Steinberg: The Breakup of a Family Empire

Robert W. Sexty is a professor of Business Administration and Commerce
at the Memorial University of Newfoundland and author of Canadian
Business: Issues and Stakeholders.

A survey conducted in 1990 by the Canadian Association of Family
Enterprises found that 28.6 percent of family businesses make it to the
second generation, and only 6.7 percent go on to the third generation.
The principal reason for businesses not remaining in the family is
management succession: in some cases, no family member is available; in
others, no member is groomed as a successor. The latter situation
existed at Steinberg Inc.

The first half of the book provides background on the Steinbergs and on
the growth of their retailing and real estate business—to $4.5 billion
in revenues with 37,000 employees in 1988. The material is not a
complete corporate history or a biography of the person responsible for
building the empire, Sam Steinberg. Instead it provides the setting for
the book’s second half, which describes the breakup of the family and
the business after Sam’s death in 1978.

The second half details the family feud, the bidders for the empire,
the Quebec government’s involvement, and the maneuvering among
everyone involved in the breakup. A description of the winner, Michael
Gaucher of Soconav Inc., is given, and an epilogue gives the status of
the corporation, family, and executives after the takeover. All that
remain of the Steinberg empire are bad feelings and some franchised
grocery stores in Quebec, a sad ending to a very successful family
business.

The authors had covered the breakup of Steinberg’s as reporters for
the Montreal Gazette, and realized that the drama of the family feud and
the takeover attempts were not being captured adequately in newspaper
stories. To write the book, they built on their journalists’ knowledge
of the breakup, supplementing it by interviewing dozens of Steinberg
employees, executives, and family members. The 14 chapters are
accompanied by a family tree diagram, a chart of the ownership
structure, 12 pages of pictures, and a list of sources (including the
individuals interviewed).

This story of the corporate and family breakup is so well told that the
book won the 1991 National Business Book Award.