail before. And I certainly didn’t know Purdys specifically and I hadn’t been a big chocolate eater, really. So, who are the customers who buy chocolates and what are they looking for and what’s important to them and how can we provide that? There was a number of things that I noticed. One was the branding didn’t feel super clear in terms of the experience. And so I said, “Think purple. Everything has to be purple unless you give me a good reason why not.” As simple as table skirts in the mall. It needs to be a purple skirt with purple staplers and purple scissors and then of course, how we were designing the store was to be much more purple. Which sounds easy, but one of the challenges was at Christmas what the customer wants is boxes that are wrapped like Christmas. Purple is not a Christmas color, and so the majority of the store needs to look at the time red and green. Now it’s kind of more red and gold and then how does that how do you maintain the purple in your stores? And then because we fill the store so much with shelves of chocolate that are now all red and green or red and gold, how does a person walking by still know that that’s a Purdys store? So, we solved that of course with where we could have purple year-round. And where that grew out of is during those four months that I spent in the stores. I was also in malls, walking them, and observing other retailers. And I admired what Body Shop had done with their green because you could walk by a Body Shop at that time and that dark green, you knew what you were walking by. So that was part of the inspiration. And the other inspiration was a man who walked by our Chinook store, and he said, oh, “Where’s there’s this shop, this chocolate shop I’m trying to find their purple and I can’t find it.” And it was because there was no purple in the store, and it was Christmas, and it was all red and green. So, that was the inspiration behind “think purple”.

Then I also noticed that customers were looking for something about $10 and at the time we priced based on pounds, so 1lbs., 2 lbs., 3 lbs. And we didn’t really have much for about $10. So that’s where merchandising came in and creating things to a price point that the customers were looking for. And one of our goals became; something for everyone. So, when the 10-year-old comes in the store and wants to buy a Valentine for his sweetheart right up to the guy who buys the massive heart for his. And I remember standing in one of our stores, I think it was Easter. And overhearing a customer say, “Wow, there’s something for everyone.” There it was like, nothing better than to have the words that come out of your customer’s mouth! So, something for everyone. Kind of thinking a little deeper about each season because the seasons are critically important to us. Christmas, Valentine’s and Easter. And we do over 50% of our business in 10 weeks (about 2 and a half months). So, they’re very important to us. So, as I say, thinking a little deeper about what every customer might want.

One of the other things I noticed was we were selling some things that I didn’t really think we were probably making much money on, and they were put together by the stores, which we still do, but there was more of putting together by the stores without guidance that perhaps they needed. And when I came into the business, Charles’s and Eric’s view was, if I know what sales are, and I know what labor costs in the stores are, and I know what my dollars per kilogram are in terms of cost, then I know we’re good. And so, it was a really good, simple way of running the business and not spending a lot of administrative time on all the rest that you could, and that we do now. But I felt we’re getting to this stage where we need to know what each product costs. And so, when we’re pricing it, we know whether we’re getting the right price because I’m pretty sure some of these things are not that. And then to kind of educate the store staff, that mantra became value for the customer, value for Purdys. Because there was a bit of an overweight to pleasing the customer without thinking about what it meant for Purdys and whether it made sense for us to even do.

 

Jason Boudreau:

It’s hard to continue to bring value for the customer if you’re not getting value for Purdys.

 

Karen Flavelle:

Exactly. You have to create that balance, which is the fun part. It’s just really like a big puzzle with all these pieces that you have to figure out.

 

Jason Boudreau:

We use a very similar term in our business which is the fair exchange of value. That seems very much to resonate with everybody. So, I totally get what you’re saying there. I have a question for you about the stores – and correct me if I’m wrong, but one of the things I’ve noticed about Purdys is, in the malls in particular, they’re almost like a corner location or a pretty exposed location. I’m sure that’s by design. Can you talk a little bit about that.

 

Karen Flavelle:

Sure. Yes, that’s very much by design and it’s really two things. One, that center court location is when most of the traffic goes by because apart from those seasons, when we tend to be a destination, we’re more of an impulse and so we need to be where a lot of the traffic is going by and then secondly, we’re selling chocolates and ice cream, and if we don’t have that corner that has two sides, then we have to make a choice; Does ice cream go out front? Because that’s where the lineup’s going to grow? But then we’re not featuring the important thing that we do, which is chocolate. And we don’t like to make that choice. We like to have both sides. Cause imagine Valentine’s Day when people want ice cream and there’s lineups out the store for chocolate, it makes it difficult.

