Gord Lownds was the driving force behind the phenomenal retailing success story of Sleep Country Canada in the 1990s. Now, the former musician is back for an encore performance, making the entrepreneurial leap from mattresses to hearing aids.

Lownds, the former CEO of Sleep Country Canada, is heading an aggressive new startup company, Listen Up! Canada, which is rolling out a new concept in hearing health care. The company is currently in the process of opening its first eight retail outlets in the Greater Toronto Area that will provide one-stop access to hearing testing, hearing aid products, services and education in a retail setting.

If Lownds, a former investment banker, has his way, hearing health care will never be quite the same in Canada, and you get the impression he won't rest easy until Listen Up! Canada is doing for its market what Sleep Country did for the mattress-buying market.

1. What was your first job?

Ken Kerr, Business Edge
Gord Lownds, former CEO of Sleep Country Canada, plans to do for good hearing what he did for a good sleep.

"I started working at 15 as a barker at a carnival, and found out at that point that I enjoyed working. I was also a professional rock musician for a couple of years, playing bass and guitar. Then, I started my legitimate business career with Consumers Distributing in 1970 in a warehouse and worked my way up to the management team there."

2. What training or experience proved to be most valuable in preparing you for your entrepreneurial career?

"The best training I've had was getting my undergraduate degree in philosophy. That, more than a lot of things, helped me to be able to analyse problems, put things into a structured environment or context, and develop and present compelling arguments. Then, the MBA training beyond that added the specifics in finance and marketing."

3. How did the concept for Sleep Country Canada get started?

"My business partner Steve Gunn (current CEO of Sleep Country Canada) and I were involved in investment banking, and one of the transactions that we had done was the leveraged buyout of the Simmons Canada mattress company. We bought that company in 1990 with the financial backing of CIBC Wood Gundy and the Mannix family of Calgary. Through our involvement with that, we focused on the fact that the distribution channels to the consumer (for mattresses) were not particularly effective. So, we decided to sell out ownership in Simmons in 1994 and set up Sleep Country Canada."

4. How did Christine Magee (current president of Sleep Country Canada) get involved with you and Steve Gunn?

"We had known Christine in her days as a banker at National Bank, where she was actually a lender for a couple of buyout transactions we had done. For a number of reasons, we were looking for a third partner who longer-term could take over and run the business on a permanent basis. She fit the bill on a number of fronts. I was convinced that she wasn't a lifelong banker because she had more entrepreneurial spirit than I would expect in a banker."

Ken Kerr, Business Edge
Audiologist M.J. deSousa and Lownds display hearing testing booth, where earphones play sounds into the patient’s ears and the console displays results.

5. How important was it to have Christine Magee as the personality promoting Sleep Country in advertisements?

"I think it was significant for a couple of reasons. Most of the people who make decisions about mattress purchases are women - about 75 to 80 per cent. Furthermore, Christine is not a hired model spokesperson, but a legitimate businessperson. And I think people recognize her for that. From a marketing point of view, I think people like to see a successful female running a business with some responsibility. Christine is also trustworthy, and it's all about building trust with the consumer."

6. To what do you attribute the rapid growth of Sleep Country from its inception?

"I think it was the ability to design a business that intentionally anticipates and solves all of the problems that a customer would have in a certain buying situation, and in that case it was buying mattresses. Whenever I design a business, I look at what an ideal shopping experience would be for the consumer, try and figure out what they would value most, and deliver that. The challenge that most folks have in developing a new business is that a lot of things operationally are difficult to execute. You may have a great idea, but there's a challenge in how to do it, and how to make money doing it. What we did at Sleep Country was figure out what the consumer really wanted in value, we figured out how to execute at the operational level and deliver, all of the things we thought were important. It was our commitment to finding the right people and the right solutions to do that really made the company successful. It is successful because it basically delivers what the consumer wants."

