Remaking or requiem for retailers - business lifespans - Taking Stock - Column

Discount Store News, July 5, 1993 by Arthur Markowitz

We spend our years like a fleeting sound. The length of our life is seventy years, or by reason of strength eighty years. Their pride is only toil and futility, for it is speedily gone and we fly away.

Do businesses, like humans, have a lifespan, a time to be born, grown and develop, mature and then die, or in some instances be struck down ruthlessly in their prime?

That would seem to be the case, except that it's the exceptional businesses--a Sears, Kmart, Woolworth, Macy's or JCPenny--that last 70 or 80 years.

The retailing roll resounds with innovative and imaginative companies that make their mark during a lifespan that lasts only one or two generations. sometimes, they fail, like Korvettes, or else they are acquired, as happened with Office Depot's takeover of Office Club and WORKplace. Or they merge, as is the case with the proposed partnership between the Price Co. and Costco Wholesale.

Retailers, and other companies, have brief, but memorable, lifespans for either of one of two reasons. The first is a failure to read the marketplace and keep up with changes in their business. The list of chains felled by what is the merchandising equivalent of arrogance is long and ranges from Alexander's through King's and Woolco to Zayre.

The second, but just as important, reason for a retailer's curtailed lifespan is unpretentiousness, a concern for the immediate community and its people, rather than unbridled growth and national prominence. Remaining a local operation, the retailing equivalent of modesty, has often resulted in smaller, restrained chains that serve a limited market being unexpectedly overwhelmed by larger, fast-growing, more powerful, and sometimes insidious, forces. Smaller chains with shortened lifespans, sometimes just a decade, range from Mal's in Massachusetts, which went through bankruptcy and was liquidated, to Magic Mart in Arkansas and Missouri and Mohr Value Center in Missouri and Illinois, which were acquired by other discounters.

Completion of a lifespan, death for humans, and the business equivalent of bankruptcy or merger for retailers, comes at the most inopportune time--too often when the future seems brightest for all the individuals touched by the situation. Lives have to be reconstructed; consumers have to seek out new stores to shop, manufacturers have to find new customers to sell to and employees have to obtain new jobs.

Businesses have an advantage over humans--they can restructure and rejuvenate their operation. JCPenney seems to have achieved this, while Woolworth changes as continually as do its markets. Kmart, the past successful regeneration of the stagnant S.S. Kresge variety store operation, again faces the need to revitalize itself; Sears and Macy's are making major efforts to do so, and the Price Club/Costco partnership is the means whereby these two membership warehouses will accomplish this goal.

The remaking or demise of a retailer, its closing or acquisition, raises questions: will the refurbishing or acquisition be successful? Which competitor or competitors benefit from the closing of stores? How will the new market situation shape up? But for humans, at best, the completion of a lifespan engenders ruth or compassion. When people are paramount, the ruthless, abstract business situation no longer applies. Instead, the end of a lifespan evokes ruthfulness.