The paradigm buster

Discount Store News, Dec 8, 1997 by Laura Heller

Bill Podany has spent much his life beyond the boundaries of the traditional world -- whether personal or professional. Raised among entertainers, Podany rose from his family's vaudeville roots to chief operating officer and executive vice president of one of the nation's strongest regional retail chains, ShopKo Stores Inc.

Podany put himself through college performing as a unicyclist, an unconventional beginning for a guy who has built a reputation on unconventional business practices.

In the retail world, he us a maverick who doesn't believe in maintaining the status quo and prides himself on his ability to instigate change, however unconventional the methods.

"I'm big time into breaking paradigms." Podany proclaimed.

In his 25 years in retail, Podany has risen quickly through the ranks from assistant buyer with Dayton Hudson to his current position on ShopKo's board of directors.

A Minneapolis native, Podany said he was always fascinated with Dayton Hudson. "I had a natural interest in the communication arts."

He ties in his show business experience to the business world in which he now operates.

What's more, his experience in public speaking has served him well, and, trite analogies aside, Podany has actual training as a master of ceremonies -- something, no doubt, that has come in handy while merchandising a large retail operation.

Podany believes his entertainment background has aided him in being a better retailer. "It helped me to be mature, responsible and accountable." Podany told DSN. "And those are good lessons for us today in business."

After joining ShopKo in November 1994, he immediately went to work smashing pre-existing business paradigms and ultimately helping set the stage for ShopKo's emergence as an upscale discount retailer that competes with the best of the national chains. So how does he do it?

By shaking things up.

Founded 35 years ago as a single store in Green Bay, Wis., ShopKo has remained a regional operation. When it faced competition from rapidly expanding national chains, ShopKo's leadership developed Vision 2000 and pledged to grow through acquisitions.

Dale Kramer, ShopKo's president and ceo, engineered Vision 2000, investing heavily in logistical systems and store modernization, and repositioning the company against its competition. Now the next business model, Beyond 2000, focuses on continuous transformation. Podany credits Kramer's foresight for saving ShopKo from the fate met by many regional discounters.

"I came in at the tail end of [Vision 2000] and my principal role was to totally and fundamentally change how we operate the company in terms of merchandising, marketing, logistics and store operations," Podany said.

ShopKo faces stiff competition from the Big THree. Wall-Mart and Kmart operate in approximately 90% of ShopKo's markets, and Target stores are in 65% of its territory. According to Podany, ShopKo's future lies in its ability to differentiate itself from other discount stores.

ShopKo has not only survived an onslaught of national competitors over the last five to 10 years, but also had the foresight to reposition itself to grow in sale and earnings.

"We used to be everything to everybody," he said. "Now we're selectively dominant and more like a specialty store."

Podany's team jettisoned products and categories deemed unfocused and repositioned the store to target "lifestyles" rather than the broad-based commodity and discount items the stores had been selling for years.

Podany moved to overhaul ShopKo's apparel department. He established category lines that were refocused to cater to today's more casual lifestyle. He got rid of everything that wasn't casual or lifestyle-driven.

Gone are dress shirts, men's neckwear, structured career clothing (in men's, women's and children's), topcoats and outer coats -- in other words, everything that didn't fit Podany's new vision for ShopKo.

Conventional business rationale says to buy light, streamline inventory and stock deep only with the most common size. But Podany is hardly conventional.

Rather, he bought deep, maintained a large inventory and extended lines into plus sizes for men and women.

"It set the place upside down," he said. "But we've had just tremendous increases in apparel over the last three years." Back-to-back increases and double the sales in plus sizes, to be precise.

"As a retailer, we were known for our hard lines and healthcare business and had no legacy in apparel. Now our apparel is leading the business in terms of profile," Podany said.

"We used to sell cheap apparel cheaply," he added. "Today, our apparel is focused on a deep commitment to style, sizes and color."

For Podany, shaking things up doesn't stop at apparel. ShopKo's internal executive structure has changed as well. Whereas each ordering and product mix, the company is now decentralized and operates as one.

Overall business plans are laid out a year in advance with the big picture in mind. While some categories are more profitable than others, each is managed with an eye to the end result.