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North Pole biz

Author: Bill Meagher
December, 2008 Issue

An insider’s view of Santa Inc.


It was an accident, really. One winter, I was in Florida playing a little golf with two friends, and the starter asked if we were OK adding a fourth. We all said sure, and a gent of some size, with a closely trimmed beard, joined us at the tee. He wore khakis along with an untucked, white golf shirt and a red sweater-vest. A ponytail stuck through the hole of his golf cap, which read Ketchikan Country Club. He introduced himself as Nick and hit a drive about 300 yards so straight you could have hung laundry on it.

As the round passed and I collected double bogies, Nick and I talked. “I’m in the distribution business, up north a-ways,” he volunteered. He said he was in Florida on vacation, looking for sun and some downtime. I pushed a five iron so far out of bounds it was alligator food. Nick said his busy season was over, “Christmas is crunch time for us, it’s kind of a retail deal.”

After the round ended, we adjourned to the 19th hole, where I bought a cocktail for my new friend. His cell phone went off and, though he tried to keep his conversation quiet, a little slipped out over the clinking of glasses. “I don’t care what Rudolph says, the sleigh is off limits until I get back.”

He put the phone away and found us staring at him. He shrugged his shoulders and said, “Ya caught me. The damn reindeer can be a handful.” He turned to the bartender and said, “Hit us all again.”

When you find out that Santa’s been your golf partner who needed a pencil to make par, you have questions. We had dinner and libations. You might think Santa would drink Snowshoes but you’d be wrong, just Jack and a little ice.

We stayed in touch. He showed me how to fly-fish and I showed him how not to bet on college football. When he toyed with the idea of a doing an autobiography, I gave him some ideas on how to write it. When I got married in New Orleans, he flew in and led a group of us down Bourbon Street, buying daiquiris for everybody and encouraging the trading of beads for the unveiling of certain assets.

He was in the North Bay on a wine buying spree when we caught up for lunch. I got us a table at Equus, and he was late, as always, arriving with excuses. “The rental car is a dog, no horsepower. I left it to the elves, and they booked me a compact—figures.”

We hugged and more than one person stared. I’d like to think they were looking at his outfit, not everyone can wear a red velvet suit. “Nick, you look like you’ve lost weight.”

“I go up and down. Couple years ago, I dropped about 45 pounds on that Atkins thing, and Martha [Mrs. Claus] made me tape a pillow to my stomach; said a skinny Santa was a bad look. She was probably right.”

Nick said he’d been tasting wine that morning for gifts. “Let’s see if these guys have a La Crema Pinot. I’m having some shipped to the Pole.” We perused the menus while they looked for the wine. “I’d like to have the pasta special, but the garlic would just destroy me,” he complained.

After we both ordered, I got out a notepad. “You know, I’ve never peppered you with Christmas questions, despite the fact I’m a respected journalist,” I said. He cut me off. “That’s one of the things I’ve always liked about you,” he said, taking a pull on his wine.

“You’ve always liked me because I’m a respected journalist?”

He shook his head. “Nobody respects you. I’ve always liked the fact you never asked me much about Christmas. You have any idea how much holiday crap I put up with? If I hear ‘Santa Claus is Coming to Town’ one more time, I may go postal.”

“Look, Nick, it’s September and I’m stuck for a Christmas feature.”

“You just moved from the nice list to the naughty list,” he said, pointing a finger at me.

“There are actual lists? For real?”

He nodded.

“And let me guess, I’ve never been on the nice list?” I ventured.

He shrugged his shoulders and gave me a smile, “We’ll never know, will we?”

Our food arrived. My ahi was beautiful, and Nick was safely tucked into his pistachio crusted halibut. “So, how did you get into the Christmas business?” I asked.

“Coal. You’re getting coal. And the not the clean type that Obama was talking about, either. We’re really going to do this?” he said, wiping his chin with a napkin.

I nodded.

“Well, it’s a family business. I’m fifth-generation Santa. I originally wanted to be an engineer, but the math threw me. So I do this instead. You want a bite, it really is pretty good.”

