Store Founders Bankrupty
August 2nd, 2007Can you guess what Macy’s, JC Penney’s, Wal-mart, and Victoria’s Secret have in common? Besides having perfume, lingerie, and the perfect gifts for her (birthday, Mother’s Day, Valentine’s Day, I’m sorry I’m just a man and I’ll never do it again, etc,) the founders of all of these stores went bankrupt!
Macy’s
As a teenager, Roland Hussey Macy rebelled from his father’s magazine shop and decided to become a sailor on the Emily Morgan, a whaling ship. After he returned from the seas, with a red star tattoo, Macy opened a ribbon and linen store. The ribbon store failed rather quickly as did three other stores Macy started. In 1855, at the age of 33, Macy was bankrupt.
A mere 3 years later, Macy went to New York and opened a very small dry goods and stationary store on the corner of 14th Street and 6th Avenue. The name of this store was R.H. Macy and Company, Macy’s for short. The red star in the logo of the store is a tribute to Macy’s time spent as a sailor. The store grew and moved to 18th Street and Broadway, which was known as the Ladies’ Mile, an elite shopping district. The store remained in this location for nearly 40 years and was later moved to the present location of 34th Street and Broadway. Macy’s eventually grew to be the world’s largest store.
JC Penney’s
James Cash Penney was the seventh of twelve children whose father was a Baptist minister and a farmer in Missouri. The family was not a rich one and Penney’s father instilled in him both the value of a dollar and a very high set of morals.
After moving to Colorado for health reasons, Penney, using all of his life savings, opened a butcher shop at the age of 22. The chef at the local hotel promised Penney all of the hotel’s business exclusively for a “gift” of one bottle of whiskey per week. Penney, being a man with extremely high morals, refused this arrangement and sealed the fate of his butcher shop. Without the business from the hotel, the shop went bankrupt.
Penney found a job at the Golden Rule dry goods store. The owners of the store believed in honesty and a strong work ethic, hence the name. Not surprisingly, Penney flourished in the environment at the Golden Rule and was eventually able to buy out the owners. The name of the store changed to J.C. Penney Company and was one of the first to offer profit-sharing to its employees.
JC Penney’s has been in business for over 100 years and is still one of America’s largest retailers.
Wal-mart
With over 3900 stores and employing over 1.8 million people, you would be hard pressed to find someone in America who has not, at the very least, heard of Wal-mart. Its founder, Sam Walton, had a certain knack for the business.
Walton was born in 1918 and seemed to excel at everything. He was a distinguished Boy Scout, an exceptional athlete and honors student in high school and shined in college. When he came back from WWII in 1945, Walton purchased his first store, a franchise Ben Franklin variety store.
This store is where Walton’s concepts of buying wholesale goods from the lowest priced supplier proved their worth. The lower prices drove up sales, which made for larger amounts of supplies to order and gave Walton more room to negotiate lower prices. The store was a success in every aspect.
The problem came when the landlord decided to not renew Walton’s lease when it expired. The landlord was then able to take over the wildly successful store and pass it on to his own son.
Walton had to completely start over in another state, where his same practices of giving people low prices made his stores a success. He continued to open and succeed with his small stores.
The first true Wal-mart open in 1962 and the company has continued to grow to this day.
Victoria’s Secret
This wildly popular lingerie store was founded in 1977 by Roy Raymond, a Stanford Business Graduate. Raymond came up with the idea of the store after an ordeal of buying lingerie for his wife at a department store. He was a shy man who was deeply embarrassed by the glances given to him by shoppers and clerks of the very public lingerie departments in large stores. His idea was to create a shop where everyone, men and women, would feel comfortable shopping. He created a shop in San Francisco decorated as a Victorian boudoir with Oriental rugs and vanities whose drawers contained lingerie with salespeople to help estimate sizes and appropriate outfits.
The store was such a success that Raymond expanded to four more locations. Unfortunately, Raymond was not as good with the financial aspect of the business as he was with the store concept. He was forced to accept an offer by The Limited to buy the stores in 1982.
Raymond made a good deal of money from the sale of Victoria’s Secret but invested it poorly into another store which sold expensive toys. This store collapsed and Raymond filed for bankruptcy in 1986. After trying other business ventures, Raymond, once again, found himself facing bankruptcy. He drove to the middle of the Golden Gate Bridge and jumped to his death in September 1993 at the age of 47.