Sam Walton

http://en.wikipedia.org/wiki/Sam_Walton

Founder of two American retailers, Wal-Mart and Sam's Club.

Early Days

Sam Walton was born on March 29, 1918, in Kingfisher, Oklahoma, the first of two children to Thomas Gibson Walton, a banker, farmer, farm loan appraiser, and real estate and insurance agent, and Nancy Lee Lawrence Walton.

Walton showed signs of an entrepreneurial gift early on, selling magazine subscriptions, starting at about age seven or eight. He worked his way through college with newspaper routes. After adding routes and hiring helpers, he was earning $4,000 to $5,000 a year. He attended the University of Missouri at Columbia, earning a business degree in 1940.

His first job was with J. C. Penney. In January 1942, he returned to Oklahoma, where he worked for a DuPont gunpowder plant in Claremore. There, he met his future wife Helen Robson, daughter of a prominent local attorney, rancher, and politician. Walton was inducted into the U.S. Army on July 16, 1942, and was married on February 14, 1943. The couple was transferred to Salt Lake City, Utah, where he served with Company A, 777th Military Police Battalion. During the family’s military experience, Walton’s wife decided that she would never again move to a town with a population larger than 10,000.

Their first child was born in 1944, and Walton was discharged from the military in 1945. Three more children followed.

Beginnings of the Businessman

The couple bought a Ben Franklin five-and-dime franchise in Newport (Jackson County) and opened it for business on September 1, 1945. There, Walton began to develop the discount marketing concept that would make him the richest man in the country. In his autobiography, Sam Walton: Made in America (1992), Walton described an early discount promotion: “Here’s the simple lesson we learned….By cutting your price, you can boost your sales to a point where you earn far more at the cheaper retail price than you would have by selling the item at the higher price. In retailer language, you can lower your markup but earn more because of the increased volume.”

Growing from a sales volume of $80,000 to $225,000 in three years, the Newport store was so successful that the landlord did not renew Walton’s lease, giving the location instead to his own son. The Waltons moved to Bentonville (Benton County) on May 1, 1950. By May 9, with his father-in-law’s help, Walton had bought the Harrison Variety store and opened for business with a one-day remodeling sale. Although a Ben Franklin store, it was named Walton’s 5 & 10 and was the third self-service variety store in the nation and the first in the state. Quite new in its concept, a self-service store was one wherein the clerk did not bring goods to the customer, but rather the customer was free to examine the goods on the shelves and then bring them to the clerk for purchase.

Discount marketing requires a large customer base, problematic in a town of 3,000 people. Walton’s answer was to open stores in other small towns. In 1952, Walton opened a Ben Franklin franchise in Fayetteville (Washington County), twenty-five miles south of Bentonville. Soon, he opened another. By then, his brother Bud was on board, helping Walton launch and manage the stores. By the early 1960s, the Waltons owned sixteen Ben Franklin stores in Arkansas, Missouri, and Kansas. It was the nation’s largest chain of independently owned variety stores.

To service his multiple stores in isolated small towns, Walton learned to fly an airplane. He wrote, “We never could have maintained the operating controls of communications without having the ability to get into our stores on a consistent basis.” He also scouted for store locations from the air. The first of his stores chosen from an aerial scouting was outside Fort Leonard Wood, Missouri, and it grossed two million dollars in its first year.

Discounting was gaining popularity throughout the United States, adopted by such stores as Kmart, Woolco, Gibson’s, and Zayre’s. Walton asked Ben Franklin to cut its margins by fifty percent to maximize discount marketing. The franchiser declined. Walton’s response was to push forward with his own discount chain, opening the first Wal-Mart in Rogers (Benton County) in July 2, 1962. Continuing expansion and the success of the marketing idea created a need for fresh capital.

Walmart Started

In 1969, Wal-Mart was incorporated. By January 31, 1970, Walton and his brother owned eighteen Wal-Mart stores and fourteen Ben Franklins. In 1970, the company offered 300,000 shares of public stock. By 1976, Walton had closed all his Ben Franklin stores, and, by the end of 1980, 330 Wal-Marts were in operation. By 1990, there were 1,573 stores, and annual sales were $25.8 billion.

