The first order of business was to hire a staff. We immediately had a need for a secretary/ Office manager and I hired Julie on the first or second day. Having never been involved in a start-up venture before, I was unaware of just how much of a start-up we were until I gave her the first task. The night before, I had written out three letters to be sent to potential suppliers...one to those people that Jack knew, one to those that I knew and a general industry-wide letter. I then marked up a Sporting goods directory with who were to get each letter and turned it over to Julie to execute. A few minutes later, she came back to my desk and asked, "um, what do I use to type these up on?" Uh, oh...we didn't even have a typewriter (this was before PC's took over). So, I sent her to Office Depot to buy a memory typewriter and thought that would resolve the problem. She arrived back with the typewriter and came back to my desk..."Where can I find the stationery?" Hmmm....we needed to sit down and make a list of all of the supplies that we needed to get rolling...Stationery, envelopes, general office supplies, business cards, copy machine, etc, etc, etc....yep we were REALLY starting from scratch! So, after putting Julie in charge of all of those details, I set out to hire a buying and marketing staff.
At the suggestion of Ann at Doner Advertising, I called Ellen (Brautigan) Stevens in Atlanta to come interview for the marketing manager position. I had worked with Ellen some years earlier in Atlanta and she had all of the knowledge and tools to set up the advertising function - especially the business side of the retail ad biz. It didn't hurt to know that she pined to move to Florida too!! So, with Ellen hired I continued the search for 3 or 4 Buyers. Realizing that we were creating a new kind of Sporting Goods environment, I wanted to hire Buyers from several retailing disciplines so that we could create our own culture - to hire from just the sporting goods arena would get us a culture of same ol', same ol'. So, I hired a diverse group...Jay from a Mass Merchant with Sporting Goods experience for hardlines, Joe from a small Sporting Goods Retailer for footwear, Kim from Burdine's Department Stores for Apparel and finally Dave for Fishing, Hunting, and Camping. We then added Debbie as an Assistant Buyer to handle the women's apparel. It must have been a pretty good crew, because nearly all of them (with the exception of Debbie who left to raise a family and Dave who left for family reasons) stayed, flourished and were promoted to even bigger roles over the years.
July 4th rolled around and with the initial staff in place, the computer system getting installed, the construction of the store commencing, we had only a short time to purchase the merchandise, develop the buying system, receive and price the goods and get the store open. By this time, it was becoming apparent that Dick Carter was going to be a short termer....once he got the store constructed, it was apparent that Jack was going to bring in one of his old cronies from Herman's to be VP of Store Operations. Dick's vision of the store was more of a warehouse view and we had spent considerable time and effort to convince the Industry that we were NOT a warehouse...but a large Mega Store with carpet under the apparel and a stack 'em high, let 'em fly merchandising philosophy for hardlines. Our trademark open blue ceiling came about because we found that it was going to cost an extra $20,000 to paint the existing ceiling white....and all of the first 30 or more stores ended up with that blue ceiling! Our low price image was going to be reinforced by "not to be beat prices" on commodities such as tennis balls, and golf balls and well positioned opportunity buys like the $10 all leather tennis shoes and the $9.99 wall of sweat clothes featured during the Grand Opening.
Jack and I continued to battle on many issues. As a matter of fact, after we sold the Company to Kmart in 1990 we held a dinner to celebrate the sale. At that dinner, Mitt Romney gave a terrific speech about the founding of the Company and addressed each of the principals. When he came to me, Mitt said, "The Board could never understand how Roy accomplished all that he did. ..Roy would propose merchandising initiatives and Jack would reject them..Roy would propose Advertising initiatives, and Jack would reject them...and then we realized how he pushed all of the initiatives through..." and then he presented me with a pair of heavy duty knee pads! (I still have those knee pads hanging on a wall in my office!). I like to believe that the tensions only helped the creative process and got us the best solutions!
Nonetheless, we DID accomplish a hell of a lot in a short amount of time. The multi-faceted advertising campaign utilizing billboards, television and radio reinforced our commitment to "Sell the sizzle...not the steak!" That is, we sold the concept of the store as the ultimate Sporting Goods destination rather than just advertising items at rock bottom prices. The television advertising featuring comic Louie Anderson as the very antithesis of an athlete was a resounding success. (An interesting tidbit is that the scripts were written with John Candy as the star...when he proved to be wildly too expensive, we decided to use little know Louie Anderson who was to become well know shortly thereafter!) The radio ads were breakthrough advertising and the billboards with a double entendre twist were a big hit. After working 7 days a week including many 15 to 18 hour days, we finally managed to get the first store open. Grand Opening week featured many star athletes including Sugar Ray Leonard, Dan Marino, Dwight Gooden, Tim Raines, and Reggie Jackson among others. The lines of people wrapped around the store and spilled outside onto the sidewalk.
