Old Names in the News: Sears, Zakheim, Saporito

Did you get all the presents you wished for during this holiday season? I purposely chose the word “wish” as it conjures up the image of the Sears Wish Book, the once-giant retailer’s annual encyclopedia of gifts for all ages. “In 1968,” according to Sears Archives, “the Wish Book totaled 605 pages, with 225 pages devoted to toys and 380 pages to gifts for adults.”

During this all important shopping season, when merchants often garner most of their sales and profits,  several articles have surfaced about the fall of Sears (and sister company, Kmart) from iconic to catatonic (https://www.cnbc.com/amp/2018/12/19/sears-plans-more-store-closures-as-challenges-mount-for-lampert-bid-.html and https://www.bloomberg.com/news/articles/2018-12-20/layoffs-loom-large-as-banks-weigh-funding-lampert-s-sears-bid). 

Today, Friday, CNBC reported Sears will shutter 80 more Sears and Kmart stores on top of the 182 closings it announced after it filed for bankruptcy protection October 15 (https://www.cnbc.com/amp/2018/12/28/sears-closing-80-more-stores-in-march-faces-possible-liquidation.html). 

Amazon and other Internet retailers are being blamed for the truncation and potential demise of the once largest retailer in the world. Amazon et al might be hammering the nail into Sears’ coffin, but the truth is Sears was fading into obscurity years before Jeff Bezos conceptualized Amazon in 1994. 

Consider the January 1980 edition of Chain Store Age. The cover story: “Why America Is Not Shopping Sears.” In 15 pages backed by extensive consumer research, articles detailed the troubles Sears faced, some of its own making, some because of newer, more focused competition, some the result of new market conditions including the proliferation of large shopping centers and the elimination of retail price maintenance laws that allowed brand name goods to be sold at discount prices. Shoppers no longer had to wait for sales of major appliances, consumer electronics, sporting goods, tools and other desired merchandise. They were available every day at the discount store located closer to their homes. 

Though still the largest retailer in the world back in 1980, Sears could not maintain that position as more nimble, more focused retailers took bites out of its market share. Best Buy. Circuit City. Home Depot. Lowe’s. Toys “R” Us. Sports Authority. Target. Wal-Mart. Even Kmart snatched sales from Sears. 

Sears reacted by turning commissioned sales people into hourly workers. Bad decision. They lacked incentive to sell. 

Apparel never was a Sears strong point. Baby boomers wouldn’t be caught dead wearing Sears clothing, not when the mall had dozens, even a hundred, specialty stores offered fashion right styles. 

Besides, walking into most Sears stores was like entering a mausoleum. Whereas department store mannequins were freshly dressed and lifelike, Sears mannequins appeared lifeless. Store decor and lighting were old fashioned and stark. There was no drama inside. It was as if Sears executives had never heard of the concept of retailtainment. 

When Sears filed for bankruptcy protection I posed the following: “Will Sears and Kmart be salvaged or scuttled? Ask yourself these questions: When was the last time you shopped Sears or Kmart? If one or both stores disappeared, would you notice? Would you miss them?”

(https://nosocksneededanymore.blogspot.com/search?q=sears)

Nothing has transpired to make me change my opinion.

Designer Prices: I have always eschewed clothing that outwardly displays a designer’s name or brand logo. I am okay with wearing Adolpho blazers or Givenchy suits with the labels discreetly sewn onto inside breast pockets (though since my retirement I rarely wear suits). 

Outward chauvinism is not my style. In fact, I have long advocated a reversal of the standard bill of fare. Rather than charging more for a polo shirt or pair of jeans that shout out the designer’s or brand’s name, I believe such walking billboards should be sold at a discount as payment for the publicity they provide.   

Two of my cousins are optometrists. As their practices are in Philadelphia and Jacksonville it was not convenient for me to patronize them when I needed new eyeglasses. 

But I did pick their brains about the differences between designer and generic frames you might find in a mass market optical store such as Lenscrafters or Visionworks. 

Their responses: If you are concerned about the quality of a generic frame, don’t be. If you find a generic frame you like, buy it. Designer frames may provide a design that intrigues you, but the cost will be much higher. 

Their bottom line—find a lower priced generic frame. 

Which brings us to the recent scam Payless ShoeSource performed on fashionistas in Los Angeles. Payless tricked them into believing its $19.99 man-made women’s shoes were leather, designed by Bruno Palessi and worth hundreds of dollars. Here’s a Washington Post article to click on in case you missed the charade: https://www.washingtonpost.com/business/2018/11/30/they-had-us-fooled-inside-paylesss-elaborate-prank-dupe-people-into-paying-shoes/?utm_term=.46128e293bcc

Degrees of Separation: Many of my blog postings are generated by current events that bring up incidents or people/companies from my past (the Sears piece above is an example). 

So I was doubly stimulated when reading The New York Times on line in the middle of the night earlier this week.

The first article, a profile of acting secretary of defense Patrick Shanahan, referenced “Dov Zakheim, a former top Pentagon official in the George W. Bush administration” (https://nyti.ms/2Rbn95i).

Dov and I were elementary school classmates at Yeshiva Rambam in Brooklyn some 60 years ago. He, and I, were considered Talmudic scholars by our teachers. Apart from his service in the Pentagon, Dov went on to become a rabbi. 

The second article was an Op-Ed piece entitled “Trump’s King Minus Touch,” by Bill Saporito, a contributor to The Times editorial board (https://nyti.ms/2Rfxj4Q). Bill and I worked together on Chain Store Age Supermarkets 40 years ago. He left to become a photographer for a Pittsburgh paper, if memory serves me right, and afterward began a long association with various Time Inc. magazines including Fortune and Time. 

Seeing their names in print is a nice way to keep up with old acquaintances. 

If Sears and Kmart Closed, Would You Care?