So, another one was on Valentine’s Day. Men would come in and they’d say, well, I want to get some chocolate for my wife. But she’ll kill me if I get her too much. But of course, then it also has to look nice, and at the time we were packing in cups without trays, so that means the chocolates are very tightly packed together and the overall box size isn’t all that big. And so, after that very first Valentine’s I said, “Okay, we need to have a Valentine heart that’s $10.” And I think at the time it was $17 or just shy of $20. So how are we going to get to a Valentine box that’s that same 6-inch heart for $10. We started sourcing the box because the box is an expensive box. We stopped sourcing it in Europe and went to China. And that kind of thing can be really hard operationally, because the purchasing manager is pretty happy with their relationship with the European box maker and you’re saying, “No, no, no, you have to go find new people in a country that you know nothing about.” So that was one piece. The second piece was putting in a tray, which meant there weren’t as many chocolates in it. But that’s because, like the man said, “She doesn’t want all that chocolate, it’s the gesture she wants.” So, we got to $11. And that Valentine’s went up 17%. So, that’s the fun part for me, is kind of figuring out those things.

That kind of growth within the stores that we had was going well. But then the question was where else do we grow? And we were in every mall that we wanted to be in, in BC and Alberta. So, what next? The view of the company had been, well, we can’t possibly go to Ontario because we control our shelf life very closely and we purposefully make it shorter than it needs to be because we want that as a part of every chocolate.

 

Jason Boudreau:

Keep the quality high, yes.

 

Karen Flavelle:

Yes, “It makes it a party in your mouth” as one of our customers said to me once. But we figured, well, actually it only takes three days to drive to Ontario. So, we can stay within our shelf life and open stores in Ontario. And that was a huge decision for me because I didn’t really need to grow for my sake if it meant flying five hours, and every trip to Ontario is at least three days. And so I didn’t really need it from me, but I knew that the organization needed it because people want to grow in their roles, and the only way they can grow in their roles is by the company growing and providing more roles and the other thing that was really scary about it was we’re not like a wholesaler where maybe you get some shelf listings and you see how it goes and if it doesn’t go well, you just pull your product off the shelf. No, we would be creating a chain of stores with 10-year leases. So, every time we build a store, we sign a 10-year lease. We want to sign a 10-year lease because it’s going to cost us a lot of money to build the stores because we have plumbing and all kinds of things as well. It’s not just racks on a shelf. But then say five years out, if it wasn’t going so well, now we’ve got stores that have a range of lease ending dates. If we pull the plug, we’d have to pay landlord fees, severance fees, we’d have all of that. So, to unwind it, if it wasn’t going well, that would be a huge deal. It was a very scary decision. But we went ahead, and we started to build stores in Ontario.

 

Jason Boudreau:

When did that start? What year did that start in?

 

Karen Flavelle:

I think it must be close to 20 years ago now and the stores did OK, but not the standard that we were used to. Actually, the other reason for doing this was realizing that our competitor there had, in our view, kind of lost their way and every single time I was in Ontario for conferences or things like that, I would ask people and of course friends, “Wwhat do you think of this other company” and they would say, “Oh, I don’t go there anymore.  I grew up with it, but I don’t go there anymore.” So, it was pretty clear that they had not captured customers’ hearts. And therefore, there was probably an opportunity for us to capture their hearts and our competitor in the West also noticed the same thing. So, we found ourselves both going to Ontario at the same time with our stores and that other competitor isn’t in Ontario anymore. There’s a lot to be said for tenacity, I guess.

 

Jason Boudreau:

Yes, no doubt.

 

Karen Flavelle:

I remember five or eight years in, I asked a colleague of mine whose business is in Scranton, PA, so another retailer of chocolate who makes their own chocolates. And I said, “Oh, it’s taking a long time to build volume to what we expect. How long did it take you to build in new markets compared to your home markets?” and he said 15 years and I said, “What, 15 years?” He said, “Yes. But Karen, remember. It also doesn’t unwind. There’s a lot of loyalty.” There’s a tremendous amount of emotion, which is what we love about our business is that Purdys are often given for to say thank you, to say I love you, to say, I’ve just got through a tough time or you just got through a tough time, here’s chocolates, and so there’s so much emotion. And for years we would call it memories, Purdys Memories and now we talk about creating connection and joy through the power of chocolate. Because it just seems so incredible that for less than $20 you can make somebody feel really good or feel better in a tough time.