When we started this venture, we projected the first store to do an annualized volume of around $8.7 million. People in the Industry thought we had lost our minds...the average Sporting Goods Retailer did around $1.7 million in volume...no way were we going to open a store doing over 5 times that! In the first year of operation, the flagship The Sports Authority Store did $10.5 million in volume...we were a success at the store level. Now we had to get a bunch of stores open to leverage the corporate costs we had put in place to grow the Company!
That's how it all started! We continued to grow, sold the Company in March, 1990, to Kmart Corporation (that is a whole other story), and really started a growth spurt. I along with the other 3 executives signed 2 year contracts with KMart....50% of our buyout was put into escrow until the end of 2 years. I actually stayed on for 3 years after the buyout and departed in April of 1993 to found KidSource...a baby megastore concept.
Those 7 years ( I count from the time we first started working on the Sports Newco project in 1986!) were some of the most exciting of my business career. I am indebted to Jory for that first phone call, to Scott for his encouragement and counsel and to Jack for the experience..but I am most indebted to all of those that worked with us to make it happen.
And The Journey continues........
Saturday, March 19, 2011
Wednesday, March 9, 2011
The Real Story, Part 4
What a position I had put myself in! I had agreed to join "Sports Newco" but had just told my boss that I was committed to my present job. Now I had to tell him that I was, in fact, leaving...after spending considerable time and effort convincing him of my loyalty. The apprehension was worse than the reality, though. My boss was disappointed but understanding and, much to my astonishment, supportive. Having recently uprooted his family to take the position of CEO at Child World, he understood the dynamic of having to "go for the brass ring." Gil's only request was that I stay for 3 to 4 weeks to help through the annual budgeting process and bow out of the management incentive trip to Key West. Done and done!
Meanwhile, there was work to be done for Sports Newco. First and foremost was the task of coming up with a name for the Company. There were many names floated...."Jack's" (it is obvious who that one came from), "Balls" "SportCity" and "AllSport" were all being considered. It was obvious to me that we needed help in naming the Company, so I contacted an Advertising Agency that specialized in Retail...W.B.Doner...out of Detroti, MI. I had positive experiences working with Doner at two other Companies. It didn't hurt any that one of my mentors from early in my career was Senior Vice President in charge of the Florida office! Ann Bergstrom had been VP of Advertising at Richway Stores and had taught me the ins and outs of retail advertising. So, I put them on the task of naming the Company.
A meeting was scheduled at Doner's offices. As Jack and I were still working out our notices, we flew in from multiple locations. Present at the meeting were me and Jack as well as representatives from the Investment group....Jory from Maurice Sporting Goods, Scott from Blair, Adam Kirsch from Bain Capital and Chip Ruth from Marquette. The night before the meeting, Ann and I talked and she informed me that they had not come up with a better name than "AllSport" and were going to make a presentation to us utilizing that name. However, Ann greeted our long white limo as it pulled up to the front of Doner's headquarters, hugged me and whispered in my ear "Forget our conversation of last night...surprise name coming!" Later, I was berated by Jack for daring to hug Ann...I was never sure if he really thought this was such an "unprofessional" act or if he was bothered by the impression that my relationship with the agency would preclude him from some measure of control.
As we entered the conference room, I noticed presentation books laid out at each seat...the title was "AllSport." Once the meeting started, it was explained that the creative group had worked on the name for some time but had not come up with a name other than the one that I had originally suggested..."AllSport." However, on a trip to New York the previous day, one of the members of the creative team had seen a sign at the airport...."New York Port Authority" and the name "The Sports Authority" immediately came to mind. No sooner did the words get out of the presenter's mouth that Jack slapped the table and declared, "Absolutely NOT...over my dead body will we have a name with that many letters." I, along with the others present, were stunned. The name said it all...it was a strong statement of what the store actually stood for. As we polled the room, all except Jack liked the name....he accused me of liking it only because "you hired these guys." He discounted any other opinions because "you are not retailers...you don't understand the cost of making the signs for the store with that many letters!" The discussion went on for several hours....Jack began to wear down and he had come to a realization that the rest of the room was not going to back down. So, he asked for a compromise...let's name the Company "AllSport" and have as it's tagline..."The Sports Authority." More discussion led to a tentative name of "The Sports Authority." It only became permanent after Jack tried it out on some other associates and friends of his and they all endorsed the name!
