People: '80s leaders likely pacesetters of '90s: movers & shakers of discounting have clear vision of the future - Issues of the '90s

PEOPLE

'80s Leaders Likely

Pacesetters of '90s

Mass merchandising's shining lights--the leaders who guided their chains to dominant positions in their retail segments during the 1980s--are likely to cast long shadows over the coming decade.

However, if history tells us anything, it's that today's shining star can easily be tomorrow's white dwarf.

For example, only one of the five largest discount chains of the early '70s--K mart--is still in operation today. In addition, two of the five largest discount chains of the early '80s--Gemco and Woolco--are no longer in operation.

Yet, when asked to identify the movers and shakers of the '90s, retail industry observers tend to note executives from such companics as Wal-Mart, Circuit City, The Limited, and The Home Depot: all retailers who carved out dominant positions in their respective industry segments during the 1980s.

"The people who are doing the best job of addressing future issues happen to be the same people who are leading the retail segments they are in," said Robert Zimmerman, chairman, retail and distribution industries practice for Coopers & Lybrand, the New York-based accounting and management consulting firm.

All attempts to identify the retail movers and shakers of the '90s begin with Wal-Mart.

"You have to inlude the people out at Wal-Mart," said Jack Seibald, retail analyst at Salomon Brothers, New York.

Septuagenarian Sam Walton was the force behind the Bentonville, Ark.-based retailer's amazing sales and earnings growth in the '80s. As the company enters the '90s, its fortunes will be chiefly guided by David Glass, 54, who succeeded Walton as ceo in 1988.

Along with 56-year-old vice chairman and chief operating officer Don Soderquist, Glass will probably be running the world's largest retail chain in sales volume by the end of the new decade.

Like his predecessor, Glass believes strongly in constant experimentation and innovation. Said one consultant who works with the chain, "These guys know that everyone in the industry considers them above the rest, yet they also know where their warts are and are constantly kicking themselves to jump further ahead."

Glass and soderquist also have a young cadre of talented executives in key management positions. Bill Fields, Nick White, Dave Dible, Joe Hatfield, Bobby Martin, and Colon Washburn are all in their early to mid-40s. Movers and shakers? You better believe it.

Other oft-mentioned stars of mass retailing who are expected to continue to shine brightly throughout the '90s are Charlie Lazarus of Toys "R" Us, Bernie Marcus of The Home Depot, Robert Ulrich of Target, and Richard Sharp of Circuit City.

"Who's going to be the leaders of the '90s?" asked Zimmerman. "The one's who are saying, 'How are we going to succeed in 1995?' and not the ones who say, 'Aren't I smart?' or worry about whether they can financially afford to make the investments they need to be successful."

Lazarus, 66, the visionary behind the success of Toys "R" Us, has not only dominated the toy business, but is poised to be the leading retailer of children's apparel through Toys "R" Us' growing Kids "R" Us chain.

A true innovator and member of DSN's Discounting Hall of Fame, Lazarus is also one of the few American retailers to invade overseas markets, with toy supermarkets in Europe and moe planned in Japan. Two younger vice chairmen, Robert Nakasone and Michael Goldstein, back up Lazarus.

"You have to put some of the people at Dayton Hudson on your list of movers and shakers," added Seibald. "Through its various businesses, particularly Target in discounting, Dayton will be an increasing force in retailing in the '90s.

Robert Ulrich, Target's chairman, has increased the chain's sales through acquisition, but not at the expense of profits. The recognized leader in fashion merchandising in the discount industry, Target also became a coast-to-coast chain under Ulrich's leadership.

Quietly, Ulrich has placed Target at the cutting edge of technology, forging EDI (electronic data interchange) and QR (Quick Response) partnerships with suppliers before other, more publicity-conscious chains. Going forward, the discounter is expected to expand its market share. A new 160,000-square-foot superstore, to open this fall, will further distance Target from the rest of the retail pack.

Richard Sharp, 43, president of Circuit City, and Bernie Marcus, 6u, chairman of The Home Depot, have been the dominant figures in the electronics superstore and home improvement warehouse segments, respectively.

Sharp, hailed by some as a "retail genius," built Circuit City into the largest consumer electronics chain in the country. With stores concentrated in clusters in several major markets, such as Los Angeles and Washington, D.C., the chain still has a long way to go in expansion. By the end of the decade, Sharp's Circuit City could be as dominant in the CE business as Lazarus' Toys "R" Us is in the toy business.