 

Jason Boudreau:

And of course, as you know, with your dad, Charles, being such a long-term member of the Rotary Club of Vancouver and I’m the President this year, every week we celebrate people’s birthdays and Purdys has been giving us chocolates to give to everybody on their birthday or to celebrate their birthday each week. It’s like you win the lottery if you’re sitting at the table of the birthday person because the chocolates show up and it gets shared around the table and it’s just one of those things and every week it happens and every week it’s like a new experience. Every time. You’re right. It’s so emotionally charged and it’s a really neat connection for sure.

 

Karen Flavelle:

Yes, it is. And that I think was born out of how important Rotary has been to Charles over the years. It’s been an important part of his life.

 

Jason Boudreau:

So now we’re in the mid-2000s, and you’ve expanded into Ontario, and you want to continue to grow. Where are we at in terms of the growth cycle? You’ve gone from 44 stores; now where you at?

 

Karen Flavelle:

We were over 82 stores in 2017-2018 and we’re about the same now. There were a few stores that we closed during COVID and then other ones that we’ve opened up. So, we’re now in Winnipeg and Saskatoon and a few other suburbs of Calgary and Edmonton and Prince George. So, we’ve expanded into some smaller markets and then this year expanding again into some smaller markets, that seems to be the main opportunity and continuing to grow Ontario. So, it’s doing much better now.

It was interesting during COVID because Ontario was much stricter than BC. So, we all had the four-month closure of COVID, which was a nightmare, of course. But it was a nightmare and a blessing. The nightmare part was about 10 days before the end of the month – what are we going to say to the landlords this time? How far can we push? What are we going to accept and what are we not going to accept? And it was like a new negotiation every single month. So, that part was hard. Closing the stores and initially thinking that it’d be about two weeks and we paid all our staff and then realizing it wasn’t going to be two weeks and how do we handle that. But when we closed the stores, we emptied the stores of all of the chocolate. And we did that in Ontario as well. And then in BC, there was really just the one closure and then we went back, then in Ontario, there was a second one. At one point, the landlords, when we were opening up for the second time, they said, what’s with you guys? How come you’re not open already? And we said, “Well, because we didn’t just leave everything there. We took everything out and now we’re starting from scratch.” And it seems as though the customers noticed that too, that they noticed when they walked by our competitor, there was still chocolate in the stores, even though they were closed for weeks and weeks. So, we noticed a real bump after that. So that pushed us to a new level, which is great. And then I think it’s just such a traditional gift that, as the generations turn over, that’s also where our momentum in Ontario is. Because we’ve been there close to 20 years, that’s essentially one person who was a child who went, got an ice cream bar after soccer and then maybe got some chocolates at Christmas, they’ll come back to Purdys again as adults.

 

Jason Boudreau:

It is me! I think I shared with you that my first Purdys experience was at Richmond Center getting an ice cream bar. And I’ll never forget it. And every time I go, it takes me right back to being a kid.

 

Karen Flavelle:

It’s a wonderful parent/child memory together. So, part of growing to the level we are in BC, in Ontario as well, is those traditions and becoming the fabric of people’s family lives and relationships.

 

Jason Boudreau:

If we look at the business today and then we look at you and obviously your family, and you and Jamie have grown kids, and this is a family business that obviously you took over. Has there been conversations within the family that you’re thinking about how you now move this legacy forward? I’m sure that there are and just given sort of the life stage of everybody, maybe can share about some of that experience that you’ve had.

 

Karen Flavelle:

So quite a long time ago, the kids had been in high school, I borrowed most of a document from that same Scranton, PA colleague. The document being a family employment guideline. But I changed a couple of things. I said, as he had, you have to go to university and then his was you have to work two years outside mine was, you have to work 10 years.

