Posts Tagged ‘big box retailers’

RON JOHNSON’S DEPARTURE FROM J C PENNEY

Wednesday, April 24th, 2013

 

The pundits are having a good time poking fun at Ron Johnson’s expense. Yes, he made big mistakes. However, he was not the real problem.

Penney’s has been declining for years. The real blame belongs to the Board and the prior management. Over the years, J C Penney focused on the same customer and followed those customers as they grew older; management failed to attract younger customer.  Everyone in retail knows the younger customers are the profitable customers. Only during the brief tenure of Allen Questrom and Vanessa Castagna did J C Penney do the right things.

I always believed the probability of success in Ron’s strategy to take JCP upscale and simultaneously attract a younger customer was unlikely. As retailers switch from one customer base to another, the retailer usually first finds the bottom of the Grand Canyon. That is where JCP is today. The old customers do not like what they see and the new customers do not like shopping with the old customers. In my mind, investors cannot afford to take the time required to successfully support a retail turnaround.

I have seen several retailers attempt to make customer base changes. Some that come to mind are:

  1.       Abraham & Straus Department Stores – Brooklyn, New York
  2.       Sears – The Softer Side
  3.       Kmart- The New Kmart
  4.       Mervyn’s – Mervyn’s California

All were colossal failures. On the other hand, Target did successfully make a  change but it was done gradually and over several years. The customer base change was also less significant.

The essence of this story is that the Board and management need to keep their eyes focused on the long-term health of the company versus short-term quarterly tactics. The truth is that a merchant prince can seldom pull off a successful major change in customer base.

NEW YORK DEPARTMENT STORES – ABRAHAM & STRAUS

Thursday, June 9th, 2011

Holiday Card 1904. Front Entrance

NEW YORK DEPARTMENT STORES – ABRAHAM & STRAUS

Abraham & Straus - Arial View - 1906

Founded in 1865 by Abraham Abraham and Joseph Wechsler in Brooklyn, New York, the company initially opened as Wechsler & Abraham on Fulton Street near Tillary. At this time, Brooklyn was a thriving community of its own; the Brooklyn Bridge had not yet been built. In the early 1880’s, the company bought and renovated an ornate cast iron building on Fulton between Hoyt Street and Gallatin Place. With continual expansion, the store eventually occupied the entire block. The building was equally ornate inside as depicted in some of the postcards shown below. A five-story courtyard with a skylight allowed daylight to show off the merchandise.  Abraham & Straus became the retail showplace in New York. The last major renovation was between 1928 and 1930 when the architects Starrett & Van Vleck designed the new building facing Fulton Street in Art Deco style. This store still stands today but is now a Macy’s.

In 1893, the Straus family along with Simon Rothschild bought out the Wechsler interest in the company and the store was renamed Abraham & Straus. The Straus family also had controlling interest in R.H. Macy & Company in New York. The two retailers were not combined but did maintain a common buying office in Europe. During the 1910s, the Straus family separated their interest in the two stores, with Abraham & Straus going to one branch of the family, and Macy’s to the other. In April, 1912, Isidor and Ida Straus went down with the Titanic.

In 1929, Abraham & Straus, Bloomingdale’s, Filene’s and Lazarus (along with its subsidiary, Shillito’s) merged to form Federated Department Stores. At this time, Federated was located in Columbus, Ohio but later moved to Cincinnati. The merger gave each division the strength to weather economic storms and also created buying clout in the U.S. and Europe.

Family members ran Abraham & Straus until 1955. Walter Rothschild was President and Chairman until 1955, and was succeeded by Sidney Solomon, the first non-family member to lead the company.

In 1950, the company purchased the Loeser’s store in Garden City and converted it to Abraham & Straus. In 1952, the company built its first suburban store in Hempstead. That store was expanded over the years until it exceeded 400,000 square feet. The company continued expansion with stores in Manhasset, Smithtown, Babylon (later replaced), Monmouth (NJ), Paramus (NJ), White Plains (NY), Short Hills (NJ), King of Prussia (PA), Willow Grove (PA), and Manhattan.

Under the leadership of Walter Rothschild and Sidney Solomon, Abraham & Straus was the powerhouse of Federated Department Stores. The division contributed more earnings per share than any other division. For years it was known as the training ground for merchants for the retail industry. Many of the top retail CEO’s came from the A& S training program.

Unfortunately, Abraham & Straus also became the funding source for Federated Department Store’s divisions in the Sunbelt (Bullock’s, Burdines, Sanger-Harris, and Rich’s). Eventually the Brooklyn market declined as did Hempstead and Babylon. The new management team relied on a strategy of opening new stores to grow their way out of the problems created by the declining markets. New stores were built in White Plains and Short Hills, but neither was an immediate success. Then, A&S made the disastrous decision to open stores in the Philadelphia market (Willow Grove and King of Prussia). These stores worsened the situation. As a final fiasco, the division opened a new store near Herald Square in NYC, a store that never could be profitable. On top of all this, a new centralized distribution center was opened, intended to reduce expenses and to increase the selling space in each store. Through management bungling, this operation became a major problem as shortage increased dramatically chain wide. In addition, costs were far above projections and merchandise got stalled in the pipeline.

Outside Porte Cochere. 1909

The Court, Silver Department, 1904

What happened???

