How to get rich the crazy way

From the archives: How Honest Ed’s insane-sounding business tactics helped him outsell every discount house in Canada


 

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    Starting from scratch ten years ago, a self-effacing Toronto shopkeeper who calls himself Honest Ed has built up the sales of his cut-price department store to roughly four million dollars a year. His turnover, per square foot of trading space, is twice the Canadian retail average. And he has achieved this success by breaking some of the most sacred conventions of commercial enterprise. While other tradesmen aspire to a reputation for sanity, rectitude and sobriety, Honest Ed carefully fosters the rumor that he is a nut, a rascal and a drunk. Even the trade name Honest Ed was chosen because it conveys a hint of the charlatan.

    Honest Ed's emporium at Bathurst and Bloor Streets in a shabby, teeming, polyglot quarter of Toronto, looks like the backdrop for a vaudeville skit on the manners and morals of bargain hunters. Bursting with merchandise, throbbing to canned music, and quaking under the tread of up to seven thousand customers daily, it consists of four ramshackle houses knocked together, painted white, and decked with gaudy lights, gross caricatures and ribald slogans.

    One of the outside posters screams: Come This Way You Lucky People. Another yells: We Open Late Because Our Staff Sleeps In. A third bawls: Honest Ed Has A Kind Face —The Kind You Want To Throw Rocks At. Just inside the main entrance is a huge blownup photograph of a skidrow bum who is baring his rotting teeth in a yack of crazy laughter. Below this stunning portrait is the announcement: Honest Ed Welcomes You.

    As they recover from the shock of the picture many customers try to guess who Honest Ed is, and what he is like. Mrs. Pearl Mackenzie, the senior sales clerk, divides the speculators into three groups. “Some of them,” she says, “really believe that the picture over the door is that of the boss. Others, who are not so gullible, think he is a queer old man with a skull cap. bifocals and a beard. The more cynical customers think he is a sort of carnival barker with a flashy suit and a brassy voice."

    In common with the rest of the staff Mrs. Mackenzie is uncommunicative when questioned by clients about Honest Ed's looks and temperament. She knows that the role of mystery man is a small but important part of her employer's policy.

    It's a policy that enables Honest Ed to sell furniture, clothing, appliances, cameras, radios. toys, hardware, sports equipment, china, confectionery, candy, tobacco and scores of other items, including an occasional sack of potatoes or fifty-pound bag of fertilizer, for between one third and two thirds of the usual price. Although Honest Ed is only one of thousands of Canadian discount dealers, he is probably the most successful.

    A few weeks ago at Honest Ed's you could buy a $29.99 man's suit for $8.88; a pair of $5.95 men's pants for $1.51; a lady's $6.95 cardigan for $2.99; a $39.95 camera for $29.95; a $3.95 deck chair for $1.51; a $15.95 golf bag for $5.49; a $2.99 carton of cigarettes for $2.77; and hundreds of other items at similar discounts.

    Bargains like these are offered in an atmosphere of robust comedy. His technique was epitomized six years ago when he offered for sale, at nine cents a pair, twenty thousand pairs of red flannel bloomers. They were discovered in the basement of an old Toronto warehouse which was being demolished; their design suggested that they had been lying around since the relief of Mafeking. Outside his store Ed clipped to a long clothesline a fluttering array of the most ample samples, each pair inscribed across the seat, in bold white paint, with a sales message. Persuaded by illustrated posters that the bloomers could be slipped over a pair of Ed's thirty-five-cent "leopard skin" nylon panties, to serve as winter snuggies, hordes of giggling women snapped up the lot in three days.

    With equal zest Honest Ed exploits the appeal of glamour. Last May he celebrated the Queen’s Birthday by opening on Victoria Day, a day when most other stores remained closed. Among many unusual bargains offered to people found standing on a pre-selected spot at a specific time was an all-expenses-paid-double-date with two of Canada’s most attractive TV personalities. For a fee of seventy-nine cents the woman winner was escorted to the dinner-dance at the Royal York Hotel Imperial Room by Showtime singer Bob Goulet, and the man winner, for the same fee, was permitted to take along actress Margo Mackinnon.

