FEEBACK
RISKY BUSINESS
In our July/August issue, Jacquie McNish chronicled Heather Reisman's development and eventual sale of Indigo's e-reader, Kobo, to Rakuten Inc., Japan's largest e-commerce company. There were two main threads to the comments by readers. The first thread suggested that money rather than innovation ensured that Reisman succeeded where others failed. Consistent with Malcolm Gladwell's Outliers, the only lesson I'm taking is that if you've got a ton of money to throw at things, eventually you might come up with a winner. Sure, there's the "don't give up in the face of adversity" thing, but that's also easy to do when you've got money, said one commenter. But there were many who applauded Reisman for her foresight. One noted that you have to appreciate that she rolled the dice and won on the Kobo. The Canadian retailing landscape is lucky to have Chapters and Indigo; otherwise, we'd just have a handful of dying independents and Amazon. Another wondered why Canadians would prefer to buy from Amazon rather than Chapters. Shouldn't we support Canadian companies?
LEADER OF THE PACK
Sean Silcoff's story about consumer products manufacturer Dorel's purchase of high-end bike maker Cannondale Corp. had readers debating bikes and bike shops. One commented that I am a bike commuter but will never shop in a specialty shop. The condescending attitude is unbearable. Thanks, Dorel and Schwinn, for making bikes for the rest of us. Others took exception to this view. Specialty shops sell to commuters too, and most high-end bike riders also own a commuter bike, said one reader. Another suggested we should pick better bike shops. Bow Cycle in Calgary is awesome.
E-mail us at robmagletters@globeandmail.com with the name of your favourite bike shop.
...FOR THE HONESTY
It is unusual for a CEO to be critical of his company's No. 1 ranking in any category, but one of Manulife's core values is trustworthiness, so I am compelled to comment. Your ranking of the 100 largest Canadian companies by total revenue in your annual Top 1000 issue could be misleading to readers.
Investors often assume that revenue comes from sales to customers, as well as income from investments and other sources. But mark-to-market accounting rules require insurers to include realized and unrealized gains or losses on bonds and other assets in their revenues. The value of these assets swells in times of low interest rates and exaggerates revenue growth. When rates go back up, the opposite will occur.
Excluding the impact of mark-to-market accounting would provide a better sense of recurring business growth, and a more accurate comparison with other companies. By our calculations, this would lower Manulife's ranking slightly, but still place us very respectably among the top five in the country.
Donald A. Guloien
President and CEO, Manulife Financial
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What you were reading on the web this month
25% / The Top 1000 charts
23% / Inside the Kobo deal that netted Indigo $165 million
20% / Big Insurance worries about the future
18% / Cyclists are warming to Dorel
10% / Enbridge's retiring CEO wishes pipelines weren't such a hot topic
4% / Other