Atop all the management mistakes in the late 1970’s and 1980’s, the final blow came when Campeau, the real estate developer, bought Federated Department Stores and combined it with Allied Stores. This led to the combination of A&S with Jordan Marsh (Boston), operating out of the Brooklyn headquarters. In 1994, Federated Department Stores purchased bankrupt R.H. Macy & Co and in 1995, combined A&S with the Macy’s New York division, converting stores to the Macy’s brand or other divisions of Federated.

I first saw Abraham & Straus in the late 1960’s when it was a powerhouse. I was working at Bullock’s in Los Angeles and was asked to visit with A&S to gather information on some of their personnel policies and procedures. I was impressed. The customer traffic was unbelievable. The fashion displays were incredible as the volume justified the costs. I joined A&S in 1976 and it was then on a fast downhill slide. Management’s response was to take the business upscale. This new direction worked in Manhasset, Smithtown, Paramus and the smaller Garden City store but in the other stores the new direction was a disaster. In Brooklyn, for example, we added a Pappagallo shop and put $12 million into an upscale renovation of the Brooklyn store when in fact all that sold in front of the store were Jellies and incense on cardboard boxes. The employees lost confidence in management as customers objected to the new higher priced merchandise. Unions started organizing attempts because of separation of the associates from management. One day over 6,000 people demonstrated in support of the unions in front of the Brooklyn store. The store also became a magnet for criminals. Organized gangs came into the store to steal merchandise. One Christmas Eve a gang came into the jewelry department during business hours, broke all the cases and stole the majority of the merchandise.

A&S Rotunda .. 1904

Picture Gallery. 1907

The postcard collection primarily shows the store pre-1930 when it was grand. Like all the other cards in the Plummer Collection, I ask that you do not reproduce or copy any of these postcards without gaining my written permission.

Grocery Department. 1904

Grocery Department in 1907

I trust that you will feel comfortable to leave your comments about your history with A&S, either as a customer or as an employee. We need to preserve this important part of retail history.

Straus Family Summer Home. View 1 . 1907

Straus Family Summer Home . View 2. 1907

Anniversary Day Parade . Prospect Park. 1907 . Pub by A&S

Lawn Tennis Prospect Park . 1905 . pub A&S

Brooklyn Orphan Asylum . 1906. pub by A&S

A&S Rear View Showing Service Center 1904

NORTHERN CALIFORNIA DEPARTMENT STORES – WEINSTOCK LUBIN & CO – SACRAMENTO

Wednesday, February 16th, 2011

Weinstock Lubin & Co. Sacramento 1908 New Store After Fire

In 1875, David Lubin, a Polish émigré via New York opened Lubin’s One Price Store in downtown Sacramento. This first store was 16 by 24 feet. A year or two later, his half-brother, Harris Weinstock, and his sister,  Jeanette Levy, joined the business as it expanded from just a store to a major mail order house and the company name changed to Weinstock Lubin. Soon after, the store was expanded to 80,000 square feet with four stories. In 1875, the company was the largest mail order house on the Pacific Coast.  The company grew and soon opened buying offices in New York and San Francisco. In 1888, the company was incorporated and renamed Weinstock Lubin & Co. A store in San Francisco was opened in 1897. In January, 1903, the downtown Sacramento store was destroyed by fire. A fireman was killed. Not to be stopped, the company quickly proceeded to build a new store, a building which became the biggest in Sacramento. The company targeted the value driven customer. As time continued, the retail business took over and became the majority of the business.

The company developed a culture which allowed employees to have a stake in the business. The company started a profit sharing plan which shared profits by employee level. The company also hired teachers to provide younger employees with skills in writing and mathematics.

David Lubin was impatient and wanted to do more than just run the family department store and mail order house. He let Harris Weinstock become the CEO while he engaged in agriculture. He started orchards in the Sacramento area and brought European farming methods. His knowledge of agriculture assisted him when he helped found the California Fruit Growers’ Union. He then helped settle Eastern European Jewish refugees who worked on various farms in the area and, in 1891, he became the director of the International Society for the Colonization of Russian Jews. He then began to campaign for subsidies and protection for farmers, initially in California but eventually on an international scale. His son, Simon, helped him develop a proposal for an international chamber of agriculture; in 1896, David Lubin moved to Europe to implement the proposal. In May, 1908, with the sponsorship of Italy’s King Victor Emmanuel III, the International Institute of Agriculture (the IIA) opened, in Rome. The Institute’s goals were to help farmers share knowledge, produce systematically, establish a cooperative system of rural credit, and have control over the marketing of their products. In 1906, David was permanently appointed as the U.S. delegate to IIA. (Note: The IIA was folded in 1945 and merged into the United Nations.

In 1949, Weinstock Lubin & Company was acquired by its arch rival, Hale Bros. In 1979, the new parent company Carter Hawley Hale Stores expanded Weinstock Lubin & Company (now just called Weinstock’s) into Reno, Nevada, and Salt Lake City, Utah.

In 1991, Weinstock’s was combined with the Emporium division which took over all operations including merchandising.

The downtown store in Sacramento is now an office building.