    To keep prices down to the level of his showmanship. Honest Hd eliminates the frills of what he calls “the service stores.” Instead of mahogany counters he uses benches built of orange boxes. Instead of laying carpets he lets his clients shuffle deep ruts into the creaking, bare, softwood floors. He considers fitting rooms a waste of space and tolerates the scenes and screams that arise from a furtive try-on of intimate garments behind a convenient rack of fishing rods or pallisade of rolled rugs. His business is strictly cash and carry.

    His staff of one hundred and fifty men and women let the customers help themselves and pay at a wicket on the way out. Every sale is final and customers seeking refunds or exchanges meet stony faces, and even though Ed sells the occasional chesterfield, armchair or set of bunk beds, he provides no delivery service. Patrons must get their bargains home as best they can.

    Every morning, six days a week, between two hundred and two thousand people line up outside Honest Ed's. Many of the women wear bandanas and many of the men wear windbreakers. But there is always a sprinkling of well-dressed people too. They are there in response to daily newspaper advertisements proclaiming the Morning Special. Each advertisement is printed under a slogan written by one of Ed’s customers in return for a daily five-dollar prize. Each slogan is required to darken Ed’s reputation. A recent one read: Honest Ed’s Been Taken Again—But His Goods Are Still On The “Most Wanted" List. Below the slogan the Morning Special is described. It may be a kimono, a can of anti-freeze, a girdle, a banjo, a beanie or a whistling kettle. Whatever it is the customers know' it will be selling for much less than the regular price.

    When the special is particularly attractive the crow'd begins to form two hours before opening time. Partly because he thinks nine-o’clock opening is a waste of time, and partly because a line-up is a powerful magnet to casual trade. Ed keeps his store locked until eleven o’clock.

    At this hour the doors are flung open by a clerk who springs nimbly aside to avoid being trampled by the incoming stampede. Entering the premises at a smart canter, jockeying for overtaking positions, and bickering in half a dozen languages, the customers thunder up an unsteady flight of stairs to the second floor, where the Morning Special is always displayed. Their pace and anxiety is quickened by a public-address announcer crying “Hurry . . . Hurry . . . Hurry,” and by canned brass bands playing such rousing numbers as “Colonel Bogey,” “El Capitán,” “Blaze Away,” and “Knees Up Mother Brown.”

    The scuttle for the Special counter usually is led by an agile little old lady who turns up every day, snatches every Special and then gallops off home to sell it to her neighbors at a small profit. At various times she’s been seen struggling onto streetcars, in face of protesting drivers, with a tricycle, a record player, a perambulator, a car battery, a bearskin rug and a shotgun.

    During the rush for the Special the air of crisis is heightened by more posters. One reads: Take It Easy and You May Get Outa Here Alive. Another says: If You Can Keep Your Head When All About You Arc Losing Theirs-—Then You Simply Don’t Understand The Situation.

    Periodically, as the scramble to pick up a Special proceeds, the music suddenly is switched off. The effect is so unexpected that many people stop dead in their tracks. Immediately the hush is cut sharply by a Dragnetish voice intoning over the public-address system: “Store Detective Number Eleven . . . Store Detective Number Eleven . . . To Station H . . . To Station H . . . Quickly, please . . . Quickly." Then, down one of the quieter aisles, a woman who thinks she is standing at Station H will replace surreptitiously on the counter the porcelain figurine she has hidden in her handbag. Actually there is no such person as Store Detective Number Eleven, and there is no such place as Station H. But Honest Ed finds that these occasional interjections of alarm and threat do much to keep down his heavy incidence of shoplifting.

    Buying the Special can be a Herculean undertaking. The sidewalk crowds often see people staggering out of Honest Ed’s under a heavy steamer trunk, a big brass floor lamp, or a garden chaise longue. The burdened flow from the exit cuts across the incoming line-up. Then there is much cursing, panting and sweating as customers toting deck chairs, stepladders and rolls of linoleum try to cleave a way through an indignant column of others who are afraid to lose their place in the queue.

    Four uniformed off-duty policemen receive $2.50 an hour each from Ed to control what frequently amounts to a cacophonous human whirlpool. Yet even they must sometimes aggravate the confusion by seizing a shrieking, struggling shoplifter who’s been nabbed at the wicket concealing an unpaid-for fishing reel, or wearing an unpaid-for Texan sombrero.