I shook him off. He continued, “Being Santa is a pretty good gig. I mean, it’s tough working the holidays, and the suit can be a little hot. But I make people smile for a living. A lot of business people measure success by how much they make or what kind of earnings they post at the end of the year. But try bringing the perfect toy to kid in a family that doesn’t have much. That smile, those eyes—no profit and loss statement will ever do that for you.”

He took his glasses off and wiped them on his sleeve a little. “So what else you want to know?” he asked.

“What percentage of your products do you guys make these days and how do you control costs?”

He drizzled some olive oil on his sourdough and took a bite. “More and more, we’re outsourcing. You take a look at and even Wal-Mart, and you see the wisdom of strong distribution and just-in-time inventory. The guys at Wal-Mart are jerks. I mean, seriously, how can you be the world’s largest retailer and make people beg for benefits? Our home office is still at the North Pole, but we’ve moved to regional distribution mostly in transportation hubs.”

“Like FedEx?” I venture.

“My PR guys would have my butt if I went into all the details. We still do lots of image work, plenty of outreach with kids, no sense in undoing all that. Let’s just say there are plenty of sleighs in the air.”

“Let’s talk PR a minute. Do you guys still have ties with the post office for letters to Santa, that kind of thing?”

Nick rolled his eyes and shook his head. “How old are you? No, we have a pretty sophisticated email program along with extensive networking with Yahoo, Facebook, even YouTube. Our demographics work shows the target audience has become more tech savvy. It’s BlackBerry this and BlackBerry that. Most of the kids today don’t even know where their mailbox is, and they couldn’t pick their mailman out of a police line-up.” He poured off the last of the Pinot and said, “We may need more, especially if your questions don’t improve.”

I asked our server to bring another bottle. I’d already moved from nice to naughty, and the Man with the Bag was sizing me up for coal. If he wanted more wine, he was getting more wine.

“Talk to me about labor costs,” I said. “How can you stay competitive and run an international operation?”

“First off, we’re a non-union shop, and we run it as a family business—not only because it’s an effective business model, but also because it’s the right thing to do.” The second bottle of wine arrived, and he made a show of sniffing the cork and swirling the wine. He smoothed his mustache and beard and tasted the wine, motioning that it was fine.

“I wouldn’t know a corked wine from a corked baseball bat, but I can tell you that if you hadn’t insisted on this interview, you might have gotten a case of this for Christmas. Now? Well, maybe my GPS isn’t going to work in your neighborhood at all.” You haven’t lived until Santa threatens you—or until you see him take three strokes to get out of a sand trap and says, “Put me down for birdie.”

“The elves and I have a profit sharing plan, so they have an incentive to work smart. But it’s a little tough. After you get done with HMOs and dental. The worker’s compensation only goes up, and when you add in the vet bills for the reindeer along with the feed, the margins keep shrinking.”

Our server is all charm and smiles as she clears our table and suggests a little dessert and perhaps an aperitif. She’s clearly working Nick, though it’s unclear whether she’s thinking tip or she has her eyes on the prize come Christmas morning. Either way, the legendary twinkle was in his eye, and I honestly didn’t know if it was her work or the possibility of putting away a little panna cotta.

Dessert was on the way, and I still had more questions: “How in the world do you recruit folks to work for you, and how do you retain them? I mean, the North Pole isn’t exactly a garden spot.”

You’d have thought I’d questioned his relationship with his mother. His eyebrows shot northward, and a crease that would have resisted a steam iron dented his forehead. “You have a problem with the North Pole? You’ve never been to the North Pole, despite my invitations,” he said.

I began to protest. “Nick, it’s really cold and I’m a California boy. It gets down below 40 and I wind up in the fetal position with a bottle of rum to stay warm.”

About that time, our dessert arrived. An uncomfortable silence settled over the table. “I’m sorry, but people think it’s all whiteout storms and polar bear fights. It really is quite beautiful; you just have to like night a lot.” He dug into dessert and continued, “You’d be surprised. A lot of our jobs are filled by word of mouth. We compete on salary and benefits, and there are plenty of people who are filled with the Christmas spirit. How many people can honestly say they work with Santa?”