What happened???      Weinstock Lubin & Company was once a powerful retailer in Central California. It unfortunately became a part of Hale Bros which later merged with Broadway Stores and became Broadway Hale and later merged with Emporium Capwell to become Carter Hawley Hale Stores. Wall Street jokingly called the company EGO, Inc. The parent company immersed itself with debt as it went on a drive to acquire other retail chains in an effort to become the biggest retail chain in the U.S. The impact of this debt reduced the amount of capital available to maintain the stores. Macy’s became a better competitor in California and Nordstrom also entered the market along with a host of specialty retailers and big box retailers. The department store divisions of Carter Hawley Hale no longer were relevant to the customers. After Carter Hawley Hale Stores were sold to an investor group, Zell/Chilmark, the new management team made key marketing mistakes which finished off the parent company and resulted in the 1995 sale to Federated Department Stores. With the sale, all divisions, including Weinstock’s were either converted to Macy’s or sold.

I visited Weinstock Lubin & Company when I was young as I only lived 80 miles south in Modesto. Although Weinstock Lubin had an enjoyable lunch bar for kids, it was not as magnificent as the stores in San Francisco. Weinstock Lubin was a major participant in the holiday festivities and always had wonderful window displays.

Weinstock Lubin & Co. Sacramento 1906

Weinstock Lubin & Co. Sacramento 1924

Weinstock Lubin & Co. Sacramento 1927

I encourage you to leave your memories of this store and department store chain in the comments section below.

SOUTHERN CALIFORNIA DEPARTMENT STORES – MAY COMPANY CALIFORNIA

Monday, January 31st, 2011

Downtown LA - May Company (after addition)

MAY COMPANY – CALIFORNIA – The Largest Department Store in the West

In 1923, the May Company based in St. Louis, Missouri, bought Hamburger’s in Los Angeles and re-named it May Company California. The May Company itself had started in 1877 in Leadville, Colorado, specifically to serve the silver miners. The May Company Department Stores expanded by moving to Denver and later purchasing Famous Brothers in St. Louis. It then moved to St Louis and merged with William Barr Dry Goods in 1911 to create Famous Barr. With the 1923 acquisition of the large Hamburger store in Los Angeles, it entered the California market.

For the first 15 years, the May Company California division focused on the downtown Los Angeles store. The first branch store was opened in 1939, at the corner of Wilshire Boulevard and Fairfax. Even though the Great Depression did not hit California hard, the May Company remained cautious. They did know that they needed a store in Western Los Angeles as that was where the population growth was happening. In 1947, after WWII, they opened a store in the Crenshaw shopping area where many of the aircraft plant workers lived. In 1952, they opened a large store in Lakewood, near the Douglas plant and airfield. Afterwards, the company began opening a new suburban store every year or two until their stores captured significant market share in Los Angeles, Orange, San Diego, and San Bernardino counties.

Like Broadway Stores, May Company was a mid-tier department store chain catering to the broad value oriented customer. The company developed strong merchants and, although highly promotional, they were great at following the fashion trends. I remember in the 60’s and 70’s when the juniors revolution was taking place, the May Company – California stores had a junior area that captured the times as well as the best junior specialty retailers. May Company was hot! In those days May Company California was a major profit producer for May Department Stores Company.

In later years, the May Company California expanded outside of California as the parent company bought Goldwater’s (Arizona) and incorporated the Goldwater’s Las Vegas store into a May Company California store.

In the late 1970’s and 1980’s May Company California stores started to show wear as the stores were not well-maintained under the expense control programs being implemented. The company still maintained strong merchandising programs and the May Department Stores Company became known for making money through effective merchandising. However, the California division was hurt by executive turnover and corporate programs that influenced and limited local merchandising.

In 1993, after the May Department Stores Company acquired Associated Dry Goods Company, the Associated’s W.J. Robinson & Company division was merged with the May Company California stores to form Robinsons-May. Robinson’s was an upper-tier department store operation and the merger of these two businesses first created some difficulties. When Bob Mettler became responsible for merchandising the problems seem to end as he differentiated the merchandising for the stores based upon local markets. He also brought a new level of enthusiasm to merchandising and buffered the merchandising team from the corporate merchandising pressures.

In 1984, the original store at 8th and Broadway was closed. The headquarters had moved out of that building years before. This area of downtown Los Angeles had deteriorated significantly.

In 2006, after the May Department Stores Company was acquired by Federated Department Stores, the Robinsons-May division was closed and the stores were converted to Macy’s or sold.

What happened?????   Although May Company California was a strong and aggressive merchandising organization, they, like others, had difficulties facing increased competition. Nordstrom, Mervyn’s, Target, a reinvigorated J.C. Penney, Costco, and others were taking market share and operated with lower costs. The May Company reduced expenses in a manner that resulted in a less than pleasant shopping environment. Corporate turnover and control also caused problems and eventually ended local merchandising programs. In the end, the collapse of the parent company ended May Company California.

I have posted postcards of the downtown Los Angeles store, the Wilshire store and the Crenshaw store. Postcards of the downtown LA store are listed under Hamburger’s, the company May Company purchased in 1923. Postcards of the newer May Company California stores are, in my mind, not important for this blog. The newer stores were just big boxes with no architectural importance.