Jack and I met several times over the next few weeks...mainly as a two man team visiting key suppliers to tell them of our plans and to garner support for what, at the time, was such a radical departure from traditional Sporting Goods Retailing. We had developed a presentation whereby we laid out our plans...Huge Assortments, Everyday "Fair" Pricing, and Superior Customer Service in a MegaStore environment. Frankly, the idea of a large Sporting Goods store frightened many of the suppliers. We had to assure them that we would never lead the market down in price and would treat their merchandise with the respect that it (they believed) such richly deserved. In reality, they were scared that their present customers... Herman's, Oshman's and Foot Locker... would not be please that they had added The Sports Authority to the roster! We garnered assurances from Reebok, Adidas, New Balance, Wilson and many others during our road trip. But we made a terrible mistake....we didn't travel to Nike in Oregon....Nike had just begun to grow and it seemed on the surface that they would not be a problem. Oh, but we were wrong!!!
We had my daughter's Bat Mitzvah in Massachusetts the first week of June, 1987. Having sold the house, Connie and I bought a new one in Boca Raton over Memorial Day weekend and I set out for Florida the week after the Bat Mitzvah....the family was left behind to pack up and join me the first week in July. Arriving the first day at our temporary office ...an old Radio Shack storefront in the nearly defunct Lauderdale Lakes Mall...I found a skeleton crew consisting of the CFO, Chet Howard; the VP of Store construction, Dick Carter; and Kelly Conway, the IT manager. Jack would show up later in the week.
Having signed an employment agreement, I was required to purchase my founder's stock and promptly wrote a check for $21,428....which for me at the time, was a huge amount of money. I later found out that Jack was not required to invest any of his own money in the deal....his ownership participation was handled as a "loan" from the Company. My naivete and general lack of experience in these sort of deals caused me to invest my capital and yet receive significantly less stock than others that invested zero of their own capital! Live and learn!
Coming in part 5.....hiring the staff, laying out the store, buying the merchandise, and getting the store open!
And The Journey continues............................
Meanwhile, there was work to be done for Sports Newco. First and foremost was the task of coming up with a name for the Company. There were many names floated...."Jack's" (it is obvious who that one came from), "Balls" "SportCity" and "AllSport" were all being considered. It was obvious to me that we needed help in naming the Company, so I contacted an Advertising Agency that specialized in Retail...W.B.Doner...out of Detroti, MI. I had positive experiences working with Doner at two other Companies. It didn't hurt any that one of my mentors from early in my career was Senior Vice President in charge of the Florida office! Ann Bergstrom had been VP of Advertising at Richway Stores and had taught me the ins and outs of retail advertising. So, I put them on the task of naming the Company.
A meeting was scheduled at Doner's offices. As Jack and I were still working out our notices, we flew in from multiple locations. Present at the meeting were me and Jack as well as representatives from the Investment group....Jory from Maurice Sporting Goods, Scott from Blair, Adam Kirsch from Bain Capital and Chip Ruth from Marquette. The night before the meeting, Ann and I talked and she informed me that they had not come up with a better name than "AllSport" and were going to make a presentation to us utilizing that name. However, Ann greeted our long white limo as it pulled up to the front of Doner's headquarters, hugged me and whispered in my ear "Forget our conversation of last night...surprise name coming!" Later, I was berated by Jack for daring to hug Ann...I was never sure if he really thought this was such an "unprofessional" act or if he was bothered by the impression that my relationship with the agency would preclude him from some measure of control.
As we entered the conference room, I noticed presentation books laid out at each seat...the title was "AllSport." Once the meeting started, it was explained that the creative group had worked on the name for some time but had not come up with a name other than the one that I had originally suggested..."AllSport." However, on a trip to New York the previous day, one of the members of the creative team had seen a sign at the airport...."New York Port Authority" and the name "The Sports Authority" immediately came to mind. No sooner did the words get out of the presenter's mouth that Jack slapped the table and declared, "Absolutely NOT...over my dead body will we have a name with that many letters." I, along with the others present, were stunned. The name said it all...it was a strong statement of what the store actually stood for. As we polled the room, all except Jack liked the name....he accused me of liking it only because "you hired these guys." He discounted any other opinions because "you are not retailers...you don't understand the cost of making the signs for the store with that many letters!" The discussion went on for several hours....Jack began to wear down and he had come to a realization that the rest of the room was not going to back down. So, he asked for a compromise...let's name the Company "AllSport" and have as it's tagline..."The Sports Authority." More discussion led to a tentative name of "The Sports Authority." It only became permanent after Jack tried it out on some other associates and friends of his and they all endorsed the name!
Jack and I met several times over the next few weeks...mainly as a two man team visiting key suppliers to tell them of our plans and to garner support for what, at the time, was such a radical departure from traditional Sporting Goods Retailing. We had developed a presentation whereby we laid out our plans...Huge Assortments, Everyday "Fair" Pricing, and Superior Customer Service in a MegaStore environment. Frankly, the idea of a large Sporting Goods store frightened many of the suppliers. We had to assure them that we would never lead the market down in price and would treat their merchandise with the respect that it (they believed) such richly deserved. In reality, they were scared that their present customers... Herman's, Oshman's and Foot Locker... would not be please that they had added The Sports Authority to the roster! We garnered assurances from Reebok, Adidas, New Balance, Wilson and many others during our road trip. But we made a terrible mistake....we didn't travel to Nike in Oregon....Nike had just begun to grow and it seemed on the surface that they would not be a problem. Oh, but we were wrong!!!