Perhaps if you’ve been paying attention to news unrelated to Hurricane Michael or new Supreme Court justice Brett Kavanaugh or the baseball playoffs or the 1,300 point plummet of the Dow Jones Industrial Average Wednesday/Thursday, perhaps you read or heard a story about the possibility venerable, no longer venerated, Sears and stepsister retailer Kmart may file for Chapter 11 bankruptcy protection as early as next Monday.  

Chapter 11 is not a death sentence. It is a reorganization tool meant to provide management with the time and financial freedom to resurrect a dilapidated business. Macy’s passed through Chapter 11. So did Best Buy. Plenty of other retailers, on the other hand, went from Chapter 11 into Chapter 7—liquidation. 

For more than 40 years I have been tracking the misfortunes, and occasional fortunes, of Sears and Kmart as they strived for relevance as societal and competitive realities evolved around them. (Once antagonists, Sears and Kmart became stepsisters as part of financier Eddie Lampert’s design to turn them around, or at least turn a profit for himself, by selling off their assets, including real estate and brands such as Craftsman.)

For 30 of those 40 years as editor and publisher of Chain Store Age, I met with the consecutive line of chairmen and chief executive officers of Sears and Kmart. Each sincerely believed his formula (it was always a he, never a she) contained the magic potion to resurrect a flailing business (that’s not a typo, I meant flailing). Perhaps, if Walmart and Home Depot and Amazon had not been imagined Sears and Kmart might have had a chance. But retailing is an industry that rewards innovation, particularly as it applies to efficient distribution. From better locations to quicker dissemination of products from manufacturer to store shelf to, especially in Amazon’s case, a consumer’s home, competitors outdistanced Sears and Kmart in their ability to meet consumer expectations.  

Sears was built with the mythology of the “Father Knows Best” family in mind. Even its one time diversification strategies—Allstate Insurance and the Discover card—reinforced the fulfillment of household needs. 

Kmart sought to capitalize on a growing middle class seeking cheap consumer goods in convenient self-service stores. 

But if the lady or teenage girl of the house needed something stylish to wear, Sears and Kmart were the last places they would shop. A department store or specialty store or Kohl’s fit the bill. Maybe even Target.  

If the man of the house was going to work on a home improvement project he turned to a local home center retailer, that is, before Home Depot or Lowe’s swallowed up their customers, as well. Electronics sales went to Best Buy. Toys to Toys “R” Us—the Sears Christmas Wish Book succumbed long before Toys “R” Us did. 

Kids could be dressed in Sears or Kmart clothing. Until, that is, they were old enough to voice their own apparel preferences. 

Will Sears and Kmart be salvaged or scuttled? Ask yourself these questions: When was the last time you shopped Sears or Kmart? If one or both stores disappeared, would you notice? Would you miss them?

For most of my professional life Sears and Kmart represented major portions of the copy that flowed through my editor’s desk. I walked their stores across the country. I shopped their stores. As recently as two weeks ago I bought some supplies in Kmart. 

Apart from the yawning gap closing the White Plains Sears and Kmart would have on their respective shopping centers, I cannot say I would miss them. I’d experience some personal nostalgia, but, no, I could not say I would miss them.

Is Sears Worth Holding?

It’s the post-Christmas season, that favorite time of year for stock analysts and business journalists to bang out on their keyboards early obituaries for Sears Holdings, operator of Sears and Kmart stores. The latest hospice vigil comes on the heels of the company’s announcement it would close 120 stores after disappointing holiday sales.

For more years than not over the last nearly four decades, I have been part of the annual exercise of wondering just how long these two venerable retail chains could survive. Seemingly year after year, customers have abandoned Sears and Kmart for fresher, more nimble, more price sensitive competitors, be they Wal-Mart, Target, Best Buy, Bed Bath and Beyond, Old Navy or Amazon.com.

A true test of whether a company can, or should, survive, is the answer to the following question—would you miss it if closed its doors forever? Syms and its subsidiary Filene’s Basement are in the process of shuttering. I was a frequent Syms shopper. I must have bought at least 20 suits from Syms over the years. Though I haven’t bought a suit in about five years, I still liked walking the stores, both the one across the street from my former office and the outlet in Westchester. Just last week, for old times sake, I stopped by the Syms in Westchester. It was a depressing visit. Customers were picking over the bones of the remaining merchandise and fixtures. I’ll miss it. Maybe Century 21 will take its place. That would be nice.

Would you miss Sears or Kmart? I would. More Sears than Kmart. I’ve bought many a tool from Sears. Craftsman tools. Break them and get a free replacement. I broke the shaft of an awl back in my firewood-splitting days. Brought it back to Sears for a replacement, no questions asked. I’ve bought washing machines, dryers, a freezer and a refrigerator. I’ve bought apparel there as well, nothing fancy, just some shirts, underwear, Levi’s jeans. Everything I’ve bought at Sears, it seems to me, I bought on sale, perhaps even clearance. And that’s part of the company’s problem. Almost nothing in Sears is worth buying at full price, nothing enticing to make me want to go to Sears. Even its Consumer Reports top-rated laundry machines weren’t appealing until they went on sale and the salesman had to throw in added incentives.

Still, knowing Sears was there, and possibly carried what I wanted, was a comfort, a crutch to my consumerism. I’d miss Sears if it weren’t there. There was a time, from 1980 through about 2000, when I was fortunate enough to be the first journalist to interview every new, incoming head of Sears. I also knew the chief executives of Kmart, back then an independent company not part of Sears Holdings.

I can’t say I enjoy shopping at Kmart. It just never feels right inside its stores. I never find any apparel, except Hanes or Fruit of the Loom underwear, worth buying. Except, one time I bought a silk tie in a Kmart outside Detroit. I can’t tell you how many of my friends complimented me on that tie. I resisted asking them for $3 so I could buy one for them.

Day 116 of Nat'l Emergency: Reading, Shopping, Fixing and Trump's Bucket List

What 10 years of retirement couldn’t accomplish the coronavirus did in less than three months. I’m finally reading books. 

A disappointment of my retirement is that, with rare exceptions as for a course I might be taking, I never engaged in reading novels or non fiction books. Shameful. I know. 

