Word: ferkauf
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Dates: during 1960-1969
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Into the Midwest. Nor are bigger operators immune from pressures, as Korvette's experience plainly shows. Though Founder Eugene Ferkauf revolutionized retailing with his approach to discounting (TIME cover, July 6, 1962), Korvette's haphazard management was not equal to its ambition of simultaneously upgrading merchandise, adding new services and expanding the New York-based chain into the midwest. To check his chain's decline, Ferkauf last year merged into apparel-making Spartans Industries (which has promised the Federal Trade Commission to sell its own 96 Spartan-Atlantic discount stores) and turned over the reins to Spartans...
Shaky Foundation. In his frustrating search for competent, congenial top administrators, Ferkauf since 1964 has shuffled-or shucked off-one chairman, two presidents and three vice presidents. Last week his personnel merry-go-round was still spinning. Out went Chairman Hilliard J. Coan after only twelve months on the job, and two more vice presidents. Ferkauf is personally charming, but is a hard man to please...
Meanwhile, Ferkauf was negotiating to merge Korvette with Spartans Industries, which makes low-cost clothing, owns 93 discount stores and last year had $226 million in sales. Ferkauf's interest was less in Spartans itself than in its chairman, Charles Bassine, 57, whom he describes as "a benign kind of boss with inspirational qualities and a great organizational reputation." The two men are more than merely old friends. Ferkauf's eldest daughter is engaged to Bassine's son. Ferkauf thinks that Bassine may be just the administrator he has long been looking for-and so, in future...
...merger comes off, Bassine will have quite a chore. Korvette's furniture division sags with losses; its supermarkets barely break even, though Ferkauf says they are now "trending upwards." Privately, Ferkauf concedes that his empire was built too fast on a shaky foundation. The business was also damaged by its taking on some expensive airs. It tried simultaneously to upgrade its merchandise, add costly services, dress up its stores, and make expensive pushes into such distant cities as Detroit, Chicago and Baltimore. As a result, it hit wall-to-wall competition from established stores and supermarkets...
Right Prize. Ferkauf likes to say that "problems are potentials," and suggests that Korvette's will be solved by Bassine and himself. For his part, Bassine denies rumors that he will spin off Korvette's supermarkets, declaring that, "If we marry the lady, we sure enough are going to go with her children." His terms are tough. He insists on getting the title and powers of chief executive officer. In the past, Ferkauf has refused to let anyone have all that. Now he says that Bassine can be the big boss in the office, while Ferkauf himself returns...