Nearly 50 years after Lee Valley Tools began as a mail-order retailer of woodworking equipment, the firm remains fiercely proud of its Ottawa roots. The company’s main distribution and manufacturing facilities are on Morrison Drive in the city’s west end. More than half of its 850 employees call the National Capital Region home. And Lee […]
Nearly 50 years after Lee Valley Tools began as a mail-order retailer of woodworking equipment, the firm remains fiercely proud of its Ottawa roots.
The company’s main distribution and manufacturing facilities are on Morrison Drive in the city’s west end. More than half of its 850 employees call the National Capital Region home. And Lee Valley is still a family enterprise, with founder Leonard Lee’s son Robin now running the show as chief executive.
But as much as Lee Valley is an Ottawa success story, it’s also a global retailer. The company, which sells 20,000 products and makes about 1,400 tools, gardening products and other hardware in the nation’s capital, exports to more than 40 countries, with one big foreign market in particular – about 20 per cent of its revenues come from customers in the United States.
So it’s understandable when president and chief operating officer Jason Tasse says the last few months have been among the most challenging periods in the firm’s history.
Tasse says the possibility of new U.S. tariffs on Canadian goods and counter-tariffs on American merchandise have turned what has been a “very stable” trading partnership between the two countries “upside down” in a matter of weeks.
As a result, he says, the company is being forced to change the way it thinks about the future.
“The mindset shifts from growth and expansion to protection,” Tasse explains. “The biggest challenge once again, which has tended to be the theme in these past few years, is navigating through uncertainty. Nothing can be more disruptive for organizations than swings or significant changes to trade policies.”
The threat has subsided, at least for now. On Monday, U.S. President Donald Trump agreed to hold off on levying tariffs for at least 30 days while the two countries try to work things out.
But as Tasse points out, Monday’s detente doesn’t mean Canadian business leaders can breathe a sigh of relief.
“Even today, we don’t know what’s coming in four weeks,” he says. “The uncertainty of what’s ahead is still the big unknown.”
Test of resilience
Tasse says Lee Valley has spent decades building a competitive advantage for its Veritas manufacturing arm, which was launched in 1985. Now, the company is “facing a policy challenge that goes right after that competitive advantage. The (tariff) target was really at the products we’re most proud of making.”
It will be a test of resilience for Lee Valley, which has “built a lot of flexibility” into its business model as the retail landscape has evolved over time, Tasse says.
For example, the company has beefed up its e-commerce arm, which now accounts for roughly 50 per cent of its sales, and has redesigned the layouts of its 18 brick-and-mortar stores across Canada to include “experiential” showrooms that encourage shoppers to explore and engage with products hands-on.
To get goods into customers’ hands as quickly as possible, Lee Valley operates fulfilment centres on Canada’s east and west coasts as well as a facility in Reno, Nev., that opened nearly a decade ago to serve the growing American market.
When asked whether Trump’s tariff threats might prompt the company to rethink its marketing and distribution strategies, Tasse says Lee Valley’s blueprint for success is “always evolving.”
“We’re dealing with a very volatile future,” he says. “The best thing organizations can do is build this capacity around responsiveness – being able to really identify how you’re going to be impacted and how you can best respond without being too rigid.
“If there are barriers that are put up through policy changes, you’ve got to look at alternative plans. We feel Lee Valley has continued potential to grow. We will look for growth along the path of least resistance. If the U.S. administration makes it very difficult for Canadian companies to operate and sell into the United States, we’ll look at growth in Canada and other more co-operative markets.”
Tasse concedes that recent events have put “a lot of pressure on our continued commitment to be a part of the Canadian economy.”
At the same time, however, he says Lee Valley has “never considered” shifting any of its manufacturing south of the border to avoid potential tariffs.
“We are a family business and we put a lot of emphasis on the communities that we’re located in,” he says. “There’s a responsibility and a commitment.
“Has this forced us to rethink how we operate? I would say we’re still highly committed to domestic manufacturing. That’s unwavering for us. The key focus for us is job protection and cost containment right now.”
Just the talk of tariffs has caused retail buyers and individual consumers to rethink their spending plans, Tasse says, adding that could have significant repercussions for the economy as a whole.
“We’ve done a good job at insulating ourselves from as many external forces as possible,” he says. “The broader issue right now is, as a company – and we’re not alone here – facing all this uncertainty puts a pause on a lot of decision-making.
“I was chatting with an Ottawa store manager and they were looking at a product that we sell and the exact dialogue was, ‘I just don’t know what’s coming, so I might hold off.’ Consumer retention will be a challenge. People, much like businesses, are very much in a wait-and-see (mode). People are recalculating whether to buy or not.”
The trade spat comes fast on the heels of the pandemic, which hit Lee Valley hard as measures aimed at curbing the spread of COVID-19 caused in-store spending to plummet and forced the company to lay off some of its staff.
Things seemed to be looking up for the retail industry recently – until the tariff tiff threw yet another curveball at Tasse and his team.
“We’re all longing for the days of a stable market, and very few significant policy changes,” he says. “It feels like just yesterday that I was tracking on a daily basis which provincial regulations were going to open and close stores (during COVID) and who was deemed essential and who wasn’t. And now we’re looking at a complete shakeup of the existing trade agreement across North America, so…”
Tasse lets the sentence linger in the air unfinished. For manufacturers and retailers like Lee Valley, the future is anyone’s guess. 