In the four months since quarantine began, however, I am averaging a book a month, spurred on, I readily admit, by Gilda’s voracious reading appetite. 

I used to explain my lack of reading by saying reading put me to sleep. Part of my apnea condition.

Now, when I first lay down in bed, or when I wake up in the middle of the night and cannot readily fall back to sleep, I wind up reading 45 to 90 minutes. As there’s no rush to wake up early the next morning, I simply tack on extra hours before rising from bed. 

I’m still ashamed, but less so.

Gilda Is No Golda: As in “Fiddler on the Roof.” She doesn’t want to hear, much less interpret, my dreams.  

Must be because I’m no Tevye. 

Trader Joe’s has it in for me. I shop very selectively at Trader Joe’s. I’m only interested in dark chocolate mint candies and dark chocolate mint cookies, the key being dark chocolate is better for you than milk chocolate. 

Twice in the last few months, however, the specialty grocer has discontinued two dark chocolate mint cookies I found irresistible.

After a futile Internet search for comparably priced cookies I stumbled across a slightly higher priced alternative at our local Stop & Shop. 

For now the mint candies are still being sold, but I am wary Trader Joe’s does not realize a third strike would end my patronage.

Rain Man: It’s about to thunderstorm outside as I write this note Friday afternoon. Rumbles already have presaged the downpour. But as anyone who has recently driven past the Grassy Sprain reservoir can attest, the water level is the lowest in years, if not decades. Since we’ve had few drenching rain days this year I wondered if we were subject to drought conditions made all the more severe by our constant hand washing.

Mind you, I’m not complaining about sunshine filled days. Our solar panels are offsetting all or most of the cost of electricity to run the air conditioning. But upon returning home the other day after seeing the reservoir for the first time this year I googled an inquiry.

Apparently, regular maintenance on the spillway and gatehouse gates began in January that necessitated draining most of the reservoir to a level that would allow work but not kill any of the fish in the lake. It will take at least half a year for nature to refill the reservoir.

Just thought you’d like to know.

Home Improvement Tip of the Day: After doing two loads of wash and putting in towels for a third our 10-year-old Kenmore washing machine wouldn’t start. I called Sears Home Services and set up an appointment.

There was a glitch in the electronic ignition. I anticipated a costly repair bill or, more probable, purchase of a new washing machine.

The repairman said he’d try a trick to restart the machine. By simultaneously replugging the washer into a socket while pushing repeatedly on the power button the machine might start. It did! 

Thank you repairman. Thank you Sears. Coincidentally, a week later Reuters reported that Sears is considering selling its repair and home improvement business (https://www.reuters.com/article/us-sears-homeservices-exclusive/exclusive-sears-exploring-sale-of-home-improvement-business-idUSKBN242780).

Stockpiling Over?: Here’s another news flash: At least in Westchester County, coronavirus-inspired hoarding seems to be a condition of the past. 

During recent trips to Costco and Stop & Shop there were no lines to get in, checkout was hassle free and products, even toilet paper, were plentiful. More importantly, everyone was wearing a mask.

A product that might be in short supply in apparel stores, depending on your neighborhood, are Hawaiian shirts. Seems the flowery, loose fitting tops are a must-have for creatures of the dark side of heavily armed right wing extremism (https://www.nytimes.com/2020/06/29/style/boogaloo-hawaiian-shirt.html?referringSource=articleShare).

Who knew a symbol of paradise could be turned into a symbol of hate?

Bucket List: There’s a simple explanation why Donald Trump is proceeding with an extravaganza at Mount Rushmore to commemorate Independence Day despite state and national officials warning it is unwise to have a fireworks display over parched land witnessed by thousands of unmasked, not socially distanced, attendees. 

The ego-boosting celebration is on his bucket list.

Unless he wins reelection, tonight’s big show under the stoney eyes of four presidents, none of whom Trump considers greater than himself, would be his last chance to display presidential upsmanship.

I wonder how many Hawaiian shirts will be worn by the 7,500 expected attendees?

Lessons From Tariffs, Import Quotas and Walmart

Let the trade wars begin.

In an effort to resuscitate American industry, Donald Trump launched the first salvo Thursday in what may become a global trade war by imposing a 25% tariff on imported steel alongside a 10% tariff on imported aluminum. How the world will react, and if Trump has a counter-counterattack, remains unclear at this time.

It is not the first time America has sought to level off its unbalanced trade, particularly with China and other countries that flood—some would say, dump—cheaper alternatives to domestic U.S. production. In a global economy, manufacturers seek out the least expensive raw materials, labor and finished products. Too often, that means consumers at home and abroad think American made goods are overpriced. 

Heck, relocating supply lines has long been practiced by American industry. Textile companies fled the North to establish plants down South where non unionized workers earned less than their northern counterparts. But even lower southern wages could not compete with foreign laborers in Latin America and Asia. Executives fluent in global sourcing minutia shifted manufacturing from country to country to stay below import quotas established by the American government.

Trump champions America First, so it is not surprising he would favor steel and aluminum tariffs, particularly since underutilized plants are mostly located in Rust Belt states Trump won in 2016 and needs to win in 2020—Ohio, Pennsylvania, West Virginia, Michigan, Wisconsin. It seemingly does not bother Trump that prices of many goods that include steel and aluminum components will rise and could cost more jobs in related industries than would be created by the metal makers.

Trump, who spoke out against Chinese dumping practices years before his presidential run, was not the first business titan to see the danger of a depleted American manufacturing base. Back in 1985, Sam Walton positioned Walmart as an advocate of “Buy America.” 

I went to the source—my bound copies of Chain Store Age—to review how the retail industry and I reacted to import quotas and to Mr. Sam’s defensive ploy to combat a growing criticism of his company, at $6.5 billion, the seventh largest general merchandise chain, a little less than a third the size of $21.7 billion Sears, Roebuck and Co. and Kmart’s $21.1 billion. (Today, Walmart is the largest retailer in the world with sales of $485.9 billion in the recently concluded fiscal year. Sears and its now-sister company Kmart have a combined volume of less than $17 billion). 