7. Why did you leave Sleep Country Canada in 1998 after four years as the CEO?

"We ended up selling the business in 1999 to Bain Capital. Basically, there were three partners - Christine, Steve and myself - and (Bain Capital) wanted to retain some management. However, I wasn't particularly keen on working for someone else, and at heart I'm an entrepreneur. I like building things. So I decided to cash out and move on."

8. How much cash did you sell out for?

"I can't tell you that. It's a matter of record that we sold the business for $90 million. I did quite well. We had some other investors in the business besides Christine and Steve, such as CIBC Wood Gundy and the Mannix family."

9. What did you do after leaving Sleep Country?

"I took a year off and did a lot of travelling. I travelled to Asia and spent a lot of time in some warmer climates such as Costa Rica and the Cayman Islands. I was travelling around, trying to find the perfect place to retire. I did some writing and became involved in music on a recreational business. I also spent some time advising folks - not for money but just for fun - who were involved in startups, or executives who wanted to find out how to retire but found themselves stuck in a treadmill type of thing. Eventually, I ended up getting involved with a very new television production company (Red Apple Entertainment Corp.) and ended up owning that. I still own that, but basically I have management run it, and I only spend an hour or two a week with that. It does quite well in a difficult industry."

10. Why didn't you retire?

"I think it was because my brain needed the stimulation of solving problems and creating stuff. I love creating things from scratch, and I like creating businesses because it's fun problem-solving, and I like to find interesting opportunities."

11. How did you get the idea for Listen Up! Canada?

"I wasn't really looking for Listen Up! Canada, but it happened because of a friend of mine (Kurt Lynn, one of the founders). He was a technology consultant and a marketing guy who I had done some work with. He developed Ménières disease, which causes hearing loss. In February of 2003, he and I were sitting and have a coffee when he told me basically the experience that he had in getting treatment for his hearing loss and buying hearing aids. He told me what an awful process it was. We both came to that sort of innocent conclusion that, 'Wow, there must be a better way to do that.' That was the wellspring to further thinking about the opportunity with that. We spent some time looking at the industry structure. I went back to my tried and trusted formula, which is asking what a consumer would want in an ideal purchasing situation, and we designed Listen Up! Canada around that."

12. Who owns Listen Up! Canada?

"It's a private company similar to what Sleep Country was. The Mannix family are involved (as investors). Steve Gunn and Christine Magee from Sleep Country Canada are also investors. We (he, Gunn and Magee) don't have a commitment to work together, but we're very happy working together and they liked the business idea. There are also some small investors. I'm the majority shareholder, and I've invested over a million dollars. We're well-capitalized. We have some deep pockets, we know what it's going to take and we're committed to the business."

13. What makes you believe that this business can succeed?

"There is a need for this type of business. The problem that Kurt had was that they sold him a product, but didn't tell him how to use it. That's similar to selling somebody a prosthetic device if they lost a leg, fitting it on to them, showing them out the door and saying, 'Good luck, I hope it works well.' But you have to go through a lot of training required for a medical device such as a hearing aid or a prosthetic. There's a lot of care that you need to take with a hearing aid. It needs batteries replaced, it needs to be dehumidified so that moisture doesn't build up, and there are various checks that have to made. We've found a need for after-care to help someone use the product. We guide and counsel people on use of the device."

14. Is your business model similar to that of Sleep Country Canada when it was starting?

"There are some similarities. We are using electronic media for advertising. Hearing loss still has quite a stigma attached to it and 85 per cent of people with a hearing loss in Canada currently don't wear a hearing aid. So what we're trying to do with our advertising program is to raise the awareness level in general about hearing loss, the fact there are good quality solutions out there and that it's not something you should be embarrassed with. It does affect the quality of life when you don't hear well. There's a great quote from Helen Keller. She was blind and also lost her hearing. She said, 'When you lose your sight, you lose things, when you lose your hearing, you lose contact with people.' People with a hearing loss are prone to anxiety and depression and other stuff."