    On these occasions the commotion around Honest Ed’s resembles a speeded-up scene from a Fatty Arbuckle movie. But the uproar is so familiar to adjacent tradesmen that few of them take any notice. A salesman in Bond’s, a nextdoor men’s wear store, says: "If Tugboat Annie and Clem Kadiddlehopper shot out of Honest Ed’s carrying a sofa on their backs, with a posse of Keystone Cops in hot pursuit, hardly anybody around here would bat an eyelid."

    When the Morning Special is sold out, usually within an hour, many customers remain to inspect other merchandise. Although it is displayed crudely, in massive piles, they notice that it is scrupulously clean and brilliantly lighted by fluorescent tubes. As the pace of business slackens the “hurry up" music changes to such sweeter numbers as September Song. All the Things You Are, and Beautiful Dreamer. Honest Ed has proved that these tonal soporifics induce a desire to linger and increase the temptation to buy on impulse.

    Some customers get lost in the narrow alleys formed by high-piled stacks of blankets, sheets and towels. They realize then that out of hundreds of signs in the store only a few point an arrow to the Exit. Meandering through a sort of oriental market maze they smile at the sign: I’d Like To Help You Out. Which Way Did You Come In? Customers who resent having to carry heavy articles to the pay wicket are usually mollified by the sign: If You Think You Are Loaded You Ought To See Honest Ed. Generally speaking customers obey the warning: Please Do Not Bother Our Staff. They Have Their Own Problems.

    The eighty-odd women clerks are forbidden by Honest Ed from engaging in sales talk. They stand ready, in their neat blue uniforms, to answer questions, to guide customers to different departments, to help in the search of various sizes of garments, and to keep their eyes open for thieves. One elderly woman clerk who has caught many shoplifters is nicknamed Hawkeye.

    Ed chooses his clerks for their character rather than their looks. He believes in a strong deployment of jolly types. Typical of these is Mrs. Muriel Ritchie, a buxom, good-looking flaxen-haired woman in her late fifties who is known to her colleagues, and to scores of regular customers, as Blondie. She combines the glamour of Mae West with the mirth of Sophie Tucker and the strength of Hippolyte, the Queen of the Amazons. Once she frog-marched an overbold masher down two flights of stairs and tossed him out into the street as lightly as if he’d been an old beef bone.

    Ed’s clerks work a thirty-eight-hour week for what one of them describes as “a little more pay" than they would earn in a conventional store. They receive a three-week paid holiday after five years’ employment, and a fixed rising scale of Christmas bonuses. They also have a pension plan, a healthand life-insurance plan, and prospects of a profit-sharing plan now in preparation, and, according to one of them, “so much fun that sometimes we hate to go home.”

    Normally the girls go home at closing time, which is six o’clock on every day but Friday, when the store remains open until nine. Last February, however, when the clerks were asked to volunteer for work in the middle of the night, there wasn't a single backslider. This was the occasion on which F2d kept open day and night for seventy-two hours. People drove through blizzards from up to a hundred miles away. There were line-ups outside the store at two o'clock in the morning, despite snow. Between midnight and dawn the building was almost as densely crowded as it is during normal hours.

    To encourage nocturnal business Ed offered around-the-clock entertainment. One attraction was pretty, twenty-three-year-old Janet Benson, a trapper's daughter. She arrived with three husky dogs from a remote northwestern Ontario camp, wore a fur parka, and earned a handsome fee for permitting herself to be described as The Wilderness Girl.

    Another attraction was Phil Stone, a disk jockey from Toronto's radio station CHUM, who presented his all-night record show from a bed in the lighted window' of Ed's store. He w'as refreshed with coffee at frequent intervals by a beautiful model who, dolled up in black net stockings, a tutu and a little lace bob-cap, was billed as The Frisky French Maid.

    Every hour on the hour valuable prizes were given to customers found standing on secretly selected spots. Mrs. Carmen Eemcke, wife of the police chief of Shelburne, Ont., won the right to buy a mink stole for $1.98. Her husband, who accompanied her in civvies, blushed. He was uncomfortably aware of sixteen officers from Toronto’s Metropolitan force who were buying articles at the taxpayers’ expense to produce as evidence at an imminent prosecution.