Not surprisingly, retailers, who normally supported Reagan administration policies, railed against quotas. Under the headline, “Protectionism: Policies leave chains vulnerable,” CSA reported in September 1984 that tighter import quotas fueled dramatic price increases in many merchandise categories. Kmart, for example, estimated the cost of goods from China increased 25%. 

Fast forward to Trump’s imposition of tariffs and the reaction is no less muted. Thursday, National Retail Federation president and CEO Matthew Shay said, “A tariff is a tax, plain and simple. In this case, it’s an unnecessary tax on every American family and a self-inflicted wound on the nation’s economy. Consumers are just beginning to see more money in their paychecks following tax reform, but those gains will soon be offset by higher prices for products ranging from canned goods to cars to electronics.

“The retail industry is extremely concerned by the administration’s apparent desire to ignite a trade war, where the net losers will be the very people the president wants to help. On top of steel and aluminum tariffs, retailers are troubled by the direction of the ongoing NAFTA negotiations and the threat of additional tariffs on consumer goods from China. The true greatness of America cannot be realized when we build walls blocking the free flow of commerce in today’s global economy.”

Importing helped catapult the Bentonville, Ark.-based company into a global powerhouse. To be sure, few if any of Walmart’s competitors disdained importing. But Walmart’s heralded logistical and technological efficiencies accelerated its growth.

When Sam Walton started speaking publicly about imported goods in August 1984, his company was a burgeoning juggernaut but still not near the size of Sears and Kmart. He framed the challenge as dual pronged—reduce the trade deficit by buying American made products, but if that is not possible, develop products and jobs in Mexico, Central America and South America to “improve the standard of living for the average citizen in Central and South America.” 

Within a year Walton launched a “Buy America” program. Skeptics abounded. The program persisted, but in December 1992, five months after Walton died, NBC Dateline confronted company CEO David Glass with allegations products marketed as Made in America really were imported from Bangladesh. The adverse publicity led to the program’s demise.

Several years ago, Walmart started a Made in America program. It proudly touts a claim that “two-thirds of what Walmart spends on products sold in U.S. stores is made, sourced, assembled or grown within the USA.” That is “according to our suppliers,” Walmart acknowledges.

That provides a wide definition of American made. (Sales last year in domestic Walmart stores and Sam’s Clubs totaled $365.2 billion.) It cannot be argued that Walmart’s expansion and buying practices did not gut many a small town of local retailing and small malls, as well as contribute to the closing of many domestic manufacturing plants supplanted by foreign suppliers. 

But it is equally indisputable that shopping at Walmart has stretched consumer dollars and helped keep inflation in check.

It’s too soon to say what lasting impact Trump’s tariffs will have on sales, on inflation, on employment. But it’s safe to say they will not markedly change our balance of trade with the rest of the world.

More News Linked to My Life

The news media keeps coming up with articles that touch upon my life. Here are news stories just in the last two weeks with links to my past. 

Mimi Sheraton died last week. I became aware of her existence when I worked as a field editor for Nation’s Restaurant News, sister publication of Chain Store Age, and she was the food and restaurant critic of The New York Times (https://www.nytimes.com/2023/04/06/dining/mimi-sheraton-dead.html?smid=em-share).

In the fall of 1977 I was looking forward to my first visit to New Orleans, that year’s site of NRN’s annual foodservice conference. Gilda would be accompanying me, but our excitement was tempered by a review Sheraton wrote of the food scene in the Crescent City. She found it wanting, except, she noted, for an out-of-town humble shack called Mosca’s where she had the most divine fried oysters, garlic chicken and barbecue shrimp, all cooked Creole Italian style.

Naturally, we decided to go there, cautioned by Mimi’s article that no reservations were taken and that the last guests must arrive by 9 pm. Along with a fellow editor, Connie, and her husband, Bill, we left plenty of time to taxi from the Fairmont Hotel in downtown New Orleans down Highway 90 to Avondale, almost 20 miles away. 

Though the cabbie claimed to know how to get there, it quickly became evident he did not. We kept double-backing and crisscrossing roadways, looking for Mosca’s. This was way before cell phones; there weren’t any public pay phones along the dark roads we rambled on. We were four hungry and squished adults sitting in the back of a Mercury Marquis (the unofficial New Orleans taxi model). Since I had recommended Mosca’s, my seatmates were getting quite upset with me. 

Finally, at 9:05, we came upon two whitewashed buildings supporting a backlit Budweiser sign. Lots of cars out front, on the grass. We begged entry, explaining the taxi driver couldn’t find Mosca’s. They took pity on us, but advised it would be an hour and a half before we’d be seated. We could stand at the bar. 

Gilda, Connie and Bill were not happy, even with $1 drinks, 25 cents for sodas (remember, this was Louisiana, 1977). We waited just 45 minutes to be seated, a few tables away from where Momma Mosca sat watching over her customers. We ordered Mimi’s recommended dishes. They were more than divine. They melted away Gilda, Connie and Bill’s collective anger. It was, we all agreed, one of the best meals we ever ate. 

Shun Lee Shines: Unlike the current brouhaha over the quality of Shun Lee 98th Street on Manhattan’s Upper West Side (https://www.nytimes.com/2023/04/07/nyregion/new-york-shun-lee-chinese-restaurants.html?smid=nytcore-ios-share&referringSource=articleShare), some of the best Chinese food I’ve eaten was inside Shun Lee Palace, the much-lauded, and rightly so, restaurant on East 55th Street between Lexington and Third Avenues. Because the restaurant was around the corner from my long-time office on Park Avenue my colleagues and I ate there quite often, at least once every two weeks. 

The food was so good that it smoothed over a major rift between Chain Store Age and Sears, Roebuck & Co. 