Marcus, a charismatic former pharmacist, is a Sam Walton-type of leader who founded The Home Depot 11 years ago, and in doing so brought Sol Price's warehouse concept to the home improvement industry. Now, the $2 billion-plus warehouse home center is setting its sights on conquering the Northeast. Are traditional home centers located there worried? You better believe it.

Three executives responsible for companies that generate a combined $60 billion in retail sales will have a major impact on retailing in the 1990s. Sears Merchandising Group chairman Michael Bozic, K mart chairman Joseph Antonini and Ames vice chairman Peter Hollis are each on the host seat. How they change their chains to meet the challenges of the '90s will affect every other retailer in the country. If successful, they will put further pressure on mid-size discount stores. If unsuccessful, they will create opportunities for other companies in the market.

For Hollis, 47, digesting the Zayre acquisition is practically a survival issue. Things are not nearly as desperate at K mart. With a plan in place to resuscitate outdated stores, Antonini, 48, could surprise K mart's detractors. In fact, several observers said K mart is already on its way back. With its growing specialty stores and new format of its discount department stores, K mart could not only hold onto its throne as the nation's largest discounter, but may also surpass Sears as the world's largest retailer by the end of the '90s.

Bozic is overseeing some of the biggest changes in the history of Sears. Some analysts feel that Bozic "announced too much and delivered too little" in unveiling Sears' plans to add specialty departments, more brand names and make a risky switch to everyday low pricing. Yet, if over the long term Sears can duplicate the results Montgomery Ward has seen with similar changes, the retailer will be a force for a long time to come.

In fact, Bernard Brennan's success at transforming Ward into a value-driven specialty retailer ranks the Montgomery Ward chairman high on many observers list of movers and shakers in the '90s.

Other influential mass retail executives who are expected to maintain or achieve a high profile in the '90s include:

* Harold Sells, chairman, Woolworth: A growing force in mall retailing through its specialty chains. Little Folks/Kids Mart, the $200 million off-price children's apparel chain, is expanding aggressively; Champs Sports, the 200-store sporting goods specialty store, is set to be a major player in that industry; and, Woolworth Express, a downsized, more productive version of its variety store, is also a growth vehicle;

* Jim Sinegal, president, Costco: This industry pioneer has successfully maintained the core low-cost warehouse club concept, while expanding into new service departments like pharmacy, optical and fresh food;

* Thomas Stemberg, chairman, Staples: He revolutionized the distribution of goods in the office supplies industry with his megastoreS. In the black for the first time last year, Staples is peged by many observers as the future Toys "R" Us or Circuit City of its retail segment.

Few retail observers would go out on a limb to predict a fulture mover and shaker from a young, emerging company. However, Jack Smith, founder and president of The Sports Authority; Frank Denny, chairman of Office Stop: and Ted Morgan, founder and president of MedChoice Warehouse Club, are often cited for their entrepreneurial attributes.

Smith, former coo of Herman's, the largest sporting goods chain, founded Sports Authority three years ago. Now part of K mart, he has set his sights on establishing a national chain of sporting goods megastores.

Denny is a former K mart specialty division executive. He founded Builders Square, which became a billion-dollar-plus warehouse home center chain after acquisition by K mart, and helped launch the discounter's entries into the sporting goods and office supply fields.

Now, as founder of Office Stop, an office supply megastore, Denny's track record indicates he could become a major player in that field very shortly.

Morgan, who founded Office Club, another office supply megastore concept, launched the first MedChoice medical supply warehouse in 1988. He recently acquired MedClub, his only competitor. If his concept of selling medical, dental and home health care products to doctors, dentists and consumers in a low-cost warehouse setting takes off, he will have founded another new branch of the original membership warehouse club concept.

Finally, another possible up and comer for the '90s could be Fulton Stokes, president of Bill's Dollar Stores. If the economy takes a turn for the worst, chains like Bill's are already positioned in depressed markets and are well-versed at getting down and dirty in prices, even though their merchandise might be second rate at times. With mostly short term leases, they are thereby able to make quick, nimble location changes as the market currents shift.

Stokes is an expert at retail guerrilla warfare: inundate the market with stores but be prepared to pull out at a moment's notice.

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