15. Will Christine Magee be doing commercials for Listen Up! Canada as she has done with Sleep Country Canada?

"Absolutely not. One of the key differences with this business is that we're in the health-care business and, to be credible to the consumer, we feel we need to have the best-practices clinical model so that we're at the top of the food chain in terms of doing the right thing from a health-care point of view. We do have a chief audiologist (M.J. DeSousa) who is responsible for consistency of our hearing health care, and she's actually going to be the one who will be speaking to the public."

16. What's your long-term vision for Listen Up! Canada?

"We plan to open probably 50 locations across the country. We'll have 12 by the end of this year, and we'll add 10 to 12 a year going forward. Our focus is on going to major urban markets in Ontario, B.C. and Alberta. The vision is to become the dominant and leading provider of hearing health care in each of our markets."

17. What's the most valuable lesson you've learned in business?

"If you find the right people to build a business around, then life is wonderful. The biggest challenge is always finding the right people."

18. What's your view of the rash of corporate scandals we've seen in recent years?

"I think it's deplorable. I'm always surprised that people who are successful can get to the point where they think they're above the law. I wonder if it's greed, or if they get to the point where there's so much pride and arrogance that they don't think they have to live by the normal rules. I think it's a challenge for people who are successful to maintain a reasonable amount of humility and contact with the real world."

19. Are you hoping to have this business running well enough in four years so you'd be able to move on at that point, as you did with Sleep Country?

"Yup. I'm a creator, I'm a builder and I'm getting to the age where I'm not sure there's too many more of these in me. I like to get an idea, build it, build a management team around it, and let the management team take over and run it long-term."

20. And then you'll retire?

"Maybe. I found that I need intellectual stimulation, and business is where I get that. I love problem-solving, engaging my brain and the challenges. I do want to do some more travelling, and I'm looking forward to having grandchildren at some time. And I like to be useful to the community. I spend a good chunk of time sharing my experiences and perspectives because I enjoy doing that. I don't do it for money. I do it because it's fun and I like to be useful."

THE COMPANY: LISTEN UP! CANADA

* Brass: Gord Lownds, president/CEO; M.J. DeSousa, vice-president/chief audiologist; Michael Moore, vice-president/general manager; Kurt Lynn, vice-president, merchandising and technology.

* Profile: Listen Up! Canada is a provider of hearing health-care products and services, and is currently launching its business by opening eight storefront outlets in the Greater Toronto Area. The company offers one-stop access for hearing testing, hearing aid products, services and education and plans to expand to Ottawa, Hamilton/Niagara, Alberta and B.C.

* Flagship Toronto store: 1493 Yonge St. (slated to open April 29).

* Listen Up!: Studies have shown that approximately 40 per cent of hearing-impaired Canadians are between 45 and 64, but only 15 per cent of them have a hearing aid.

* Website: www.listenupcanada.com

* Corporate address: Suite 800, 1 St. Clair Ave. W., Toronto, M4V 1K7.

* Phone/fax: 416-925-9223, 925-9224; toll free 888-802-1388.

IN PROFILE: GORD LOWNDS

* Title: Co-founder/majority owner/president/CEO, Listen Up! Canada; owner/chairman of Red Apple Entertainment Corp.

* Born/raised/age: Toronto/57.

* Education: York University, BA; University of Toronto, MBA.

* Career: Lownds began his entrepreneurial career in the consulting and investment banking business. Early in his career, he managed the strategic management practice at DMR & Associates. He then was a partner at Paradigm Consulting Inc., before becoming a founding partner with Kenrick Capital, a boutique investment banking firm, in 1988. From 1994 to 1998, he was chairman and CEO of Sleep Country Canada. He is also currently involved with Red Apple Entertainment, a company he helped develop and fund in 2000. He helped found Listen Up! Canada in 2003.

* Passions: Being a musician, travelling, mentoring.

(Gyle Konotopetz can be reached at gyle@businessedge.ca)