In 1983 we ran a long article about problems at Sears, Roebuck & Co. Upset, the CEO of Sears dispatched the head of the public relations department from Chicago to express corporate displeasure. I took him and his assistant to Shun Lee Palace. Considered by some to proffer the best Chinese food in the city, Shun Lee melted away any semblance of protest from my Windy City visitors. 

They so thoroughly enjoyed the meal that we ordered a second round of each dish. For such an honor, the chef emerged from the kitchen to personally bow his respect. 

Balancing Act: The other day National Public Radio interviewed one of the hosts of its “All Things Considered” program, Mary Louise Kelly. She has just written a book, “It. Goes. So. Fast. The Year of No Do-Overs,” a memoir about balancing parenting and work.

Kelly turned down a second assignment to cover the war in Ukraine so that she could spend time with her son James during the last weeks of his senior year in high school. She previously had to miss seeing him play soccer because most games started at 3 pm when her radio show is broadcast live. 

By making time for family she was able to be at a game when he scored a winning goal with just three minutes remaining. “Oh, it was not just any soccer game. The soccer game in question was James’ senior year. It was for the state championship. He scored with a header with three minutes on the clock,” Kelly related.

I, too, missed seeing our son, Dan, play for his high school soccer team. Work. Travel. Travel for work. But I did show up, for an away playoff game against Mamaroneck in his senior year. 

I got there at half-time. The score was 0-0. Dan was the starting goalie for White Plains. As the second half began Dan was not in goal. He wasn’t sitting on the bench. I asked some spectators what happened. They said Dan had been injured preventing a goal. A few minutes into the second half Mamaroneck scored the game’s only goal.

Dan didn’t play college soccer. He played Ultimate Frisbee. Gilda and I travelled to watch him play tournaments in the New York metro area, and went to Boise for the college championships (the Tufts men’s team finished 11th in the country). And we were in Sarasota, Fla., when his post-college club team finished second in the country (we did not go to Prague to watch the team earn the rank of fifth in the world). 

 

Finding the Truth Behind the Numbers

The news Friday that Dow Chemical and DuPont are seeking approval to merge brought back memories of my first meeting with Leo J. Shapiro, whose expertise in social science research was instrumental in enhancing my journalism career and in making Chain Store Age unique, informative, must reading for retailers in the last two decades of the 20th century and the first 10 years of the 21st. Leo passed away in Tucson last month. He was 94.

The first time I met Leo, in 1979, in his firm’s then offices on the 37th floor of Lake Point Tower on the edge of Lake Michigan in Chicago, he observed that companies often choose a branding message in conflict with their everyday functions. 

Dow Chemical’s slogan back then was “Common Sense - Uncommon Chemistry.” DuPont’s was “Better Things for Better Living … Through Chemistry.” Yet both companies produced napalm and Agent Orange, the notorious herbicide used by the American military to defoliate much of Vietnam and consequently, tragically, causing “serious health issues—including tumors, birth defects, rashes, psychological symptoms and cancer—among returning U.S. servicemen and their families as well as among the Vietnamese population.”

In 1979 I had recently taken over as editor of Chain Store Age, inheriting a tradition of publishing a full-issue study in December on what we called a Great Retail Institution. The retailer we profiled always cooperated. For 1979 it was the F.W. Woolworth Corporation. 

Cooperation would not be the case for our 1980 profile—Kmart, at the time the second largest general merchandise retailer in the world with $14.8 billion in sales, behind Sears’ $16.9 billion (by comparison, Wal-Mart was a minuscule though growing chain with sales of only $1.6 billion. For 2014, Wal-Mart’s sales exceeded $473 billion; for the now combined Sears/Kmart, sales reached just $31.2 billion, of which $12.1 billion came from Kmart). 

Without Kmart’s cooperation we had to devise an alternative plan to secure information about the strengths and weaknesses of the chain. Publication director Paul Reuter spotted Leo’s name in an article in Advertising Age. It said his research firm, Leo J. Shapiro & Associates, had been following Kmart for many years. 

During that first meeting Leo explained that retailers, as do many companies, persist in doing things the same old way instead of moving on to the next wave of innovation. Sears, he opined, should have started a discount chain à la Kmart. Kmart, in turn, should have evolved into the more upscale Target or the more rural Wal-Mart. 

With Leo’s help Chain Store Age produced a publishing home run—more advertising than ever before and an editorial product recognized for its clarity and insight not only within the retail industry but also by our publishing brethren. The Kmart full-issue study was one of five finalists for a National Magazine Award, a rare achievement for a trade publication. 

Success in 1980 meant 1981’s December issue would be more challenging. Rather than profile a retailer we opted to work with Leo to produce the retail industry’s “1st Consumer Buying Intentions Study: Who, What, Where & Why They’ll Buy.” The study did not, as we expected, sell as well as the Kmart issue. 

But I almost fell off my chair when Stewart Orton, then chairman and CEO of Foley’s Department Store in Houston, in his speech accepting the Gold Medal Award of the National Retail Federation at its January 1982 annual luncheon, exhorted the thousands in attendance to read Chain Store Age’s December buying intentions study issue. 

Over the 30 years I worked with Leo and his partner, George Rosenbaum, Chain Store Age expanded the role of trade publishing. We innovated and published monthly and annual buying intentions studies as well as surveys on technology, credit trends, payment systems, loss prevention, store atmospherics, logistics and other topics never before distributed by a publication for the retail industry. Moreover, by including topical questions in their omnibus monthly national polls, Leo and George provided Chain Store Age with up to the moment insights on consumers.

“Garbage in, garbage out” is a widely held adage for anyone doing research. I always thought I knew what I wanted to study, but it was only after talking with Leo or George that I discovered what was truly worth researching. 

Show Me a Hero and Other Media Notes

They never called me back for my star turn as an extra on Show Me a Hero, and now the six-part HBO movie will begin Sunday night without me (http://nyti.ms/1Pa4ITu).