May Company Downtown LA 1930's

May Company California - Store at Fairfax and Wilshire Blvd -1940

May Company Store at Fairfax and Wilshire Blvd. Miracle Mile 1960's

May Company California - Crenshaw Store 1940's

Department Stores in Southern California – J.W. Robinson & Co

Saturday, January 22nd, 2011

The Boston Store - Los Angeles - 1910

J.W. ROBINSON & CO – Los Angeles

James Winchester Robinson opened his first store in 1881 under the banner of The Boston Store. The original store was located at Spring and Temple Streets. In 1914, the name was changed to J.W. Robinson & Company and it moved to a new location at 7th and Grand in a building designed by Noonan and Richards. In 1934 the building was modernized by Edward L. Mayberry. The downtown store had six floors of selling space. On the seventh floor were the restaurants, the beauty salon, and customer service. The women’s rest area and lavatory were reputed to be exquisite.

Robinson’s catered to the carriage trade as did Bullock’s and Coulter’s. The store presented better fashions and offered excellent customer service. For years the store competed well with Bullock’s in the downtown market because it was located west on 7th street in an area attractive to the upper-end customers.

In 1957, the company was acquired by Associated Dry Goods and became their fashion headquarters for the West.

In 1952, the company opened its first branch store in the Beverly Hills market. Robinson’s needed that store to capture the carriage trade: customers that were now shopping at Bullock’s, I. Magnin’s, and Sak’s stores located out on Wilshire and at the specialty shops on Rodeo Drive. Even Coulter’s had closed its downtown store and moved to Wilshire. Later, Robinson’s opened a winter-only store in Palm Springs to serve the customers who wintered there. Other suburban stores opened in Panorama City, Anaheim, Santa Barbara, Glendale, Pasadena, Newport Beach, Cerritos, Woodland Hills and the City of Industry.

In 1986, Associated Dry Goods was acquired by The May Department Stores Company (St. Louis). In 1993, the Robinson’s division of Associated Goods was merged with the May Company Southern California division to form Robinson’s May. This was a difficult marriage as May Company was targeting the moderated market and Robinson’s catered to the carriage trade. In 2005, after the acquisition of The May Company Department Stores by Federated Department Stores, the stores were either renamed Macy’s, Bloomingdale’s or were sold.

What happened????      Although Robinson’s had relatively good positioning in Los Angeles, it relied too long on its one store downtown. It did not have the clout with vendors to develop exclusive relationships. As the customers moved west to Beverly Hills and south to Orange County and  when the downtown retail market declined, Robinson’s was slow to expand and gave up market share to Bullock’s, I. Magnin’s, Sak’s, and other retailers. Robinson’s started to rebound when Michael Gould became the CEO, but he did not get full support from the parent, Associated Dry Goods. When it merged with May Company, the company quickly lost the carriage trade customer.

I knew Robinson’s well as a competitor when I worked at Bullock’s. The downtown LA and the Beverly Hills stores were well-maintained and operated at high customer service levels. The management was not known as sophisticated. The management development program was not strong so the company was never able to develop talented merchants. I remember when the Attorney General for California looked into price fixing amongst the Southern California department stores. They found a folder amongst the corporate office files at Robinson’s entitled “Price Fixing Agreements”.

I wish there were postcards showing the interior of this wonderful store. I have only one which shows the women’s restroom. As soon as I locate it I will post it.

New Downtown LA J.W. Robinson Store Drawing

J. W.Robinson & Company - Los Angeles - 1917

J. W. Robinson & Company - Los Angeles - 1920's

J. W. Robinson & Company - Los Angeles - 1920's

J. W. Robinson & Company - Los Angeles - 1940 - After 'Remuddling'

Utopia Yarn/ J.W.Robinson & Co - 1940

Rogers Peet Suits/J.W. Robinson & Co. - 1941

J.W. Robinson & Co. - Beverly Hills Store

J. W. Robinson & Company - Newport

Department Stores in Southern California – Bullock’s

Monday, January 3rd, 2011
  Bullocks Downtown Los Angeles – 1907 – Grand Opening

In 1907, John Gillespie Bullock and Percy Glen Winnet opened Bullock’s at the corner of 7th & Broadway Streets in downtown Los Angeles. The two had worked at The Broadway and convinced Arthur Letts, Sr, founder of The Broadway to back them in this new retail venture  targeting the more up-scale customer. The store grew over the years as it acquired buildings on 7th Street between Hill and Broadway; one of the buildings was a competing department store. In 1923, John Bullock and P. G. Winnet bought out Arthur Lett’s interest.

In 1929, the company opened its first branch store on Wilshire Boulevard. This luxury Art Deco designed  store targed the wealthy as they moved to the nearby Hancock Park neighborhood from the downtown’s West Adams district.  Later, the Bullock’s Wilshire store became a separate division within Bullocks. For years Bullock’s Wilshire merchandised the store in Palm Springs which only operated in the Fall, Winter, and Spring seasons. The Palm Springs store served the Hollywood community with winter homes in that area.

Bullock’s was known as a chain which targeted the better customer and provided unparalled customer service. The company had approximately 65 buyer/managers in each store until 1970. Up until then, the company believed that having buyers in each store for each department helped provide a localized assortment. However, it was hard for Bullock’s to buy from larger manufacturers as each store could not meet minimum quantity orders. The company did have exclusive relationships with key better vendors which helped it retain the better market position.

