The Winter of 1987 was a cold and snowy one in New England. The first snow storm was in November and it seemed that we would not see our front yard again until June! In late March, I had a meeting with the CEO of Child World where I was given my performance review and a maximum bonus for 1986's performance. At this meeting, I again assured my boss that I was there to stay and had spent the last couple of months working furiously to demonstrate my dedication and loyalty to the Company. The meeting ended after 5:00 and when I returned to my office, my secretary had left for the weekend but had left me a note in the center of my desk. "Call Scott Meadow...IMPORTANT! He has called you 3 times!" I had not talked to Scott since I told him that I was out of the deal in early February and had assumed that the Sporting Goods project (if it was still alive) had proceeded in another direction.
So, I returned Scott's call. No small talk...Scott got right to the point: "We want you to come down to Newark tomorrow morning to meet the guy that is going to be the CEO of the Sporting Goods project." "No thanks," I replied...."I told you that I am out of the deal." It was like he didn't even hear me..." The flight is at 9 AM and Adam Kirsch from Bain Capital will meet you at the airport and fly with you. The meeting is at the Holiday Inn at the Newark airport. You will be back in time for dinner." Hmmmm. After much cajoling, I finally agreed to spend my Saturday in Newark. What could it hurt? It will give me the opportunity to tell them face to face that I was no longer in the deal!
On the flight to Newark, Adam told me how excited they were to be a part of the deal and how he was looking forward to working with me.....all good, if I was actually going to be in the deal! I walked into the conference room in Newark in time to hear Jack Smith pontificate about the value of promotional retailing versus Everyday Low Price Retailing. As he stood in front of the room in his satin Starter 76er's jacket, his silver hair and dark tan signaling a guy that had spent a lot of time on the golf course, he motioned to me and said "Well, this guy is suppose to be a merchant...look at these 2 Ads and tell me which one is best." I looked at the Herman's Ad and then glanced at an Ad for All American Sports Warehouse in California and I gave my honest opinion. "They both suck!" And THAT was my formal introduction to Jack Smith, the future President and CEO of The Sports Authority.
What I later learned was that the VC's had actually approached another executive at Herman's Sporting Goods and was turned down. This executive thought the idea was so outlandish that he told the COO of Herman's about the overture and joked about how foolish the deal was. Jack absorbed the information and called Scott Meadow to admonish him for approaching one of his executives and ultimately threw his own hat in the ring!
The meeting continued in a contentious tone throughout the day. We argued about the pricing policies, the marketing message, the size of the assortments, the layout of the store and any and every other detail of the proposed store. Jack was the COO of Herman's Sporting Goods and he had the Sporting Goods Industry background...but I knew Big Box retail and the challenges and opportunities incumbent in a 40,000 square foot retail store. Jack's background was Operations and Real Estate...mine covered the Merchandising and Marketing side of the business. At one point in the meeting, it became so heated that I left the meeting room and approached Jory Katlin. "Do you really think this is the guy to lead this thing?" I queried. "Why not give me a chance to be the CEO?" "Because this is the guy that can get in financed." Jory retorted. I was unusually quiet for the rest of the meeting. Game, set, match!
Returning home that evening, I was still not convinced that I wanted to be a part of the deal and was not even sure if Jack wanted me to be part of the deal. But he called on Sunday night with an offer....a really bad offer that would require me to take a deep cut in salary but included equity participation in the venture. I turned him down on the spot. No way was I going to take THAT deep of a cut. We went back and forth for a week, with Scott Meadow pulling the strings.
Finally, we came to an agreement...but now I had other BIG problems! How do I tell my boss that I was going to renege on my commitment that I was staying at Child World? How do we break the news to the kids that we were, once again, moving? Am I totally out of my mind leaving a secure position for one so tenuous? After receiving some not so glowing references from former co-workers of Jack's, could I actually have a successful working relationship with him?
These answers and more to come in Part 4.
And The Journey continues............
Monday, February 28, 2011
Thursday, February 24, 2011
The Real Story, Part 2
As I got ready to go to Chicago for the New Year's Eve meeting, I assured my wife that the meeting would settle whether we actually have a deal to start the Company or whether we were going to move! After all, our daughter's Bat Mitzvah was scheduled for Spring and we had to decide the location...Boston, South Florida or Atlanta! And, of course, there was the matter of my position at Child World. Although the CEO was being quite accomodating, he was not going to wait forever for an answer as to whether I was staying or leaving. The schedule was a whirlwind...early flight to Chicago, meeting and fly back the same day as we had New Year's Eve plans with friends in Boston.