We had my daughter's Bat Mitzvah in Massachusetts the first week of June, 1987. Having sold the house, Connie and I bought a new one in Boca Raton over Memorial Day weekend and I set out for Florida the week after the Bat Mitzvah....the family was left behind to pack up and join me the first week in July. Arriving the first day at our temporary office ...an old Radio Shack storefront in the nearly defunct Lauderdale Lakes Mall...I found a skeleton crew consisting of the CFO, Chet Howard; the VP of Store construction, Dick Carter; and Kelly Conway, the IT manager. Jack would show up later in the week.
Having signed an employment agreement, I was required to purchase my founder's stock and promptly wrote a check for $21,428....which for me at the time, was a huge amount of money. I later found out that Jack was not required to invest any of his own money in the deal....his ownership participation was handled as a "loan" from the Company. My naivete and general lack of experience in these sort of deals caused me to invest my capital and yet receive significantly less stock than others that invested zero of their own capital! Live and learn!
Coming in part 5.....hiring the staff, laying out the store, buying the merchandise, and getting the store open!
And The Journey continues............................
Monday, February 28, 2011
The Real Story, Part 3
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............
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............
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......................
Friday, January 28, 2011
My Grandson, Elie Lev Cohen
I thought that this blog posting would be the easiest one to write because of the joy and love I feel for our first grandchild, Elie Lev Cohen. But I was wrong. Sometimes one is so filled with emotions that mere words cannot describe the intense feelings of love, pride, and joy. I never thought it was possible to equal the feelings I had when our children were born, but the news of Elie's arrival and the first time I held him were two of the most powerful moments of my life.Elie was born on January 17, 2011. Numerically, that is a pretty cool date...11711...eleven -seven-eleven. Seven or Eleven is the desirable roll of the dice, on the coming out roll, when you are playing the pass line in craps (as I always do!). He weighed in at one-half ounce shy of 8 pounds and a healthy 20 inches. And, did I mention that he is absolutely gorgeous? He is definitely his Father's son as baby pictures of Brad could be mistaken for Elie!
We've just returned from a wonderful week visiting in Baltimore and I can't wait until we go back! It was very special celebrating his first Shabbat. And it was truly a blessing to have four generations of Cohen's there to celebrate!
The Bris and welcoming of Elie into the community was outstanding and was highlighted by Brad and Claire's wishes for their son. With their permission, I am posting it below:
Our Dearest Elie:
Chickey Monkey, Chickey dough, Cookie Monkey, Little Bubba, Elie-belly, Elie-bean, Smelly Elie, Levvie......these are only some of the endearing names you'll be called. But today, we wanted to take a moment to explain to you the significance of your given name, Elie Lev Cohen.
Although to us you will always be Chickey Monkey, your first name is Elie. There have been some important Elie's in the world including, Elie Wiesel, Elijah the prophet, and Elie Zarem, your Aunt Lisa's first boyfriend. The name Elie literally means "high", "ascended" or "my god". Our hope for you is that you always strive for big dreams and have the confidence to be your best and highest Elie. We hope that you have the strength, heart and ability to impact the world in your own creative and unique way.
Your middle name and Hebrew name is Lev. Lev is short for your Emmie's family name, Levitch. Your great grandmother, Ruth, who would have loved to be here today and have you call her Bubbe, carried the Levitch name with Yiddishkeit & joy. She loved to laugh .. may you smile with her lips. Lev in Hebrew means heart. May you have the love in your heart of Bubbe Ruth. May you have the strength, determination and wit of your great grandmother, Nana. May you appreciate music as did your great grandma Sylvia. May you give of yourself, as did your great, great grandmother, Mimi, who at the age of 90 volunteered at an old-aged home. May you cherish and value family with warmth and care, just like your Poppi & Sharon.
Know that you are loved so much by so many. Know that you are blessed to be surrounded with such incredible support and affection. Know that you are so lucky to have such kvelling grandparents; Saba, Grams and Mumah.
A doctor, a lawyer, a rabbi, an educator, a chef, an artist, a football player or even a garbage collector.....we wish for you that whatever your passion, you follow your dreams with integrity and find happiness in all that you do. We love you, Elie.
One of the great things about having a grandchild is that my son now can truly understand the depth of love that Connie and I have always had for him and his sister. But, he also has to understand that per Saba (grandfather) rule number one, I will always side with Elie!!
And The Journey continues..........
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