'Retail' Archive
The New York Times has an interesting piece about the difficulty of shutting down bad hospitals, taking as its example University Hospital in Syracuse, New York. The hospital, which is owned by SUNY Upstate Medical University, has had its quality issues over the years, with low ratings from HealthGrades and numerous instances of preventable medical errors.
The article enumerates the reasons bad hospitals rarely get shuttered: There’s no federal agency overseeing hospital quality, they are major employers in any given community, etc. And it focuses particularly on the situation in New York — with its exceptionally expensive and bloated hospital system — where attempts to improve University Hospital by merging it with another Syracuse facility (Crouse Hospital) have failed.
The story used to frame the discussion, of a woman who has undergone some 20 surgeries to treat incontinence and has ended up worse than ever because of medical errors, is heartbreaking. And for me, it’s yet another example of how the attitude we’ve taken to health care — namely, that access to decent care is not a fundamental right — has contributed to a patchwork system of health care delivery and oversight that serves our citizens badly.
The Woolworths retail chain launched its biggest ever sale Friday in preparation for its imminent demise. If you’re thinking, “Hasn’t Woolworths already gone out of business?” let me explain that I’m referring to the Woolworths chain of variety stores in the UK. The British offshoot of the original American five-and-dime store, operated by Woolworths Group plc, managed to soldier on (albeit mostly unprofitably) for 25 years after it split from its American parent in 1982.
Now the end has apparently come for 99-year-old Woolies (as it’s affectionately known to the British who no longer shop there), which sells everything from candy to clothing to toys and household goods. Woolworths Group placed its ailing 800-store retail arm in administration (the UK equivalent of Chapter 11) last month after failing to find buyer for the chain. (Deloitte & Touche LLP, which is overseeing the bankruptcy proceedings, is continuing to search for a buyer.) Woolworths in the UK traces its roots back to 1909 when F.W. Woolworths, a subsidiary of its US parent, opened its first store in Liverpool.
Indeed, Woolworths UK was done in by many of the same forces that conspired to bring down the US chain. Competition from discounters, including Wal-Mart-owned ASDA and Britain’s largest retailer, Tesco, siphoned off customers. In a bid to diversify, management neglected the increasingly shabby stores, in favor of more profitable ventures. Steve Johnson, who arrived in September to run the company, promised to administer “a good dose of basic shop keeping” to save the business, but to no avail. The coup de grâce was the recession in the UK, which is punishing British retailers just as severely as the US recession is battering merchants here.
While Woolworths may soon vanish from British high streets, the venerable name will live on in Australia where Woolworths Limited (which is not connected to the US or UK chains in any way) is the nation’s #1 food retailer. The Woolworths moniker can also be found in South Africa, where Woolworths Holdings Limited operates department stores and supermarkets, and in Austria, Germany, and Mexico.
Whatever became of Woolworths in the US? The business, founded by Frank Winfield Woolworth in 1878, began to decline in the 1980s as discounters, including Wal-Mart and Kmart, chipped away at its market. The firm diversified into shoes and sporting goods with the acquisition of Kinney Shoe (1963) and later Foot Locker (1974), changed its business to sporting goods and name to Venator Group in 1997, and now does business as Foot Locker.
Fortunately the 60-story wedding cake-style Woolworth Building — built in 1913 and for 16 years the tallest building in New York City’s growing skyline — still stands in lower Manhattan as a tribute to the fallen retailer. It was designated a landmark in 1983, about the time Woolworths began its decline.
As if the world needed any more proof that the average American consumer is a greedy troglodyte, the sad news over the weekend about the trampling death at a Wal-Mart in New York only confirms it. For the past couple holiday seasons, I’ve turned on the news the day after Thanksgiving and watched with embarrasment the all too familiar footage of hordes of shoppers storming and shoving their way through the doors of retailers at 6 AM. All to save a few bucks on a DVD player or the latest iteration of Rock Band. And to make matters even worse, many of the customers at the Valley Stream Wal-Mart complained that the store closed following the death.
What holiday spirit.
It’s high time that retailers abandon the Black Friday events. (So named because, according to some, it is usually the time when retailers finally turn a profit after operating at a loss for the rest of the year. Turning the red ink black, if you will.) A sale is not something worth dying for. Granted, given the day’s importance as the biggest shopping day of the year, ending the practice will likely not happen.
But surely there are alternative means to having a healthy Christmas shopping season without turning every store in America into a loony bin free for all. How about instead of putting everything on sale, only put certain rotating items on sale and spread it out over the course of several weeks? Instead of allowing everyone in at once, hand out tickets and make them stand in line and enter in groups with time limits. Hell, you could even hire some scary biker dudes as security and post them at the front. People might think twice about acting like savages when they see those tattoos and billy clubs.