The meeting started out much like we had choreographed. Present were the principals of the targeted Venture Capital firms, Jory from Maurice Sporting Goods, his attorney and the proposed Executive team. I presented the overview of merchandising and marketing; the pricing strategy, advertising strategy, merchandise categories, store layout, gross margin strategy and merchandising and marketing staffing. The VP of Operations gave an overview of the store construction, and the CFO presented an overview of the initial financial projections. Then disaster struck...the proposed CEO, Bob Mead began to talk and he literally fumbled the ball. It became quite apparent that he had no real vision and was not the right person to lead the operation....actually, it was somewhat of an embarrassment to the entire effort. Venture Capital firms make investment decisions based as much on the leadership team as on the concept itself. It was obvious that this operation would never get funded with Bob as the CEO!
So, I flew back to Boston and assured my wife that we were staying put...that this deal was never going to happen. However, I soon received a call from the lead investor, Scott Meadow, who asked me to sit tight...the plan was to look for another CEO and then finalize the financing. I then proceeded to avoid my boss at Child World for the next few days...until he button-holed me on a flight from LA to Vegas, where we were attending a trade show. In his show of faith, he awarded me a 25% increase in salary, and a guarantee of my 50% bonus if I would drop the Sporting Goods project and commit all of my efforts to Child World. The provision was that I had to give him an answer by the end of January...when I returned from a Buying Trip to Hong Kong. I was on top of the world - Child World wanted me to stay and high powered Venture Capital firms wanted me to help start this new business. I immediately called Scott and told him that if the deal was not finalized by February 1st, then I was out of the deal...and off to Hong Kong I went!
Upon my return, it became apparent that nothing further had been done to secure the financing for the Sporting Goods project. I informed Scott that I was out of the deal and had to devote all of my focus on my current job. I accepted the generous offer of the CEO of Child World to stay in my present position and my wife proceeded to plan our daughter's Bat Mitzvah in Sharon, Massachusetts. As far as I was concerned, the Sporting Goods project would never get off the ground and I was much better off concentrating on the job at hand.
In the next post...the project is resurrected, meeting Jack and making the decision.
And The Journey continues.......
The meeting started out much like we had choreographed. Present were the principals of the targeted Venture Capital firms, Jory from Maurice Sporting Goods, his attorney and the proposed Executive team. I presented the overview of merchandising and marketing; the pricing strategy, advertising strategy, merchandise categories, store layout, gross margin strategy and merchandising and marketing staffing. The VP of Operations gave an overview of the store construction, and the CFO presented an overview of the initial financial projections. Then disaster struck...the proposed CEO, Bob Mead began to talk and he literally fumbled the ball. It became quite apparent that he had no real vision and was not the right person to lead the operation....actually, it was somewhat of an embarrassment to the entire effort. Venture Capital firms make investment decisions based as much on the leadership team as on the concept itself. It was obvious that this operation would never get funded with Bob as the CEO!
So, I flew back to Boston and assured my wife that we were staying put...that this deal was never going to happen. However, I soon received a call from the lead investor, Scott Meadow, who asked me to sit tight...the plan was to look for another CEO and then finalize the financing. I then proceeded to avoid my boss at Child World for the next few days...until he button-holed me on a flight from LA to Vegas, where we were attending a trade show. In his show of faith, he awarded me a 25% increase in salary, and a guarantee of my 50% bonus if I would drop the Sporting Goods project and commit all of my efforts to Child World. The provision was that I had to give him an answer by the end of January...when I returned from a Buying Trip to Hong Kong. I was on top of the world - Child World wanted me to stay and high powered Venture Capital firms wanted me to help start this new business. I immediately called Scott and told him that if the deal was not finalized by February 1st, then I was out of the deal...and off to Hong Kong I went!
Upon my return, it became apparent that nothing further had been done to secure the financing for the Sporting Goods project. I informed Scott that I was out of the deal and had to devote all of my focus on my current job. I accepted the generous offer of the CEO of Child World to stay in my present position and my wife proceeded to plan our daughter's Bat Mitzvah in Sharon, Massachusetts. As far as I was concerned, the Sporting Goods project would never get off the ground and I was much better off concentrating on the job at hand.
In the next post...the project is resurrected, meeting Jack and making the decision.
And The Journey continues.......
Wednesday, February 23, 2011
The Real Story, Part 1
When I started this blog, I said that it didn't really matter if anybody read it. That is still true...I am writing as an outlet and if one day my grandchildren want to know more about their Saba, then they will have the opportunity to read the collective writings.
