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Building retail empires

Christine Harland is Director of Camden Writers

Sam Walton: Made in America, by Sam Walton and John Huey (1996)

Born in 1918 in Kingfisher, Oklahoma, a whistle stop on the Oklahoma, Kansas & Texas railroad line, Sam Walton could feel small-town America in his bones. That profound sense of his environment lay at the heart of Walton's success. He understood the value of the hard-earned dollar for the majority of Americans and he appreciated the latent buying power in areas that a lot of larger corporations passed by.

Walton loved people and he loved the retail business. He worked first for a franchise, managing variety stores in one obscure American town after another, moving his family 16 times in two years. Helen Walton didn't mind but told her husband she would never live in a 'big city', by which she meant anything over 10,000 inhabitants.

Like most "overnight" successes, Wal-Mart was 20 years in the making. In Made in America, Sam walks us through the early years, taking us into the stores of the 1940s and 1950s: small, dimly lit spaces, with wooden floors and counters covered with a jumble of merchandise. We watch as he learns new retail techniques – self-service, modern displays, discounting – and applies them in his own stores. We go with him to John Dunham's store – it's doing better than Sam's – and spend hours looking at how John displays his goods, what he's selling at what price, who comes in to buy.

Sam Walton spent hours observing the customers in his own stores. Just after the Depression, Walton was standing with his manager, Charlie Baum, in the Bentonville, Arkansas shop watching the ladies bend over large barrels full of bargains. After a few minutes, Sam turned to him and said, "One thing we gotta do, Charlie, is be real strong in lingerie." Employees remember Sam arriving in his station wagon – so full of ladies underwear he could hardly see to drive. He would sell ladies' undies at the unheard of price of four to the dollar and women flocked from miles around.

Sam also kept a close eye on his competitors' staff. "Early on, I did something I would do for the rest of my run in the retail business without any shame or embarrassment whatsoever: nose around other people's stores searching for good talent." Sam's first real 'hire' was Willard Walker, the manager of a competitor's retail store in Tulsa, Oklahoma. Walton's lure was 2% of his store's profits and everyone advised Willard against it, reminding him that 2% of nothing is nothing. Later, when Wal-Mart went public, Willard borrowed money to buy more stock and it wasn't long before he was a millionaire many times over.

Not everyone was as prescient as Willard. Sam operated several franchises for the Ben Franklin Store chain. One day their smart executives marched lock-step into Sam's office to tell him not to build any more of "those Wal-Mart stores". Sam says, "I've always been a maverick who enjoys shaking things up and creating a little anarchy." There are many others who must wish they had taken Sam Walton more seriously when he made early partnership offers, but nobody wanted to gamble on the first Wal-Mart so he did it on his own.

Family was paramount to Helen and Sam Walton and they lived as ordinary a life as possible. The family was organised early on as a partnership, an arrangement that taught their four children to work responsibly with one another. John Walton, their second son, invested his paper route money and his Army income in the early ventures, an investment that by the early 1990s figured around $40m.

From a young age the Walton children worked for the company in one way or another – the business was part of their lives. They remember family trips across country in their DeSoto station wagon with their dog, Tiny, the canoe strapped to the top, and stops in every town to check out competitors' stores. The family, the dog, the canoe and the station wagon even made a foray into New York City where they attended the theatre in Bermuda shorts.

As conservative as Sam Walton was in his private life, we see that he was aggressive and fiercely competitive in business. To be the best was almost a religion. According to David Glass, one-time CEO of Wal-Mart, "Two things about Sam Walton distinguish him from almost everyone else. First, he gets up every day bound and determined to im­prove something. Second, he is less afraid of being wrong than anyone I've ever known."

In 1985, Sam Walton was named 'The Richest Man in America' by Forbes magazine. Sam has a laugh as he imagines all the folks in New York saying "Who?" and "He comes from where?"

"They found out all these exciting things about me: I drove an old pickup truck with cages in the back for my bird dogs, or I wore a Wal-Mart baseball cap, or I got my hair cut at the barbershop just off the town square."

It was hard for him to believe that anybody cared. If Sam Walton seems like a man surprised by his own success, he lets the cat out of the bag towards the end of his book.

"Scribbling notes on my coffee-stained yellow pad or hauling boxes of ladies' lingerie in my station wagon, maybe people didn't take me that seriously. They assumed we couldn't be in it for the long haul."

"That misunderstanding worked to our advantage for a long time, and enabled Wal-Mart to fly under everybody's radar until we were too far along to catch."

America, sam walton, wal-mart
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