And the reason for that was because I had worked 12 1/2 years outside before I joined the business, and I felt it was important that whoever came in understood what I called the sandwich manager. Meaning you were the leader of a team, and you report to someone. So, you have to keep your boss happy but also you have to keep a team happy, inspired and motivated. So, all three kids went to university. And our youngest one was a geoengineer who graduated during 2016, which was not a good year for mining and getting into that field. And so, he joined PwC management consulting. And then when COVID hit, he happened to be in Vancouver and I was also struggling. As I said maybe earlier, finance and accounting is not my strength. I’m more a marketing person. So now I’m trying to figure out with this very lumpy revenue that we have and buildup of inventory. What does this mean for cash flow? We have all our stores closed. What does this mean for cash flow? And my CFO at the time was giving me large spreadsheets of information and I’d learned from one of my board members -I had a board for four years- and the one who was the finance representative said to me, “Karen, you need to have info, insight, initiative.” And so, I was thinking, “Okay, I’m getting lots of info. Where’s the insight?” My CFO wasn’t understanding what I meant. And then Jamie said, “Well, Scott, why don’t you just go and help your mom for a few days.” So, he came in and he it all in one chart that gave the insight, told the story, and then I felt like, okay, I’ve got it. We’re good for now. Here’s where we need to be concerned. If things don’t change. But I understand where we’re at.

 

Jason Boudreau:

So cool.

 

Karen Flavelle

Yes, very cool. And then he ended up staying, and it was a tumultuous time. I said earlier, COVID was a nightmare and a blessing. The nightmare part was the landlord part and I have to say, Cadillac Fairview, much as we’ve had other challenges with them over time, they were great in working with their retailers through COVID and they kind of led the way for other landlords, so they deserve a shout out about that.

The blessing was that we didn’t have a good structure heading into COVID. We had managers reporting to Vice Presidents. We didn’t have a middle layer that we should have had and we had some roles that I didn’t think should be VP roles, but they’d become that. And then how do you change that when you have incumbents in the role? That’s really difficult, and it isn’t anything about the incumbent, it’s more about not having the right structure. And I was kind of thinking, it would be great to have one person responsible for the whole thing, because then there’s one vision of the whole thing. Then our CFO decided to leave and a lot of people left, but it gave us the opportunity to make two of those positions Director positions instead of VP, which was a much better structure. And also elevate to another position so that we ended up with three Directors. And then we recruited a new CFO and IT Director. But in the interim, Scott, my son, took over IT because there was no one, so it was fantastic for him to have that opportunity and for Purdys to have him do it. And he did a great job of restructuring it because the previous person had 17 people reporting to her, which doesn’t tend to be a good structure. It was kind of interesting, we’d hired a family advisor 5 1/2 years ago, and so when I was looking for the CFO, she said, “I know someone who could be good. In fact, I know two people.” So, I interviewed the two and it seemed pretty clear that one of them was actually more president, which I also was looking for. So, the two of them who didn’t know each other, joined around the same time and have just been fantastic.

 

Jason Boudreau:

And she obviously knew you probably more personally and at the family level and how you operate, how you think, and that can really help determine a good fit as a person, not just in a role.

 

Karen Flavelle:

Yes. And she’d worked with the CFO at a company she’d previously been involved with. She knew of the other person through her husband and his part in the business. So that worked out extraordinarily well. And the three of them, the CFO, President and my son worked together super well. Before Scott even joined, my chair of the board at the time had met him at a board dinner before and said, “Wow, you think he’s 40. You have to remind yourself he’s 26” and he’s now just turn 30. But he has a number of great skills, like being able to just see have a whole lot of information and then pull out the key poignant parts is one of his skills, which is a fantastic skill for anybody to have much more numeric than I am, which is also fabulous. And then our CFO’s done a great job of understanding the operations, and when to pushing back. Which not all CFO’s will do. And understanding what an owner is looking for, I think that was the thing that was missing before too.

 

Jason Boudreau:

Kind of sounds like the dream team here.

 

Karen Flavelle:

It is. And then Lawrence, our president is also a CA. So, we have a lot of strengths on that. But what he’s great at, is being a servant leader. So, great at motivating people. People have said this is the best Purdys has been ever so, it’s pretty great.

 

Jason Boudreau:

So, as we’re closing out the conversation, we’ve talked about Purdys continuing to capture the hearts of their customers, where do you take that into the future with this dream team setup, where do you see for Purdys over the next decade?