When we sold The Sports Authority to Kmart in 1990, I said that one day I would write a book about the "real story." In fact, at the closing dinner, one of our partners signed a memento of the event to me with "to Roy, who knows the real story." So, this is the first installment of The Real Story....for no other reason than sometimes the real story is a lot more interesting than the myth that has been perpetuated for 25 years!
The year is 1985...As a young (34 years old) executive with Child World Stores, I had just been promoted to Vice President and General Merchandise Manager when I got a call from a Headhunter. It seems that there was a group of grocery executives that were putting together a team to start-up a new retail chain, backed by several prominent venture capital funds. Since they wanted me to interview for the Chief Merchant position, I was curious to get more details. "They endeavor to start a chain of Office Supply superstores...a virtual grocery store of office supplies!" Being the self-proclaimed retail expert that I envisioned of myself, I declined to even be interviewed because I couldn't imagine how a superstore could possibly do enough business in paper clips, legal pads and pens and pencils to be successful. Not one of my more brilliant assessments as the chain turned out to be Staples...one of the most successful superstore chain start-ups of the 80's.
Fast forward a year or so and in a conversation with an old friend and former supplier from my days at Richway Stores, I learned of "a group of retailers and VC's" that were putting together plans for a Sporting Goods Superstore concept and their search for a chief merchant. No sooner did Jory get the words out of his mouth that I jumped all over the opportunity to interview. (I try to never make the same mistake twice!). Jory put me in touch with Bob Mead and Chet Howard, the 2 executives working full time on Warehouse of Sports in South Florida. Since I had already scheduled vacation with the family at Disney World, a quick 1 day trip to West Palm Beach would be easy.
The trip to meet Bob and Chet confirmed my suspicions...that Jory, his Dad and Uncles were the impetus behind the idea and had assembled the Venture Capital groups and seed money to get the project rolling. But their involvement had to be kept quiet because their family business, Maurice Sporting Goods, was the supplier of Fishing and Hunting gear for the biggest chains in Retail...they couldn't be seen as competitors to their customers. I loved the concept but had reservations about the leadership...Bob seemed to be way behind the times, a retail relic, and I doubted his leadership ability. BUT, I loved the opportunity. Always a risk taker, I forged ahead.......
Next, were meetings with the perspective Venture Capital partners...Scott Meadow of William Blair, Bill Hunkler of First Chicago, Don Phillips and Cece Smith of Phillips-Smith, Chip Ruth of Marquette and Mitt Romney (yes, THAT Mitt Romney) of Bain Capital. I hit it off with several of them...especially those with a retail background and I got locked in as the newest member of the Executive Team.
As the project progressed, I had the opportunity to add input to the Business Plan and overall Merchandising, Marketing and Operations strategy. My experience in Big Box Retail served the team well. And then, I got blindsided!!!
It seems that in checking me out, Scott Meadow of William Blair sought input from the analyst that covered the Toy Industry for Blair....sensing an opportunity to get sales info from Child World during the Christmas Season (normally an info blackout period), this analyst traded the info that I was working with this Sporting Goods group with the CEO of Child World for sales information! So, I was confronted by my boss and decided to come clean...yes, I was entertaining the opportunity but that the New Company was not yet a reality and might not even happen. I also confided that there was a New Year's Eve meeting in Chicago that will help decide if the project would even get off the ground. In this case, honesty worked...my boss gave me the room to "figure it out" but let me know that he didn't want me to leave.
In my next post...the New Year's Eve Meeting, I drop out of the project, the deal falls apart and gets resurrected!
And The Journey continues...................................
When we sold The Sports Authority to Kmart in 1990, I said that one day I would write a book about the "real story." In fact, at the closing dinner, one of our partners signed a memento of the event to me with "to Roy, who knows the real story." So, this is the first installment of The Real Story....for no other reason than sometimes the real story is a lot more interesting than the myth that has been perpetuated for 25 years!
The year is 1985...As a young (34 years old) executive with Child World Stores, I had just been promoted to Vice President and General Merchandise Manager when I got a call from a Headhunter. It seems that there was a group of grocery executives that were putting together a team to start-up a new retail chain, backed by several prominent venture capital funds. Since they wanted me to interview for the Chief Merchant position, I was curious to get more details. "They endeavor to start a chain of Office Supply superstores...a virtual grocery store of office supplies!" Being the self-proclaimed retail expert that I envisioned of myself, I declined to even be interviewed because I couldn't imagine how a superstore could possibly do enough business in paper clips, legal pads and pens and pencils to be successful. Not one of my more brilliant assessments as the chain turned out to be Staples...one of the most successful superstore chain start-ups of the 80's.