The third suburban store was opened in Pasadena (it was designed to be converted into a hotel if it did not succeed as a store). Later the chain continued to expand with stores in Westwood, the San Fernando Valley, Santa Ana, Torrance, Lakewood, San Gabriel Valley, Orange County, Las Vegas, Pheonix, and San Diego.

Bullock’s acquired  I.Magnin & Company in 1944 to form Bullocks-Magnin. In 1964, publicly held Bullocks-Magnin was acquired by Federated Department Stores. This was a hostile takeover. P.G. Winnet, the founder, opposed the sale. His son-in-law, Walter Candy who was President, was for the sale and gathered support of the management team.  Abe Fortes, who later became a Supreme Court Justice, was the attorney representing Federated. (Note: Bullock’s in Northern California was a separate division of Federated Department Stores.) This acquisition affected both Bullock’s and Federated for many years.  First,  many of the management team were protected for supporting Mr. Candy and the Federated acquisition so it was agreed that directional and management changes would not be made for five years. That is one of the key reasons Bullock’s did not convert to central merchandising until 1970. P.G. Winnet mostly continued working out of the Bullock’s-I Magnin offices but did visit stores and was known for pinning candy on sales people who he recognized as outstanding. Secondly, Federated was restricted from further growth through acquisition. The Justice Department was concerned that Federated was gaining too much share of the department store sector which at the time was the largest individual segment in the retail industry.

In 1988, Bullock’s was sold to the R.H.Macy Company as Federated was owned by Campeau and needed cash. As Macy’s-Atlanta took over merchandising,   Bullock’s lost its better positioning. As I understand it, under Macy’s store gross margin production shrank dramatically. In 1995, Bullock’s name was formally changed to Macy’s. Now, all the Bullock’s sites are known as Macy*s or Bloomingdales since the R.H. Macy Company was acquired by Federated Department Stores.

Bullocks was known for:

  • Merchandise assortments which trended towards better.
  • Higher quality salespeople who were focused on customer service.
  • Strong fashion presentation with upgraded and well-maintained stores.
  • Special events.

What happened???       When Federated Department Stores acquired Bullock’s it was a leader in Southern California but was marginally profitable. As management changes were made the company became highly profitable and in a dominant market position because the company secured top merchandising talent, invested in systems, and had the capital from Federated Department Stores to upgrade facilities and to expand into new markets. The downtown store continued to slide as the market demographics changed, the Southern California transportation system collapsed, and as customers shopped more at shopping malls. Bullock’s flourished until Nordstrom’s entered the Southern California market. At that time, Bullock’s began losing some of its fashion edge as markdown programs were reduced with the intent of increasing profitability but in reality allowed fashion to become stale in comparison to Nordstrom’s. Bullock’s remained dominant but should never have allowed Nordstrom’s to gain a foothold in Southern California. (Note: Terry Lundgren, CEO of Macy’s (Federated Department Stores) started with Bullock’s as a trainee. Keep in mind, the Bullock’s motto was….” to build a business which shall know no end”.

Today, the former downtown Bullock’s store building is divided between a St Vincents Jewelry Mart, a parking lot, and small retail stores. The Bullock’s Wilshire store now houses the Southwestern Law School. The Bullock’s Wilshire store is kept in its original Art Deco splendor and serves as a reminder of department store retailing in the grander days.

I started my retail career with Bullock’s. Although I grew up in Modesto, California, about 300 miles north of Los Angeles, I knew Bullock’s especially well. My mother was from Los Angeles. My grandmother used to knit infant clothing for Bullock’s downtown. My godmother, Ms. Paquita Machris, used to take me twice a year to Bullock’s Wilshire to pick out clothing. Her personal sales person, Ms. Dineen, met us at the MotorCourt and took us through the store followed by a lunch in the tea room where I enjoyed my first taste of Babas au Rhum. Years later,  I always made sure Ms. Dineen was well taken care of as she had the largest sales book in the entire Bullock’s chain. I joined Bullock’s when I taught Statistics at U.S.C. I then became a part of the Personnel department in the corporate offices. I remained with Bullock’s until 1978 when I was recruited to Mervyn’s, a new publicly held company in the San Francisco Bay Area.

My collection of Bullock’s postards are shown below. If anyone has memories of Bullock’s I hope you will feel free to memorialize your memories in the Comments Section below. I know I have many friends and co-workers who are anxious to do so. You must receive my permission to copy or reprint any of these postcards.

Bullock’s Downtown

Bullock's Downtown 1920's

July 4, 1921

DownTown LA 1912

Bullock's Downtown 1930's (note outdoor dining - before smog)

Bullock's Downtown - 1930's

First Floor 1914 - Later became Cosmetics floor

 

Gown Room - Third Floor - Pre 1920

 

Children's Departments - Fourth Floor - Pre-1920

Millinery Room

The Tea Room…..

Tea Room - 1920's

The Lobby - Tea Room

The Foyer - Tea Room - 1920's

The Foyer - Tea Room - 1910

Tea Room - The Grey Room - 1920's

Tea Room - 1920's

Tea Room - 1930's

Tea Room Kitchen - 1930's

California Poem Sent to Bullock's Downtown Customers - 1924

Bullock’s Wilshire – Opened 1929

Bullock's Wilshire

Bullock's Wilshire - Fine Pottery and Glassware

Bullock's Wilshire - Fine Jewelry Gorham Sterling & Precious Stones

Bullock’s Pasadena

Bullock's Pasadena - Designed to be a hotel if it did not work as a retail store.