You may recall I attended an open casting call for extras at Manhattanville College last summer. About two months later I was contacted to show up in Yonkers for what normally is a 10-12 hour shoot for the princely sum of $100. That would be for the whole day, not an hourly rate.

Trouble was the day conflicted with the first day of Succoth. I opted for cries of hosanna instead calls for “action,” confident the producers would reconnect with me for another day as they indicated they would if I could not make the first day’s production. They never called.

So as I sit at home tonight and watch the depiction of the tumultuous time in Yonkers when the city underwent court ordered housing desegregation I will wonder in which scenes would I have been cast, and would I possibly have garnered a speaking part, even if it were only to shout verbal abuse at the mayor who reversed his election campaign position attacking the court ordered mandate only to later push for integration.

Ah well, a lost opportunity.

Woodstock Nation: Here’s another lost opportunity, this time Gilda’s, not mine. This weekend marks the 46th anniversary of the Woodstock music festival in Bethel, NY. 

Gilda had tickets to attend but chose to spend the weekend in Brooklyn with her boyfriend, another one of my ultimately less-than-worthy predecessors. She gave her tickets to friends, but they, too, did not make it to Yasgur’s Farm as Route 17 did not live up to its nickname as the Quickway to the Catskills, but rather became an impassable parking lot.

By the time the film Woodstock came out in 1970 Gilda and I were dating. When she saw conditions at the festival, the mud from torrential storms and the mass of people, Gilda had no regrets she passed on the opportunity to be part of counter-culture history. 

By the way, if you haven’t seen Taking Woodstock, a memoir-based 2009 film by Ang Lee on how the festival came to Yasgur’s Farm, it’s worth viewing.

The Man Behind Sears: For many years I thought of Sears, Roebuck & Co. as the prototypical WASP, or at the very least Christian, company. Nary an executive had even the slightest Jewish-sounding name.

The truth, however, was much different during the early years of the enterprise, as I learned when editor of Chain Store Age. The company became successful after Julius Rosenwald joined as part-owner. Rosenwald’s success allowed him to set up a philanthropic fund in 1917 for “the well-being of mankind.” Chief among the beneficiaries of his charity were Afro-American communities. A new documentary, Rosenwald, provides a picture of his commitment to the less fortunate but equally deserving (http://nyti.ms/1IPG3jh).

The Truth About Black Friday

I expected better from the NY Times. I did not expect The Times would recycle, as it did in today’s article on the troubles at Sears Holdings, the often-reported but factually false statement that “retailers make all their money at Christmas. Or they don’t make any money at all.”

Black Friday. How often have we been “treated” to media reports that Black Friday, the day after Thanksgiving, derived its name because it is the day when the ledger books of retailers turn from red ink to black as shoppers rush out to buy, buy, buy all the stuff they’ll put under the Christmas tree, or Hanukkah menorah, for friends, family and mostly themselves?

Perhaps at one time, when retailing was an industry of mostly small, independent merchants, the Black Friday tale was true. But in today’s chain-store dominated retail world, most companies already are flush with profits. At the risk of bogging you down with too much data, take a gander at the list of 54 retailers below. All of them are public companies that reported results through the third quarter of their current fiscal year (the period ended for most around October 31, well before Black Friday). Next to each name are its net earnings in 2011 versus the same nine-month period in 2010. Losses are noted in parentheses.

You’ll notice that of the 54 companies, just 12 reported losses this year; nine did so a year ago. Some companies, such as Big Lots and Lowe’s, had lower profits this year compared to 2010, but they still showed black ink well before Black Friday.

It is true a bad holiday shopping season could easily wipe out any accumulated profit during the prior 39 weeks. But that doesn’t excuse inaccurate reporting that retailers make all their money at Christmas. Though we will never be spared the incessant hype for Black Friday and beyond, hopefully next year we won’t be told companies like Macy’s, which recorded more than half a billion dollars in net earnings through October, needs Black Friday to start earning a profit.

Company—9 mos. 2011—9 mos. 2010
Wal-Mart $10.980 billion vs. $10.781 billion
Target $1.948 billion vs. $1.885 billion
Dollar Tree $300.4 million vs. $234.8 million
Big Lots $92.3 million vs. $112.5 million
Dollar General $474.2 million vs. $405.3 million
Duckwall Alco ($550,000) vs. ($5.4 million)
Fred’s $23.6 million vs. $21.0 million
Home Depot $3.109 billion vs. $2.751 billion
Lowe’s $1.52 billion vs. $1.73 billion
Sears Holdings (includes Kmart) ($743 million) vs. ($232 million)
Belk $57.5 million vs. $32.6 million
Bon-Ton ($90.3 million) vs. ($63.5 million)
Dillard’s $322.4 million vs. $70.0 million
JC Penney ($65 million) vs. $118 million
Macy’s $511 million vs. $180 million
Saks $37.8 million vs. $22.9 million
Nordstrom $447 million vs. $381 million
Kohl’s $711 million vs. $626 million
Ross Stores $465.2 million vs. $393.0 million
Stage Stores ($1.7 million) vs. $5.7 million
Stein Mart $14.1 million vs. $29.9 million
TJX $1.02 billion vs. $1.01 billion
Urban Outfitters $146.0 million vs. $197.7 million
Abercrombie & Fitch $108.1 million vs. $57.7 million
American Eagle Outfitters $100.4 million vs. $53.6 million
Buckle $95.4 million vs. $85.2 million
The Children’s Place $53.0 million vs. $51.0 million
Gap $615 million vs. $839 million
Ann Taylor $84.4 million vs. $65.4 million
Cato Corp. $54.7 million vs. $47.9 million
Charming Shoppes $11.1 million vs. ($23.6 million)
Chico’s $115.8 million vs. $94.7 million
Coldwater Creek ($86.9 million) vs. ($7.1 million)
Limited Brands $491 million vs. $352 million
New York & Co. ($28.0 million) vs. ($91.5 million)
Talbots ($58.6 million) vs. $13.6 million
Wet Seal $14.0 million vs. $7.3 million
Big 5 Sporting Goods $11.7 million vs. $16.6 million
Cabela’s $73.0 million vs. $45.9 million
Dick’s Sporting Goods $152.8 million vs. $94.6 million
Golfsmith $6.5 million vs. $222,671
Hibbett Sports $43.2 million vs. $33.9 million
Office Depot $75.3 million vs. $53.7 million
Staples $701.1 million vs. $607.2 million
Books-A-Million ($10.4 million) vs. $2.2 million
Build-A-Bear Workshop ($8.1 million) vs. ($8.2 million)
Michaels Stores $79 million vs. $0
Toys “R” Us ($194 million) vs. ($162 million)
GameStop $165.2 million vs. $170.2 million
Williams-Sonoma $114.3 million vs. $86.8 million
Guitar Center ($64.8 million) vs. ($54.2 million)
Best Buy $467 million vs. $626 million
RadioShack $60.3 million vs. $149.1 million
Tiffany $260.8 million vs. $187.2 million