 

Karen Flavelle:

One of the things Scott and I did was a principles document, because when I put the board in place, what I was hoping for was that they would help me create governance. And I realized actually, no, that’s not who creates governance, I need to create that. And Scott was very helpful in the early days of COVID with that principles document. So that is all the things that need to stay the same. We will be purple. We will always be top quality. Why would you go down the street to a special stop shop if it’s not special? It needs to be special and a number of things like that. So, some core things need to stay the same and then growth is a little challenging right now. Do we go to the Maritimes, which is a much farther distance, both in terms of shipping and overseeing supervising. So that’s one we’re kind of figuring out. And, for me, that’s their job. My job is ensuring a very smooth family transition. We definitely see Purdys staying part of our family and Scott is on a journey to be the leader of having that happen. So, we’re super excited about that.

 

Jason Boudreau:

Karen, if you can share about philanthropy as a family philosophy, how it’s evolved over time, and then what your vision for the future is and share with listeners, what are those key philosophies or principles as you mentioned that govern that that side of things for you?

 

Karen Flavelle:

I think the first thing about philanthropy is to do what you’re passionate about and where you want to give back. My father and Eric were passionate about music. A lot of Purdys’ giving was to Symphony and chamber music and chamber choir. And I started to tell them pretty early on, “Just to let you know, I’ll be shifting things because my passion is actually helping kids that don’t have the opportunity that I’ve had”. And so that was that’s remained kind of a core basic, the area that I’m most interested in, but I also didn’t want to suddenly cut off the tap for these other organizations that had depended on Charles and Eric for a long time.

It also was super important to us that; where do we get chocolate? We get chocolate from cocoa growing communities. That are subsistence farming in a lot of cases. What can we do to help that? And the first step was in 2007, getting involved with the World Cocoa Foundation and then doing more on our own through wind rock. But then we really wanted to be able to say not just help these cocoa communities, but also every chocolate you put in your mouth is from sustainable cocoa. And so that’s what we move to now.

Then there’s the Purdys side and the Flavell family side and the Purdys side is; purple partners, multiple pillars… So BIPOC communities, women’s empowerment, children and youth facing vulnerabilities, which is what I spoke about a minute ago and the LGBTQ community. So that’s kind of Purdys’ pillars and then I’ve been a donator for a long time, but probably the first one that I started to make more substantial contribution to was “Take a Hike.” So again, it’s children with vulnerabilities and Dress For Success is helping mothers who are trying to go from welfare and poverty and on the street to a job and helping them look good and how to go to an interview. But it’s helping the children, because your mother needs to be able to take care of you. And then our biggest so far has been to BC Children’s Hospital, where we’ve named a park and the thought was the park is somewhere where the child who’s in the hospital, and not able to do normal things, can be a normal kid outside in their wheelchair or whatever. But their siblings can be there, and their parents can be there and in an outside environment because our family is so outdoorsy.

 

Jason Boudreau:

if you were thinking about a conversation, you were going to have, let’s say, with your kids, I’m sure you have these conversations ongoing, but your kids or other young people, what would you share with them about? I know you mentioned about picking what you’re passionate about and focusing on It. Is there an approach to take with philanthropy makes it sustainable or there are there approaches that you think work really well that you would share with younger people beyond just pick what resonates with you or pick what’s close to you, but how do they make giving back part of their fabric?

 

Karen Flavelle:

To whom much is given, much is expected. So, it’s kind of that philosophy of we’ve been very fortunate. And so, I don’t really want to say duty or obligation because it needs to come from the heart and should be something that you want to do. So, it’s really just a philosophy of that’s part of what we do and encouraging them to be part of those kinds of opportunities and in the way that they want to do it. And of course, it’s not just money, it’s also time. So being part of things with volunteerism and that kind of thing.

 

Jason Boudreau:

Well, Karen, thank you so much for being here today. It’s been a wonderful conversation. Really appreciate you taking the time. I’d offer you a box of chocolates to say thank you, but that might be a little redundant in your world. But again, just really appreciate you being here and sharing the very cool story of Purdys chocolates and we look forward to seeing what the future holds and I look forward to continuing to be a loyal customer and you capture my heart every time I’m in there, whether I’m just an impulse buyer, which is most of the time for me, or of course, in the holidays. So, thanks again for being here.

 

Karen Flavelle:

Thank you. Thanks very much for having me. It was a great conversation.