Fashion Postcards Sent to Bullock's Pasadena Customers

Bullock’s Santa Ana

Bullock's Santa Ana - Company developed mall- Sister Company I Magnin is co-anchor

Bullock's Downtown Easter Placecard - Shirley Temple - 1928

This placecard was provided to me by someone whose Great Aunt worked at Bullock’s and kept this placecard. She had Shirley Temple, Ma Kittle, and Bob Hope as customers. I have not verified the signature. Bullock’s, Bullock’s Wilshire, and Bullock’s Palm Spring served many of the Hollywood Stars!

Restaurant Careers: The Path From Dishwasher To Chief Executive Officer May Now Include A Stop At Harvard

Sunday, November 28th, 2010

For years the food services industry has been labeled an industry for low pay and low skills. Research recently completed by Plummer & Associates, an executive search firm, shows quite the opposite. The food service industry now has highly educated leaders.

This new study on the education of Chief Executive Officers at the top 100 food service chains in the United States shows that today over 68% have college degrees. This study also shows a growing trend of CEO’s with advanced degrees as 18% hold MBA degrees, 2% hold MA/MS degrees, and 4% hold JD degrees.

For years the food service industry was known for its career path from ‘dishwasher to CEO’. Our research indicates that while this may have been a viable path in the past, the current trend is for a minimum of a college degree and there is an increasing importance placed on advanced degrees. This demonstrates the importance of the sophisticated intellectual tools and the strategic vision gained through higher education.

Like with other segments of the retail industry, the food service sector has consolidated from regional companies led by founding families into massive, complex businesses requiring sophisticated tools to manage them effectively. This new breed of food service businesses are intensely competitive and are constantly looking for cost and marketing advantages to enhance their market position.

According to Plummer & Associates, some of the complexities facing the food service industry demand a command of the following disciplines:

 Marketing – Sophisticated tools have elevated the ability to forecast demand and to measure customer buying pattern changes. These tools also help measure brand awareness, customer loyalty, and the return on investment for all marketing programs. With the advent of social network marketing, the methodology of communicating with the customer is changing.
 Merchandising – Food trends and tastes are constantly evolving. To create a competitive edge it is important that food service organizations be active in planning product life cycles, assortment strategies, and new product introductions backed by a superior product development process. All these strategies must mesh well with operations to prevent overwhelming production and unnecessarily impacting quality and costs.
 Supply Chain Management/Logistics – Today there are tools available to help food service companies secure significant cost advantages throughout the supply chain while simultaneously improving the quality of customer service. This can provide organizations with a significant advantage over competitors.
 Finance – This function has quickly progressed from recording history to active involvement in ‘creating value’ through analytics. This is important as the company competes in the market for capital.
 Legal – Our society has become more litigious making larger businesses more of an attractive target. The complexity of new regulations has resulted in an increase of the legal staff. A food service leader is now required to be more involved and responsible for setting the tone of legal strategies.
 Human Resources – Once considered just an expense, Human Resources managed effectively must now create differentiation versus the competitors. A company’s talent and culture, including a devotion to the customer, are now more important than ever.
 Information Technology – In the past, technology seemed to be the sole domain of the IT department. With advanced POS systems, the food service organizations learned the power of information and the ability to forecast demand by day part. Now, leading IT departments interrelate with the entire organization by providing useful information to aid in decision making, control costs, forecast and analyze. Companies are now operating enterprise wide systems and it is becoming mandatory that the CEO know the capabilities of these systems to ensure the company gains a competitive edge.
 Global Reach – The days when food service companies only operated stores in the U.S. with product secured from U.S. sources are long gone. The implications of global activities are enormous.

Forward thinking food service companies such as Pepsico (Yum!) and Pillsbury/Grand Met (Burger King) who saw the need for talented executives started recruiting programs to attract students from colleges and also actively recruited MBA’s. These recruiting programs are responsible for the majority of CEO’s now leading the food service industry.

For those who are looking to progress up the ladder in food service, the data demonstrates that it takes more than experience in the industry to become a CEO. The food service business now requires the sophistication that comes with a college education and the trend shows an increasing demand for the additional tools gained in an MBA program.

The research shows that a college education is far more important than the particular school attended. While Ohio State University produced three CEO’s, the University of Kentucky produced two, and the University of Central Florida produced two, no other school produced more than one. On the other hand, in regards to CEO’s with MBA degrees, the Graduate School of Business at Harvard University produced four which is statistically important. Close behind is the University of Chicago producing two. It is clear that the industry prefers graduates from the top tier graduate business schools.

How Do I Explain A Gap In My Employment History

Monday, October 4th, 2010

 

I often discover a gap in a candidate’s employment history while reviewing their resume. What is surprising is that so many individuals do not know what to do about these employment gaps. Some individuals try to hide it, which is lying. Others try to stumble through an explanation which makes an employer suspicious.

There are many reasons for a gap in your employment history. These could be:

  • Your employer went out of business leaving you looking for employment.
  • Your employer terminated your employment due to a staff reduction.
  • Your employer terminated you for cause.
  • Or, you quit.