    Edward A. Jeffreys, Honest Ed's general manager, explained: "We were charged later with breaking a bylaw which requires variety stores to remain closed between ten p.m. and five a.m. The prosecution thought that Honest Ed would plead not guilty and make a big song and dance of the case for the sake of the publicity. That is why they lined up sixteen officers to give evidence against us. But as usual Ed did the unexpected. He quietly pleaded guilty, paid a two-hundred-dollar fine, and left the disappointed prosecution to unload its unfired guns.”

    People who saw' Honest Ed in court that day were astonished at his appearance. His name is Edwin Mirvish. He is a forty-four-year-old man of medium height and good physique. He has handsome olive-hued features, jet-black hair and dark-brown eyes alight with shrewdness and good humor. He dresses expensively and conservatively and speaks quietly and incisively. In fact he looks rather like the ambitious young vice president of a bank.

    The oldest of three children, he was born in Virginia, where his father worked in a bar. When prohibition came, Mirvish senior moved to Toronto and opened a small grocery store. During the depression he fell on hard times. As each of them reached the age of fifteen Ed, his younger brother and sister had to leave school and help in the store. Ed delivered groceries on a bike.

    "It was then,” he says, "I developed my antipathy toward the service store. A woman would call me up to her house. She'd give me a sixty-cent order for groceries. She'd tell me to pick up cakes at the bakery on the way back, clothing at the cleaner’s, and toothpaste at the drugstore. When I delivered the whole load to her she'd promise to pay for the groceries next week. And then she’d break her word. Sure we were getting a mark-up on the groceries. But not on the labor.”

    When Mirvish senior died in debt the family, at Ed's urging, sold the grocery store and went out individually to work. Ed took a job in a supermarket. Shortly before the war he married and began hankering for a business of his own. The war gave him an opportunity. He opened a tiny ladies' wear shop in the front parlor of one of the old houses that now comprise his store.

    "I realized," he says, "that if I was to succeed against the downtown department stores I'd have to do the opposite of what they did. They were then selling for cash so 1 sold on credit. He built up a flourishing little business among munitions-factory girls. Shortly after the war he rented another room in the old house around the corner and sold here, at bargain rates, the dresses he couldn't move in his main store. By 1948 the sideline business was outselling the primary business. Ed closed the dress shop, concentrated on the bargain store, and began widening its range of stock.

    He bought a carload of fire-damaged Woolworth stock and put up the slogan: Name Your Own Price. No Reasonable Offer Refused. Then he sold ninety percent of his goods at prices the people offered. "Most people." he says, "offered a fair price.” That same year he began acquiring houses on Bloor and Markham streets. He bought eight altogether and says he's spent almost a million dollars buying and rebuilding them. It was in 1948 that he put up his first Honest Ed sign.

    Once again he looked to the downtown department stores for guidance. "They were now selling on credit," he says, "offering exchanges and refunds, putting up classy fittings, making deliveries, and introducing many other services which put up their prices. They were also advertising extensively to eulogize themselves and their merchandise. So I did the opposite. I sold for cash and cut out all services. In my advertising I knocked myself and my merchandise. I made myself sound crazy and my stuff sound like junk. People were amused. They flocked around. The reverse policy paid off.”

    It's doubtful that even wackiness on Ed's scale would have boomed him into the relative big-time without accordingly low prices.

    He obtains his cut-rate wares by methods known to most discount houses. He buys bankrupt stocks, fire stocks, and distressed merchandise or goods the owner is willing to sell cheaply because he needs cash urgently. Ed also buys "seconds,” or goods with a flaw, and garments that are cheap because they come in an incomplete range of sizes. Often Ed’s buyers visit orthodox department stores in Canada and the United States and purchase, for twenty-five or thirty cents on the dollar, lines that have failed to move and arc occupying space needed for more saleable items.

    Occasionally franchised dealers in brand-name goods approach Ed when they are in danger of losing their agency because they cannot maintain a quota of sales stipulated by the manufacturers. By taking the items off the franchised dealers’ hands, at cost, or at a tiny mark-up, Ed helps them to remain in the manufacturers' good graces, and. at the same time, enrages their competitors.

    Some manufacturers refuse to sell to Honest Ed because they don’t want the prestige of their goods to suffer and wish to protect their other customers from Ed’s underselling policy. Other manufacturers of brand-name goods, however, are glad to unload onto Honest Ed at bargain rates, unsold stocks.

