(First published Apr. 6/98)

The name is Péladeau. There are many of the same interests and drive. There's even a little family resemblance.

But as much as he admired his late father, don't expect the new head of Quebecor Communications Inc. to be a duplicate, either in management style or priority interests, of the man who built the $7 billion empire known as Quebecor Inc.

When death claimed the late Pierre Péladeau, builder of that empire, on Dec. 24/97, he had already been in discussions with his oldest son Érik to take his place upon retirement as head of Quebecor Communications Inc.

Communications is the smallest in terms of revenue of the three companies that make up Quebecor Inc. (Quebecor Communications, Quebecor Printing Inc., and Donohue Inc), but it's by far the most diversified and visible at the consumer level. And holding the base - newspapers - on which the worldwide company had been built, it was special to its founder.

It consists of four dailies: Le Journal de Montréal (North America's largest French-language daily), Le Journal de Québec, The Winnipeg Sun and Sherbrooke's The Record; 50 community newspapers; entertainment and alternative weeklies; women's, renovation and decor magazines including fashion mag Clin d'oeil; partnership publishing; book publishing; distribution houses; retail operations specializing in music (recordings, instruments and sheet music); and Télévision Quatre Saisons. Running in synergistic operations with these is a Multimedia company that offers everything from CD-ROMs, websites and electronic forms, flyers and catalog printing to Internet and Intranet connections, and interactive solutions for technical reference bases, education and corporate communications.

"I don't know when I would have taken over," says the new chairman. "I don't know if my father would have ever retired. But he wanted me to get more involved. We were in the process of clarifying my role, because I didn't want to accept the job taking decisions and, two days after, have my father send a memo to managers to go in a certain direction. I wouldn't work that way."

Despite the need-to-control aspect of his father's business style, Péladeau misses both the special bond he had with Pierre as the oldest of his seven children, and the daily rapport he had with him as a friend and someone he challenged on a regular basis. Pierre had made sure that Érik knew the business inside out.

Started from Scratch

"He wanted all his sons and daughters to start at the bottom of the ladder," says Péladeau. "I started working here during summers when I was 13. I worked on the trucks, presses, advertising sales, accounting."

A graduate of École des Hautes Études Commerciales, he has worked as assistant to Charles Cavell, president of Quebecor Printing, and can claim, among many accomplishments, responsibility for Quebecor's first acquisition in France, launch a plant in India, a market study in China, getting Quebecor into the Smart Card business in Mississauga and, in 1994, launch of the Multimedia division, "to be sure that Quebecor would be in the sector of the future by the year 2000."

He also, in the mid-1980s, had left the company to take over Groupe Lelys, a bankrupt printing plant specialized in labels. "I wanted to prove that I could do something on my own, without my father," he admits. "Having him as a boss and mentor wasn't easy all the time, and I wanted to fly on my own." He stayed four years, then put a general manager in charge. Groupe Lelys is now within the Quebecor fold, doing well, and its sector is among those where Quebecor would like further acquisitions.

Péladeau likes his job. Content interests him: content in newspapers, in magazines, other media.

"And I'm more public relations, more people-oriented than my brother," he says, referring to Pierre-Karl, executive vice-president of Quebecor Printing Inc., managing director of Quebecor Printing Europe, and vice-chairman of the board of Quebecor Inc. and Donohue Inc. "I like advertising sales. Pierre-Karl is a lawyer, more by-the-book, more structured, more business oriented. My father was a mix of both: a good PR man but he could be very tough."

A $1 Billion Goal

That's not to say that Érik isn't business oriented. In fact, while Quebecor Communications had the best year in its history in 1997 with revenues of more than $500 million, his personal goal is to make that figure read $1 billion in three year's time.

He'll be doing it through product improvements, improved management structure and, where possible, mergers and acquisitions. And he isn't thinking just small companies. "Publicor and Maclean Hunter Publishing with its $200 million in sales would be a natural for us, but Mr. Rogers (Ted Rogers, president & CEO of MH-owner Rogers Communications Inc.) isn't a seller." Further, mergers need two partners, and "I don't think Rogers is interested at the moment."

Nevertheless, mergers and acquisitions in the magazine sector are one means of growth to consider in the future. First, though, Péladeau is using his skills as a 'people person', fulfilling a promise he made that he will get to meet the people in every one of the companies and divisions under his responsibility, to listen and exchange ideas on where they see the company going.

The one sector he's least familiar with, and learning about, is retail. Communications is concentrating on large scale Archambault outlets with their music products, videos, books and newsstand publications. It's closing smaller scale Globe Musique stores, because, he says, consumers want wider choice. An eighth Archambault will open in Brossard in June, and the company will have its own website this summer, selling CDs, books and other products on the Internet.

