by Patricia Sellers
If you're old enough to remember the investor Sandy Sigoloff, you were probably surprised to read that he died at 80. 80! Time has flown since the slick, black-maned Ming the Merciless, as he called himself, was storming into down-and-out retailers, slashing operations, and saving some (like Wickes) while flubbing others (like Bonwit Teller and B. Altman).
While Sigoloff's obits attached those retail names to his legacy, it is little known that without him, we might never have seen the creation of Home Depot (HD). In 1995, Home Depot's founders, Bernie Marcus and Arthur Blank, told me about their fateful run-in with Sigoloff, their onetime boss. I wrote about this in a Fortune cover story, "So you fail. Now bounce back!" about how superstar business-people recover from failure.
You can't always control your environment. Such is the business philosophy of Bernie Marcus and his business partner, Arthur Blank...
It was an April Friday in 1978 at Handy Dan's Los Angeles headquarters when Blank and Marcus got canned by Sanford Sigoloff, the retailer's new owner. The official reason was "unauthorized and unacceptable business practices," which related to employment of non-union workers. But personality clashes with Sigoloff were the real reason. The next day Ken Langone, an investor friend, told Marcus and Blank, "You've just been hit in the ass by a golden horseshoe. Let's go into business." Says Marcus: "Once I stopped stewing in my misery, I saw that Kenny wasn't crazy."
With $2 million in capital, Marcus and Blank began opening the kinds of stores they had dreaded competing against: hangar-size, no-frills outlets with high-grade service and a huge selection of products. Today, Home Depot (1994 revenues: $12.4 billion) tops the fast-growing home-improvement industry and hammers rivals on innovation. Says Marcus: "We're always looking for someone to crawl over our backs, to destroy us."
While Marcus and Blank have moved on from retailing (focusing on philanthropy and in Blank's case, owning the Atlanta Falcons), Home Depot has grown quite nicely. This week Home Depot reported 2010 net income of $3.3 billion on revenue of $68 billion.
I've been reading Credit Suisse (CS) analyst Gary Balter's reports on hardline retailers since the mid-'90s, when I wrote about companies like Home Depot (HD) and Sears (SHLD). Balter is not only a savvy analyst. He's also a very good writer. This morning at 7:17, Balter emailed this note to clients about Black Friday shopping, which he titled "Bring Back the Good Old Days." I'm on his email list, so MOREPatricia Sellers - Nov 25, 2009 12:28 PM ET
Home Depot (HD) hammered it home this morning--earnings beat expectations, and the stock is up 3%, to just under $27. Nice surprise after Lowe's (LOW) disappointed yesterday. The No. 2 home-improvement retailer reported a 19% profit dip in its second quarter and, even more worrisome to investors, a 9.5% decline in same-store sales.
So what is Home Depot, the market leader, doing right? The new Fortune, hitting newsstands this week, delivers MOREPatricia Sellers - Aug 18, 2009 2:19 PM ET
It was, to steal a Malcolm Gladwell term, a "tipping point" in my outlook on the cratering economy. I call it my "That Girl" moment.
It was the fourth Monday in November last year. I was at a Thanksgiving party at the home of Cathie Black, the president of Hearst Magazines. Marlo Thomas was there, too. "Saks is selling shoes for 75% off. It's incredible!" TV's onetime Ann Marie was crowing, MOREPatricia Sellers - Feb 27, 2009 1:01 PM ET
"We have a bunch of idiots on Wall Street that are kicking sand in the face of the American taxpayer."
-- Sen. Claire McCaskill, D-Missouri, on the floor of the Senate Friday. McCaskill introduced legislation stipulating that no employee of any company that accepts federal bailout money be allowed to earn more than the President of the United States. Obama's annual salary is $400,000. The bill came a day after Obama MOREJessica Shambora, Writer-Reporter - Jan 30, 2009 7:28 PM ET
"Most of the money we're investing as part of this plan will get out the door immediately and go directly to job creation, generating or saving 3 to 4 million new jobs. And the vast majority of these jobs will be created in the private sector -- because, as these CEOs well know, business, not government, is the engine of growth in this country."
-- President Barack Obama to business leaders, MOREJessica Shambora, Writer-Reporter - Jan 28, 2009 7:14 PM ET
We've been talking quite a bit about philanthropy here on Postcards. I like that. I hope you do too. Last week, I published Jennifer Buffett's Guest Post and told you about Melinda Gates. Here's another not-for-profit pioneer whose efforts derive from personal passion: Silda Wall Spitzer.
A dozen years ago, Spitzer couldn't find many ways for her three young daughters to perform community service. Now her daughters are on the way MOREPatricia Sellers - Sep 12, 2008 2:46 PM ET
I've talked on Postcards about the greatest sins of the big retailers: believing that if you build it, they will come. That focus on growth at all costs has hurt Starbucks (SBUX) and Home Depot (HD), whose stocks have just recently risen risen off of 52-week lows. Speaking of lows, there is Lowe's (LOW), which announced earnings Monday morning: down 8% in the second quarter. But thanks to solid expense MOREPatricia Sellers - Aug 18, 2008 1:23 PM ET
The news that Starbucks (SBUX) will close 600 stores and lay off as many as 12,000 employees is not only the news that Wall Street was waiting for. It is inevitable. One thing I've learned from my 24 years following retailers for Fortune is this: Every retailer that expands across the U.S. hits the wall on growth eventually. And every retail entrepreneur, no matter how talented, is eventually exposed as MOREPatricia Sellers - Jul 2, 2008 12:35 PM ET
|McDonald's gives Charles Ramsey free food for a year|
|Ackman wins, P&G dumps CEO|
|The 'chicken poop' credit and other bad tax breaks|
|Doomsday investors betting on market crash|
|Another downer day on Wall Street|