(Editor’s Note: This will be the last posting of 2011. Thank you all for sticking with me. If you like my musings and rants, tell a friend or relative to log on and sign up. It’s free, and sure to be topical and probably controversial in 2012. I hear there’s an election coming up... Have a happy and healthy New Year!)

Predictions Come True

I warned you the day before the election last week we were on the cusp of the inauguration of the 2016 presidential campaign. If you took my warning to heart you would not be too depressed by the insipid chatter from pundits already handicapping the race four years hence. They’ve conducted polls—Hillary and Mike Huckabee are frontrunners of their respective parties. 

Personally, I like Stephen Colbert’s idea. Let’s not spend time on 2016. Tuesday night Colbert zeroed in on the 2072 election, a contest he said would be between Robo-Cheney and a swarm of sentient nano hornets. He did not predict the winner.

Hornets. Seems Tuesday was a big hornets day for me. Earlier, in Bible class (Exodus 23:28), hornets were part of God’s arsenal in support of the Israelites’ conquest of the land of Canaan (“And I will send the hornet before thee, which shall drive out the Hivite, the Canaanite, and the Hittite, from before thee”). 

Last week’s post on the election also contained a tongue-in-cheek suggestion that the United States bifurcate itself into Blue and Red State countries. Seems I wasn’t the only one thinking along those lines. The Huffington Post reported residents of 42 states have submitted petitions to secede from the Union. Here’s the list: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Delaware, Florida, Georgia, Idaho, Illinois, Indiana, Kansas, Kentucky, Louisiana, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, New Hampshire, New Jersey, New Mexico, New York, Nevada, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, West Virginia, Wisconsin and Wyoming.

The list included Blue and Red States. Maybe we are making progress toward thinking alike.

While we’re on the subject of the election, I wonder if you noticed an article in the business section of The NY Times the other day. It dealt with patent law and the problems American companies have protecting their unique products. Here’s how The Times described the article: “Sears, which sold many Bionic Wrenches last holiday season, is selling a similar product (the Max Axess) this year — only now it is made in China instead of America.”  

You can read the full article by linking here (http://www.nytimes.com/2012/11/09/business/popular-wrench-fights-a-chinese-rival.html), but the real meat of the story came near the end. Here are two telling paragraphs:

“The company that makes the Max Axess wrench and other tools for Craftsman, the Apex Tool Group, is being acquired by Bain Capital, the company founded by Mitt Romney, in a $1.6 billion deal.

“Throughout the presidential campaign, Bain was criticized on the grounds that it encouraged outsourcing by companies it buys at the expense of American workers. Apex makes many of its tools overseas. A company spokesman referred all questions to Sears.”

Romney hasn’t run Bain Capital since 1999, but his management philosophy of outsourcing American jobs is enshrined in that company. 

And remember my cautionary advice last week about buying cars from the flooded areas. Well, there's been a slew of warnings from attorneys general and consumer protection officials about cars with engines flooded not just by Hurricane Sandy but also by storms and floods in other parts of the country (dealerships across state lines have been known to swap swamped autos). So be wary out there. 

My Inner Lumberjack, SleepIQ and Does Hollywood Think the Bible Is a True Story?

You probably wouldn’t assume it by looking at me but I have a streak of lumberjack in me. It’s not just the flannel and chamois shirts I favor once the air becomes nippy.

My constant gardener, aka Gilda, loves her compost and mulch, resulting in many an afternoon spent by yours truly collecting fallen leaves to be pulverized in my Sears Craftsman Leafwacker Plus. One day last week after chopping up 15 bags of leaves I filled another 18 black, 40-gallon Hefty bags with the discards from maple and oak trees. I shredded those leaves this afternoon. 

A few years ago I bought the Leafwacker from a Craig’s List poster in New Jersey for $25 and have enjoyed the annual autumn ritual of mulching leaves. It’s a lot less laborious than my two decades-ago lumberjack toil of collecting, chainsawing, chopping and stacking tree limbs culled from the roadside for our wood-burning stove.

Anyway, there’s a back-to-nature type of pleasure I get from this exercise, which almost got stopped in its tracks this year. Shortly after starting last week, the Leafwacker ground to a halt. I thought it might have shorted out on the foil wrapper of a Twix bar that had infiltrated the leaves. I took the machine to the Sears repair shop. They said it would cost some $125 with no guarantee they could fix it. 

I passed on that “reassuring” estimate and turned to Google. Sure enough, there were several posts about sudden stoppages of a Leafwacker, including one suggestion to hit the reset button on the bottom of the inverted machine. Who knew there was a reset button? Again sure enough, the Leafwacker sprung back to life. A short while later the mulcher stopped again in mid-stream but this time I knew what to do. Hooray for technology. 

Sleep Tight: The good people who sold us our Sleep Number bed called over the weekend to ask how we’ve been slumbering and to suggest a technology add-on. With SleepIQ, we’d be able to monitor things like how many times we got up in the middle of the night, how often we tossed and turned, our heart rate and breathing rate, and how our diet affected our sleep. All this for $499.