    “There is nothing basically unethical in Honest Ed’s methods," says an official of the Toronto Better Business Bureau. “We have had one or two complaints about him but these were of a most trivial nature and he very quickly rectified them.”

    Sometimes, as a matter of pride, Ed goes out of his way to acquire well-known lines in a most uneconomical fashion. Recently he decided that it would be appropriate to feature Forsyth shirts. Forsyth wouldn’t sell him any. So Ed sent out sixteen of his young male employees on a foraging patrol. Pretending to be the leaders of college bands, and to require large numbers of shirts, they bought up thousands at a discount from retailers. Ed advertised the shirts for a few cents less than the customary price and cleared the lot in two hours.

    While he lives in a sumptuously furnished fifty-thousand-dollar home in Forest Hill Village, runs two late-model Cadillacs and looks like a fiction-story illustration of the ideal junior executive, Ed has one or two eccentricities which are in tune with the unconventional nature of his business.

    At the store, to keep his feet “on the ground,” he works in a minute, windowless rats’ nest of an office, far below street level. His door, at the end of a narrow corridor sided with cheap plywood, is open all day long to any employee who wishes to see him. In consequence his business conferences are interrupted continually by buyers entering to show him low-priced sweaters; by cashiers complaining of stiff keys on their registers; and by salesgirls weeping over ghastly turns in their latest love affairs. Recently, when he was discussing a big deal with an American jobber, a store carpenter entered with a large can of poison and the lugubrious announcement: “Excuse me, Mr. Mirvish. but I’ve come to fix the mice.”

    At home he keeps a caged mynah, an ugly, crowlike East Indian bird which excels the parrot in vocal imitations of human beings. Its specialty, vented once every ten or fifteen minutes, is a piercing wolf whistle which prompts Ed’s visitors to roll their eyes or engage in a concentrated study of the thick wall-to-wall broadloom. Ed usually excuses it by explaining: "When my wife comes downstairs in bobby pins in the morning that bird makes her feel good . . . real good.”

    Until recently Mrs. Mirvish. who has borne Ed one son, now fourteen years old, tried not to interpose social demands between her husband and his business. Now she is encouraging him to make up for the pleasures they lost during years of hard work together. At her insistence he goes off dutifully to dancing lessons at Arthur Murray’s.

    She is an amateur painter, singer and actress, and a social worker who endures with good grace the cracks to which her husband's business make her vulnerable. Recently, while strolling in Forest Hill Village she overheard one neighbor say to another in Yiddish: “There goes the wife of our local lunatic.”

    Ed’s mother, who is in her late sixties, still turns up every day at the store to work as a sales clerk. His bachelor brother, Robert F. Mirvish, sails the seven seas as a radio operator on an American freighter. During his off-watch hours "Bob” Mirvish has written five published novels of romance and adventure.

    Although Ed is rich he doesn’t keep all his money to himself. And even in his charity he is a little off-beat. Last Christmas Day he pounded the sleezier end of Jarvis Street for several hours, in a bitter wind, and handed out three hundred and sixty one-dollar bills to passing bums.

    The Hogarthian picture at the entrance to Ed’s store, the picture which purports to be that of Ed, is the portrait of a bum to whom Ed refers as Old Mac. OKI Mac used to make his beer money by sweeping the sidewalks in front of the store. For five years Ed permitted Old Mac to sleep in a basement below the store. Once, he even entrusted Old Mac with the job of the store's Santa Claus. Although Old Mac promised Ed he wouldn’t get plastered he broke his word. He was rescued by police from a beerparlor fight against belligerent sentimentalists who took exception to his drinking in Santa Claus uniform. When Old Mac died a few years ago Ed hung his picture in the store saying: “There but for the Grace of God . . .”

    Making the most of his good fortune Ed has combined under the tradename Mirvish Enterprises Ltd. many interests, including lucrative real-estate holdings and a plastics factory. This fall he will add to the present Honest Ed store a foil r-hundrcd-thousand-dol lar building. “But.” he says, “it will be no thing of beauty or joy forever. It will be a utilitarian cube, profiting from every inch of space, and not adding a nickel to the present prices of my merchandise.”

    To convince his customers that the new store will not entail any change of policy, Ed maintained, all last summer, an enormous sign outside the construction work. It read: "Honest Ed Is Throwing Up Three More Crooked Floors—For You.”

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