 

Any of these reasons could leave you with an employment gap while you were looking for a new career. Sometimes, the gap is longer because of an economic downturn or because your family did not want to relocate.

What ever the reason, you should show the employment gap on your resume and be ready to fully explain what you were doing during that time. If you do not have a prepared and honest explanation it will lead prospective employers to think that something else was going on in your life … maybe incarceration.

The last thing you want to do is cover up an employment gap. If your perspective or, worse yet, your new employer finds out about the cover up, you will most likely be not hired, or terminated. Now, it is too easy for employers to verify accurate dates of employment; and, employers do check.

Honesty is the best explanation. An example of a good explanation is ….” after I left company xyz, I started looking for opportunities in my city. Unfortunately, there are no other retailers there so I tried to transfer my skills to another industry. My son/daughter was in his/her senior year in high school so our family made a choice not to relocate. A year later, I found myself still looking. With my son graduating, our family has now agreed to relocate.”

There are many other reasons. Do your best to honestly explain the situation.

Retail Executives: Education of the Highest Paid CEOs

Tuesday, August 31st, 2010

 In 2009, our firm published an article (listed below) indicating the level of higher education held by the CEOs of the top 100 retail companies. We have now identified the ten currently highest paid retail executives and have discovered that this group confirms our previous study. The complexity of the retail business is such that executives who possess the most intellectual tools rise to the leadership roles. The statistics are as follows:

Education of Highest Paid CEOs             Education of Top 100 Retail CEOs

BA degrees                 90%                                             85%

MBA degrees              10%                                            23%

JD degrees                   10%                                             6%

According to our research, the following executives fall into the category of the top ten highest paid executives. Total compensation for each is based upon current public records of publicly traded retail companies in the U. S.

Andrea Jung. Chairman and CEO – Avon

             Total Compensation: $13.7 million

             Education: Bachelor’s – Princeton University

 Michael T. Duke. President, CEO and Director – Wal-Mart

             Total Compensation: $13.3 million

              Education: Bachelor’s – Georgia Tech

Terry Lundgren. Chairman, President and CEO – Macy’s

              Total Compensation: $8.7 million

              Education: Bachelor’s – University of Arizona

Francis S. Blake. Chairman and CEO – Home Depot

              Total Compensation: $8.3 million

              Education: Bachelor’s – Harvard College 

                                 JD – Columbia University

Myron E. Ullman – Chairman and CEO – J.C. Penney Company

              Total Compensation: $8.0 million

              Education: Bachelor’s – University of Cincinnati

Trudy Sullivan – President and CEO – Talbots

             Total Compensation: $6.9 million

            Education: Bachelor’s – Manhattanville College

Katherine L. Krill – CEO, President and Director – Ann Taylor Stores

             Total Compensation: $6.9 million

             Education: Bachelor’s – Agnes Scott

Robert A. Niblock – Chairman and CEO – Lowes

             Total Compensation: $6.1 million

             Education: Bachelor’s – University of North Carolina

Gregg W. Steinhafel – Chairman, President and CEO – Target

             Total Compensation: $6.0 million

             Education: Bachelor’s – Carroll College

                               MBA – Northwestern University

Carol M. Meyrowitz – CEO – TJX

             Total Compensation: $5.7 million

             Education: no degree

Following is the study we released in April, 2009, on the education level of the CEOs for the top 100 retail chains.

TOP RETAIL EXECUTIVES HAVE TOP EDUCATIONS!

A new study conducted by Plummer & Associates on the Chief Executive Officer education at the top 100 retailers in the United States shows that today over 85% have college degrees. This represents a significant increase over Plummer & Associates’ 2002 study that showed only 60% had earned college degrees. The number with advanced degrees has remained about the same; however, the new study shows the breakdown at 23% with MBA degrees and 6% with JD degrees.

Does this continuing trend mean that the industry can no longer be led by the person who starts with a push cart? Our research shows that while working your way to the top may have been a viable career path in the past, the constantly evolving and complex nature of today’s retail landscape requires that executives must couple their ground up experience with the sophistication and strategic vision gained through earning a college degree.

Retailers have consolidated from regional companies led by founding families into massive, complex businesses requiring sophisticated tools to manage them effectively. This new breed of retailers is intensely competitive and constantly looking for cost and marketing advantages to secure their market position.

Some of the complexities facing retailers today demand a command of the following disciplines:

  • Marketing – Sophisticated reporting systems have elevated the ability to forecast demand, measure customer buying pattern changes, brand awareness and customer loyalty, and help build brand value. Each retailer now operates through more than one channel, (retail, e-commerce, catalog, direct marketing) requiring that the decisions made for each channel are highly strategic.

 

  • Supply Chain Management/Logistics – Today there are tools available to help retailers secure significant cost advantages throughout the supply chain while simultaneously improving customer service. This gives retailers significant competitive advantages.

 

  • Merchandise Management – Advanced technologies are now required to source merchandise for product development, assortment planning, SKU rationalization, customer knowledge, trend analysis, and inventory and category management. The most important part is using these technological advances to increase profitability.

 

  • Finance – This function has quickly progressed from recording history to active involvement in creating value through analytics and is now vital in allowing a retailer to compete for capital against all other industries.

 

  • Legal – Our society has become more litigious making larger businesses more of an attractive target. The complexity of new regulations has resulted in an increase in legal staff. A retail leader is now required to be more involved and responsible for setting the tone of legal strategies.