In 1991, Wal-Mart became the nation’s largest retailer, with 1,700 stores. On January 12, 1997, the company surpassed $100 billion in sales. Wal-Mart associates, as the employees are called, were offered stock options as part of their employment package. Anecdotes of longtime hourly workers with six-figure retirement accounts are common. Walton became a management leader, his autobiography ranking fourth in 1992 on Publishers Weekly’s Hardcover Nonfiction Bestseller List. At his death, Walton’s net worth was estimated at $21 billion to $23 billion.

The story that made Walton a national figure was the hula down Wall Street. It began with Wal-Mart executive David Glass, in a Hawaiian shirt and grass skirt, doing the hula before howling employees at Wal-Mart headquarters to celebrate the company’s stock hitting a record high. Walton made a wager with Glass that if 1983’s pre-tax profits reached eight percent, he would hula down Wall Street at high noon. The profits exceeded that goal, and Walton donned the shirt and the skirt and did as he promised.

Though he was generally admired, Walton’s success was not without its critics. A 1995 article published in Economic Development Review revealed that, in thirty-four small communities studied, small businesses in towns with a Wal-Mart suffered cumulative sales declines of 25.4 percent after five years, while towns lacking a Wal-Mart lost 12.9 percent of their general merchandise sales in the first year a Wal-Mart opened in a neighboring town. Other studies suggest that the increased cost of roads, water, sewage, telephone, and other services installed in Wal-Mart locations exceeds the sales and property tax revenues collected from new stores. In efforts to protect their home-grown businesses and cultures, dozens of municipalities have lobbied hard to keep Wal-Mart out of their towns. While many consumers, particularly in the South, were grateful to Wal-Mart for serving small rural markets, others feared for the survival of their local merchants and economies. The editor of the Jackson, Mississippi, Clarion-Ledger wrote on June 3, 1990, “Is it really worth saving a few bucks to virtually destroy the heart and soul of our small town business community?”

In an effort to keep labor costs low, Wal-Mart pioneered the use of part-time and temporary help, thus eliminating such overhead as employee health benefits and overtime. Some employees have accused Wal-Mart of demanding “off-the-clock” work. Too, Wal-Mart has been sued for gender discrimination and accused of profiting from the use of third-world sweatshops.

On the other hand, Wal-Mart, under Sam Walton, was a most innovative retailer. His company was the first to use the UPC bar code to automate the inventory process. In 1983, the company set up a private satellite system to track delivery trucks, process credit card transactions, and transmit sales data. This last process led to Walton’s pioneering “just-in-time” inventory. This method eliminates the need for storage at each store. Instead, the local distribution center can know, via satellite, when a given store is nearly out of a product and can truck more in immediately. These products are simply stored in the semi trailer until the night crew can offload the truck and restock the shelves.

Sam Walton was not an introspective man. When reporters and biographers asked him about his life, he usually answered with anecdotes about Wal-Mart. Wal-Mart was his life, and he expected it to be equally important to everyone associated with the company. He would hold pep rallies at his stores, exhorting employees to perform Wal-Mart cheers and “squigglies,” little dances that went along with those cheers. He had them repeat a little mantra: “I solemnly promise and declare that every customer that comes within ten feet of me, I will smile, look them in the eye, and greet them, so help me Sam.”

In 1992, Walton was awarded the Medal of Freedom by President George H. W. Bush. During the 1970s, he went quail hunting with President Carter. But he drove an old pickup, now on display at the Wal-Mart Museum in Bentonville, and he wore the clothes he purchased for his stores, bragging at least once about the fine shoes he had bought from Wal-Mart. He strove to maintain an image of commonality.

Death

Walton died of cancer on April 5, 1992, in Little Rock (Pulaski County) and is buried in the Bentonville Cemetery directly behind Wal-Mart headquarters, within sight of the satellite dishes that helped make him the richest man in America.

• Reference: Find A Grave Memorial - SmartCopy: Mar 26 2016, 16:22:19 UTC