I don’t know what the answer is, but something’s gotta change. And it would be nice if the retail industry would take it upon itself to do something about it, rather than reacting to the inevitable wrongful death suit that is no doubt coming Wal-Mart’s way very soon.
On Friday Wal-Mart Stores announced that Mike Duke, currently head of the company’s international division, will succeed Lee Scott as president and CEO of the world’s largest retailer in February (read here). Earlier in the week, the world’s second-largest retail chain, France’s Carrefour, announced that its CEO, José Luis Duran, is being replaced in January by a 32-year-veteran of Nestlé, Lars Olofsson (read here).
Scott, who has held the top job at Wal-Mart for nearly a decade, appears to be going out on top. Wal-Mart is one of the precious few bright spots in today’s bleak retail environment. Indeed, hard times appear to be good times for Wal-Mart (see previous post). After a tide of bad publicity and merchandising missteps by Wal-Mart in the mid-2000s, which tarnished its reputation relative to rivals Target and Costco, the tables have turned in Wal-Mart’s favor. In October, a dismal month for the nation’s retailers, Wal-Mart stood apart, posting a 2.4% sales gain and beating its own and analysts’ forecasts. The company is growing market share and appears poised for a strong holiday season (read here). “This is the kind of environment that Sam Walton built this company for,” crowed Scott at a meeting of analysts and investors in Bentonville recently.
Duke, who at 58 is just a year younger than the retiring Scott, has the resume for the job, having led the Wal-Mart Stores division from April 2003 until September 2005 before taking responsibility for international.
Duran, who led Carrefour for just three years, is leaving under pressure from its major shareholders, including the US private equity firm Colony Capital and Bernard Arnault, chairman of luxury group LVMH Moet Hennessy Louis Vuitton. After winning seats on Carrefour’s board earlier in this year, the investors essentially demoted Duran in August, stripping him of the chairman’s title, and now have succeeded in orchestrating his ouster. Duran, who had worked to expand Carrefour’s international business as a hedge against sagging sales in France, was done in by the global spending slowdown and investor dissatisfaction.
Carrefour’s shares have lost about 44% of their value since January, while Wal-Mart’s share price is up about 11% (although down from its September high.)
Scott has certainly chosen an opportune time to go. Duran, alas, had no choice.
My parents insist that I became a fan of the New York Yankees after watching the TV broadcast of Don Larsen’s perfect game in the 1956 World Series, when I was not quite three months old. I tell people it was earlier than that; I say that I was a Yankee fan in utero.
It was with something other than professional interest, then, that I saw the news about how the new Yankee Stadium, going up next to the fabled House That Ruth Built, is being wired by Cisco Systems to have the most advanced information network in any North American stadium. (That is, at least until the Oakland Athletics open their proposed new stadium, Cisco Field, sometime in this century.)
The $1.3 billion Yankee Stadium, scheduled to open next spring, will give the affluent if pitching-challenged franchise a new place to display its 26 championship banners. Not coincidentally, that other baseball team in New York City next year will open its own new stadium, Citi Field, next to the site of the unsightly Shea Stadium, where the Yankees played for two seasons, 1974-75, while The House That Ruth Built was purchased by The City of New York, reconstructed, and reopened in 1976 as what fans called “the House That Lindsay Rebuilt,” referring to former mayor John Lindsay, who shepherded the project through the city bureaucracy to keep the Yankees from leaving town.
When the Yankees returned to Yankee Stadium in 1976, they won an American League pennant following a 12-year drought. After signing superstar outfielder Reggie Jackson as a free agent, the Yanks went on to win the World Series in 1977 and 1978. The Bronx Bombers clearly hope a new stadium will similarly revive their championship ways in 2009, since winning their most recent World Series in 2000.
Among the capabilities of the Cisco network in the new Yankee Stadium will be central control of some 1,100 flat-screen HDTV monitors throughout the stadium and the ability to show something different on each of those monitors. The ball players will have a computer in each locker, and we hope they will use those computers just to look at MLB.com’s Web sites.
Opening a new stadium is no guarantee of financial success — just ask the Pittsburgh Pirates. The Yankees want to regain their former glory in the bright new stadium, after a record 4.3 million fans filed through the turnstiles of the old Yankee Stadium during the 2008 season, but those fans won’t return year after year if the team doesn’t win, no matter how many flat-screens are posted throughout the edifice.
* Yankees Entertainment & Sports Network, aka the YES Network.