 

  • Human Resources – Once considered just a major expense, Human Resources managed effectively must now create differentiation versus competition. A company’s culture and devotion to the customer are now more important than ever.

 

  • Information Technology – In the past, technology seemed to be the sole domain of the IT department. With advanced POS systems, the retailer has learned the power of information and no longer relies solely on market information provided by the vendor. Leading edge IT departments now interrelate with the entire organization by providing useful information to aid in decision making, control costs, forecast, and analyze. Companies are now operating enterprise-wide systems and the CEO must know the capabilities of these systems to ensure the company gains a competitive edge.

 

  • Global Reach –The days when retailers only operated stores in the U. S. with product only secured from U. S. sources are gone. The implications of the global activities are enormous.

 

Forward-looking retailers who saw the need for talented executives brought highly educated executives into the retail industry. In the late 60s and 70s the retail industry started recruiting top students from colleges and graduates from MBA programs. The top leaders at that time were: Jewel Tea, Federated Department Stores, J.C. Penney Co, Sears Roebuck & Company, Kroger, The Dayton Hudson Corporation, and The May Department Stores Company. Those recruiting programs have produced many of the CEOs of today’s successful retailers.

For those looking to progress up the ladder in retail, the data indicates that the career path from bagperson to CEO is no longer viable, nor practical. Retailers striving to be successful must compete for the best educated. And future leaders in retail must strive to educate themselves and that education must include minimally the rigors of earning a bachelor’s degree. Earning an MBA and/or a JD degree greatly improves one’s chances. This is not because one needs a degree to punch up a resume; rather it is the intellectual tools gained through formal education combined with on-the-job training that prepares an executive for the rigorous and evolving challenges facing retailers today.

While the 2002 study indicated no particular school had the lead in producing future CEOs, the current research indicates that a new trend is starting to develop. Harvard University has taken the leadership position having five CEOs with undergraduate degrees and five with MBA degrees. Second is The University of Pennsylvania’s Wharton School of Business with three CEOs holding an undergraduate degree. Columbia University and the Kellogg School of Management at Northwestern University are tied with three CEOs each holding MBA degrees. The University of Illinois has three CEOs with undergraduate degrees.

It is clear the retail industry needs to compete in the market place to bring the brightest talent with superior intellectual tools and education to manage the business for the future.

Retail Executives: Recruiting Executives To A Family-Owned Company

Wednesday, August 18th, 2010

 

The first blush comment from most in the recruiting industry is that recruiting executives to family-owned private businesses is difficult or near impossible. But, if you look at the facts, there are large family-owned companies that have successfully grown and have successfully recruited top talent. For example, look at Hershey, S. E. Johnson, H. E. Butt, Wegman’s, Jockey International, and Carlson Companies as prime examples of successful family-owned businesses.

In my opinion, it is not the family ownership that makes recruiting difficult. The issue is the management style of the ownership. The style of the executive evaluating the opportunity is equally important.

An executive considering joining a family-owned business has several questions to ask. These are:

What will be my future with the company? Is there opportunity for personal growth? Are there family members involved who will limit my chances for promotion?

What is the financial health of the company and is the family willing to invest more or dilute their ownership through debt or equity? Is the family willing to be open about the financials and their strategies?

How willing is the family to invest in new equipment, research, systems, etc?

Is the family open to new ideas?

Is the family willing to share interest in the business to key executives? Will this interest be developed on an open basis? Will this be on a true partnership basis?

Is the family really willing to delegate responsibilities to non-family members?

How long does the family plan to own/control the company? What will be the exit strategy for the family ownership: IPO, strategic sale, or other? Are all family owners on the same page in terms of the exit strategy?

At the same time, family owners have questions to ask the prospective executive. Among the questions are:

Is this executive really committed? Will he/she put in the effort required to take the business to the next level?

Is this executive willing to share the risk? If the economy gets soft, will this executive pitch in and work harder and smarter and also accept the earnings declines that the ownership suffers…or will this executive just move on when times are tough?

Will this executive work with us as we ponder through difficult times and difficult financing issues?

Is this executive willing to put skin in the game (i.e.: personal finances, or extraordinary effort)?

The success or failure in both parties trying to develop an effective working relationship depends on both parties’ questions being put on the table and answered truthfully and in an open manner.

The company that is not willing to provide full and honest disclosure and not truly willing to answer all the executive’s questions will make recruitment difficult. A recruiter will be able to bring in a hired hand but will not be able to recruit a true partner for the business.

The executive who wants the upside but who also wants guarantees is probably not the right executive either.

For a recruiter, the challenge is to quickly learn about the family and their willingness to answer the questions candidates will ask. To the degree the family is willing to answer those questions will determine the level of candidate the recruiter will be able to bring to the table. This requires a skilled executive recruiter who knows how to assess family organizations and also assess candidates for their ability to fit the circumstances.

As a side note: These issues are not as important with larger family-owned public companies. In smaller family-owned public companies these issues and the management style are still important. Even though the ownership and the financial data is public information, the family involvement in the business and their longer term intentions need to be disclosed to potential executives. What is most important for the executive to discover in these circumstances is whether the family self-interests are aligned with the short- and longer-term needs of the business.