Management Style

With responsibility for such a diversified product mix, Péladeau is developing a management style of his own, wanting to allow his managers more decision-making power and developing synergies between products.

"My father's management style and mine are two different worlds," he says. "My father was controlling everything. He had four presidents at Communications in the last 10 years and no one of them was able to do the job properly, because he was the boss.

"My style is different. For example, Maurice Daigle is the president now, and he has a job to do. So I'll judge him on what he is doing. I won't interfere in his decisions, but if he wasn't doing the job properly, then I would take action. I do follow-up on what I'm asking of my president, and I take care of certain other sectors myself, looking more for acquisitions while Maurice is more into the operations.

"I've created two new divisions in Communications. We didn't have any purchasing department and there was a need. And I'm taking care of a computer sector and internal verification so we're sure to have proper figures. The rest is handled by Maurice and the managers. My role is more to see where we're going with Communications, and to talk to potential players for mergers and acquisitions."

Family-Oriented

Also keeping him busy are his roles on the Boards of the other Quebecor companies and several non-related firms; as head of the Péladeau family; as father of a son, Didier, 17, and daughter, Daphné-Gabrielle, 14; and as a new fiancé.

With his sisters Isabelle as vice-president of Publicor magazines, Anne-Marie balancing duties as a mother while handling projects at Publicor, Esther working part time in the legal department and embarking on university studies, and younger brothers coming up, Quebecor is a family business. It seems likely to be where Didier will have a career. He has already worked summers at Lelys, at a Cyberbistro, and this summer will likely work at an Archambault outlet. He also shares his father's passions for golf and fishing.

"I'd like my children to be involved in the company, but I won't force them," says Péladeau. "My daughter is at an age where she prefers to hang out with her friends, but who knows in the future," says Péladeau. "The one thing I wish I had is more time to be present with my kids. My father wasn't there for us. It's hard to have a personal balance, but I'm working on it .

"I'd also like to get out and play more golf. It's a good way to get involved with customers and potential partners."

But work claims most of his time. Each division within Communications is being examined, improved, changed where necessary.

New Editor

For example, within the newspapers, Paule Beaugrand-Champagne has just been lured from her position as associate editor-in-chief at L'actualité to become editor-in-chief of the Journal de Montréal. The paper, whose total advertising sales and circulation combined reach more than $100 million annually, has its own website (http://www.journaldemontreal.com), which gathers more than 200,000 hits per month. In addition, its newsroom computers are now Internet connected, as will be, eventually, the sales department.

Several new sections and columns have been introduced, including, since March 22, a 24-page colorful home section running in Sunday editions. Another addition is a sex column.

"We have to keep updating and finding things to attract younger readers," says Péladeau.

"We're also looking for new ways to reach the banking sector and brokers. The paper is weak in attracting national advertising from this sector, and from the prestige automobile manufacturers."

Acquisitions and Mergers in Growth Plans

To manage and develop more synergies between Quebecor's dailies, Péladeau expects to appoint a vice-president newspapers, a new position. And he's looking at acquisitions, possibly on the east cost of the U.S..

"We must go outside the province for growth," he says. "95% of Communications revenue comes from Quebec."

At the magazine level, titles are being reviewed. Péladeau is waiting for a report on each publication before making any moves.

"The magazine sector isn't having an easy time right now," says Péladeau. "There's more competition." For example, Filles d'aujourd'hui , long Quebec's only magazine for teenage girls, now has at least two competitors. It, too, has its own website, managed within Publicor. The Filles d'aujourd'hui, Archambault and Journal de Montréal sites will all be linked to create, he says, "a critical mass, so we can keep visitors on our site and not lose them."

The company bought two more book publishing companies last year, and is looking for more from among the numerous publishers in Quebec. Péladeau also sees lots of room for expansion in the multimedia sector, again possibly through U.S. acquisitions.

Communications is just digesting its TQS acquisition and Péladeau is learning more about the TV sector.

"The buy of TQS was my father's move," he says. "The family wasn't bullish about it." Now that it is part of Quebecor, however, there's determination to make it a success. "We want to keep it simple and make money. Our goal is for it to break even in 1999, doing it by keeping close to the masses and reducing costs. We've already changed 80% of management, and all programming is under review. "

The same situation exists throughout Communications, with Péladeau familiarizing himself with each business and assessing the potential for growth, mergers, involvement of multimedia to create synergies, and other aspects. It doesn't give him much time to get involved in the many philanthropic efforts with which his father had been involved, nor in the music and arts sponsorships with which he was associated.

Péladeau leaves these to his sisters' management. But he has already agreed to give a speech at one event to which his father had committed himself, and expects to be involved with some major fund-raising efforts.

He says, "My father was a mentor. I have big shoes to fill. Our family can bring positive things to people. If we can improve Quebec and Canada, why not?"