“OK, let’s do some myth busting,” I said.

“I love that show. Jamie is a riot,” Nick says.

“It’s his glasses, right?”

He fixes me with a stare, so I venture, “Do you really know when we’re awake and when we’re asleep? That seems kind of Big Brothery—like you’re working with Homeland Security or something.”

“Bill, you get that I’m a saint, right?” he says, taking another bite. “It isn’t like we have video cameras everywhere. You want to talk about unfair; I can’t believe the traffic cameras you guys have down here. I rolled through a yellow light on the way over here and got stopped. I had to play the Santa card, or else I’d still be there yammering with the cop.”

“What about the reindeer? Are those names for real?”

Nick goes into his pocket and pulls out a $20 bill. “Mr. Jackson says you can’t name them all…and I’ll spot you Rudolph.”

“Rudolph isn’t one of the originals,” I said. “Let’s see, there’s Dasher and Prancer, Dancer, Donner, Vixen, Blitzen, Cupid. That’s seven. One of ’em is named after a cleanser, Ajax? No, uh, the barkeeper’s friend…Comet!

He handed me the $20. “You won’t believe how some of them were named. My great grandfather named Dancer, Vixen and Prancer all one evening after landing the sleigh on Broadway in San Francisco and spending a few hours in a gentleman’s club. On the other hand, Dasher was named after a car. True story.”

I was taking notes like a mad man. “How do you feel about the length of the season and how does that affect your business? I mean, it seems every year it starts earlier. It used to be Thanksgiving but now it feels like people begin shopping at Halloween.”

“It is starting earlier, even for me—and my life really is about Christmas. Traditionally, the elves, the reindeer, everybody takes off from the day after Christmas to a couple days after New Year’s, I mean nobody’s in their office anyway.”

Our server was there with some coffee, and Nick dosed his with cream and sugar before continuing: “January is pretty slow, we spend a lot of time running inventories, checking in with vendors, cleaning out accounts payable. February and March are mostly about demographics and trend research, figuring out what will be in demand at the end of the year. We begin gearing up in earnest in the spring, sign supply contracts and begin running two shifts at the workshop. By the time baseball season is over, we’re running full blast, leasing warehouse space and working on the naughty/nice data. After Thanksgiving, it’s mostly about distribution and working out the flight patterns.”

“What about the financial meltdown? How has that affected how you run your business?” I asked.

“Is there anybody your government didn’t bail out, besides those poor guys at Lehman Brothers?” Nick asked. “Everybody talks about frozen credit markets. I keep thinking come on up to the North Pole if you want to see frozen markets. We’ve worked with the same banks for 50 or 60 years. We have a pretty solid credit line to draw on, and being Santa, the interest rates are reasonable—even bankers want the good stuff at Christmas.”

“One thing I’ve always wondered about: How come you never worked out endorsement deals with anybody,” I asked. “I mean, can you imagine how much a deal with Apple would be worth if Santa endorsed the new iPod?”

“The only way I’d do that is if Steve Jobs promised to never wear another black turtleneck,” he said with a laugh. “We don’t really want to compete or align ourselves with anybody.”

“What about the Santa brand? I mean you already have the world’s most established brand. All you have to do is take it to the next level,” I suggested.

He shook his head slowly and grinned. “The true Christmas spirit is about giving. It’s about the feeling you get when you give something special to somebody. We can’t be true to that spirit if we’re looking to grow by 20 percent this year or buy some company out or expand our brand. In the end, the brand we need to protect is Christmas itself. Put that in your story.”

About that time, the check came. Nick tried to grab it but my cat-like quickness was too much for the fat man. “At least let me get lunch, since we already know you aren’t getting anything for Christmas,” he said.

“Stop it. This is my town,” I said, warning our server as I handed her my card, “This man is known to pass counterfeit cash. His money is no good here.”

Nick wasn’t finished. “Let me get the tip,” he insisted, his hand pulling a clip off some cash.

“Hey, knock it off. If I ever make it up to the North Pole, it’s on you.”

“This doesn’t get you off the naughty list. You’re still looking at coal,” he said with a grin.

You can’t blame a guy for trying.




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