Fast forward a year or so and in a conversation with an old friend and former supplier from my days at Richway Stores, I learned of "a group of retailers and VC's" that were putting together plans for a Sporting Goods Superstore concept and their search for a chief merchant. No sooner did Jory get the words out of his mouth that I jumped all over the opportunity to interview. (I try to never make the same mistake twice!). Jory put me in touch with Bob Mead and Chet Howard, the 2 executives working full time on Warehouse of Sports in South Florida. Since I had already scheduled vacation with the family at Disney World, a quick 1 day trip to West Palm Beach would be easy.
The trip to meet Bob and Chet confirmed my suspicions...that Jory, his Dad and Uncles were the impetus behind the idea and had assembled the Venture Capital groups and seed money to get the project rolling. But their involvement had to be kept quiet because their family business, Maurice Sporting Goods, was the supplier of Fishing and Hunting gear for the biggest chains in Retail...they couldn't be seen as competitors to their customers. I loved the concept but had reservations about the leadership...Bob seemed to be way behind the times, a retail relic, and I doubted his leadership ability. BUT, I loved the opportunity. Always a risk taker, I forged ahead.......
Next, were meetings with the perspective Venture Capital partners...Scott Meadow of William Blair, Bill Hunkler of First Chicago, Don Phillips and Cece Smith of Phillips-Smith, Chip Ruth of Marquette and Mitt Romney (yes, THAT Mitt Romney) of Bain Capital. I hit it off with several of them...especially those with a retail background and I got locked in as the newest member of the Executive Team.
As the project progressed, I had the opportunity to add input to the Business Plan and overall Merchandising, Marketing and Operations strategy. My experience in Big Box Retail served the team well. And then, I got blindsided!!!
It seems that in checking me out, Scott Meadow of William Blair sought input from the analyst that covered the Toy Industry for Blair....sensing an opportunity to get sales info from Child World during the Christmas Season (normally an info blackout period), this analyst traded the info that I was working with this Sporting Goods group with the CEO of Child World for sales information! So, I was confronted by my boss and decided to come clean...yes, I was entertaining the opportunity but that the New Company was not yet a reality and might not even happen. I also confided that there was a New Year's Eve meeting in Chicago that will help decide if the project would even get off the ground. In this case, honesty worked...my boss gave me the room to "figure it out" but let me know that he didn't want me to leave.
In my next post...the New Year's Eve Meeting, I drop out of the project, the deal falls apart and gets resurrected!
And The Journey continues...................................
Thursday, February 10, 2011
Clear Eyes, Full Heart
Last night, on DirecTV, the final episode of Friday Night Lights was aired. For those that have to wait until Spring for the series to play out on NBC, don't worry...I am not going to reveal any storylines or spoil your enjoyment of this final season.
FNL has been on for 5 years and is, by far, my favorite drama over that time. It was NOT a series about football. It was a Trojan horse, using a football vehicle to showcase small town Texas (America) and its treatment of race, class, religion and family. Yes, some of the plot lines were not realistic but the emotions the stories elicited were realistic. The Finale wrapped up almost all of the plot lines, but the most important message was "you are family."
The pre-show montage showing clips of all of the various characters over the years featured a voice over by Coach Taylor who was presumably addressing his team before the big game:
" Give all of us gathered here tonight the strength to remember that life is so very fragile. We are all vulnerable and we will all at some point in our lives fall. We will all fall. We must carry this in our hearts....that what we have is special. That it can be taken from us and then when it is taken from us, we will be tested. We will now all be tested. It is these times, it is this pain that allows us to look inside ourselves."
Clear Eyes, Full Heart....Can't Lose!
And The Journey continues......................
FNL has been on for 5 years and is, by far, my favorite drama over that time. It was NOT a series about football. It was a Trojan horse, using a football vehicle to showcase small town Texas (America) and its treatment of race, class, religion and family. Yes, some of the plot lines were not realistic but the emotions the stories elicited were realistic. The Finale wrapped up almost all of the plot lines, but the most important message was "you are family."
The pre-show montage showing clips of all of the various characters over the years featured a voice over by Coach Taylor who was presumably addressing his team before the big game:
" Give all of us gathered here tonight the strength to remember that life is so very fragile. We are all vulnerable and we will all at some point in our lives fall. We will all fall. We must carry this in our hearts....that what we have is special. That it can be taken from us and then when it is taken from us, we will be tested. We will now all be tested. It is these times, it is this pain that allows us to look inside ourselves."
Clear Eyes, Full Heart....Can't Lose!
And The Journey continues......................
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