I respectfully declined, though I would have liked to find out how SleepIQ distinguishes normal tossing and turning from the bodily movements of two people making love. 

Here’s another question I’d like the answer to—when Gilda and I recently went to the movies, we saw a preview for "50 to 1," what was said to be “based on the true story of horse racing legend Mine That Bird.”

Okay, lots of pictures these days originate from “true” stories. The next preview was for “Exodus: Gods and Kings.” It did not say the movie was based on a true story. I’m guessing the producers did not want to take sides on whether the Bible was fact- or myth-based, but I’d like to know their reasoning. 

Spoiler Alert: The movie we saw was “Gone Girl,” which contained one of the best puns I’ve heard recently. It concerned Amy Dunne who masquerades her own disappearance and possible murder. In describing missing person Amy, a TV personality said she “forged a successful career in journalism.” As the British say, brilliant.

A Long Awaited Melancholy Goodbye to Kmart

Until I went to Syracuse for graduate school in 1971, I had never stepped inside a Kmart. For that matter, in 1977 when I moved back to the New York area to join Lebhar-Friedman’s Nation’s Restaurant News as a field editor, no one on staff had been inside a Wendy’s, much less had eaten one of its juicy square hamburgers or enjoyed a Frosty, despite the company being McDonald’s most dramatic challenger for fast food supremacy back in the 1970s. Let’s call it the Big Apple Bubble. While the rest of the country patronized chain retail and foodservice stores, New York City residents were clueless to first hand experience of the mass market consumerism sweeping the nation half a century ago. 

October 1978 was a milestone month for me. I started writing about Kmart that month after I was transferred to Chain Store Age General Merchandise Edition. For the next three decades, as chief editor and then publisher, Chain Store Age would be my professional link to Kmart and all forms of retailing. 

More importantly, on October 20, 1978, our son Dan was born. 

Now, 46 years later, in the swanky resort area of the Long Island Hamptons where millionaires and billionaires, and wannabe minions, flock every summer, the last domestic full-line United States Kmart store, in Bridgehampton, will close—wait for it—October 20! 

Indulge me a little nostalgic look back on the fortunes and misfortunes of the polyester and plastic palace that was Kmart, at one time the second largest retailer in the world behind only Sears, Roebuck and Co., it, too, now just a shell of its once glorious prominence. 

Kmart was an offshoot of the S.S. Kresge Corporation, second to Woolworth in the variety store field. It was the brainchild of Harry Cunningham. Harry opened the first Kmart in 1962 in Garden City, Michigan, outside Detroit. 

1962 was a gestational year for discount stores. Among other chains started that year as retailers scurried to capitalize on consumer interest in the self-serve discount format were Woolco, an offshoot of Woolworth; Target, conceived by Dayton Hudson department stores; and Walmart, the progeny of Sam Walton, at the time the largest Ben Franklin variety store franchisee who foresaw diminishing prospects for his existing holdings. 

Of all the emerging discount store companies Kmart invested most aggressively in growth for growth’s sake. Through new construction and the purchase of competitors, even if their locations were less than optimum, Kmart became the first national discount store chain. Its “blue light” specials mesmerized shoppers. It ran national ad campaigns. It was ubiquitous. So much so that when the 1988 “Rain Man” film needed a foil understood by all Americans, it was Kmart that Dustin Hoffman’s Raymond character disparaged. Keep in mind, in 1988, Walmart had yet to penetrate many major markets. 

Kmart’s sales in 1987 totaled $25.6 billion. Walmart’s were $16.0 billion. Kmart had 2,307 stores, Walmart 1,381. Kmart’s net income was $692 million. Walmart’s $628 million.

Unbridled growth meant more sales but not maximum profits. Let me do the math for you: Walmart’s profit margin was 3.9% of sales, while Kmart’s was a mere 2.7%. 

Kmart failed to renovate and modernize stores. It lacked inventory discipline and store personnel and housekeeping standards. It failed to offer a compelling reason to shop for apparel which could generate more profit margins than hards goods like housewares and electronics. 

Gradually, regional discount stores led by Target in metropolitan markets and Walmart, first in rural areas and then in suburbia, outclassed Kmart with newer, sleeker stores, better inventory control, more dedicated store personnel, sharper product assortments. 

From 1978, when our son was born, through the turn of the 21st century, I met all of Kmart’s chief executives. They were nice men. They tried innovative programs, like inaugurating a female apparel line featuring original “Charlie’s Angel” Jaclyn Smith, setting up an exclusive household lines with Martha Stewart, starting Designer Depot, an off-price retail chain, and emulating Walmart’s entry into the supercenter format combining a full-line discount store with a full-size supermarket. The company also tried diversifying, buying or opening other formats including Sports Authority, Builders Square, Borders, and Waldenbooks.  

Sometimes the profit needle pointed up. In December 1980 Chain Store Age devoted a full issue to Kmart’s past, present and future. The American Society of Magazine Editors in association with the Columbia University Graduate School of Journalism cited our December report as one of the five best single topic issues of the year of any American magazine, trade or consumer. 

Nothing, however, could reverse Kmart’s downward spiral as Target and most prominently Walmart outmuscled it. 

Eventually, Wall Street financier Eddie Lampert bought Kmart and another retail giant turned weakling, Sears. He promised resurrection but really reaped revenues only by selling off real estate locations. 

I retired 15 years ago. Sadly, at least from my perspective, many of the retail companies and shopping centers they inhabited that I followed daily no longer exist. Those that are still around open fewer doors. With each passing week more announcements herald closings and layoffs. 

I never regularly patronized Kmart as an active shopper. But its presence was part of my professional life. I walked its stores in most cities I visited. I don’t travel throughout America as I did before retirement. I will miss Kmart in the abstract. 

For a report on how Long Islanders are reacting to the Bridgehampton store closing, click on the link to this New York Times article: https://www.nytimes.com/2024/10/14/business/kmart-closing-long-island.html?smid=url-share