Sam Walton opened his first Wal-Mart store in Rogers, Arkansas today in 1962. Now WE know em

sam-walton

Samuel Moore “Sam” Walton was born March 29, 1918 in Kingfisher, Oklahoma.

A statue of Sam Walton and his dog outside of Wal-Mart in his birthplace of Kingfisher, Oklahoma.

A statue of Sam Walton and his dog outside of Wal-Mart in his birthplace of Kingfisher, Oklahoma.

In 1923, Sam and his family moved from Oklahoma to Orlando, Florida.

There the Walton’s moved from one small town to another for several years.

While attending eighth grade in Shelbina, Sam became the youngest Eagle Scout in the state’s history.

Eventually the Walton’s moved to Columbia, Missouri.

Growing up during the Great Depression, Sam Walton worked on numerous chores to help make financial ends meet for his family. He milked the family cow, bottled the surplus milk, and drove it to customers.

Then, Sam would deliver Columbia Daily Tribune newspapers on a paper route. In addition, he also sold magazine subscriptions.

Upon graduating from David H. Hickman High School in Columbia, Sam was voted “Most Versatile Boy”.

After high school, Sam Walton decided to attend college, hoping to find a better way to help support his family. He attended the University of Missouri as a ROTC cadet. During this time, he worked various odd jobs, including waiting tables in exchange for meals.

Sam also joined the Zeta Phi chapter of Beta Theta Pi fraternity while in college. He was also tapped by QEBH, the well-known secret society on campus honoring the top senior men, and the national military honor society Scabbard and Blade.

Upon graduating in 1940 with a Bachelor’s of Economics, Sam was voted “permanent president” of his class.

Sam Walton then joined J.C. Penney as a management trainee in Des Moines, Iowa three days after his graduation.

This position paid him $75 a month.

Sam resigned from J.C. Penney in 1942 in anticipation of being inducted into the military for service in World War II.

In the meantime, Sam worked at a DuPont munitions plant near Tulsa, Oklahoma.

Then Sam joined the U.S. Army Intelligence Corps, supervising security at aircraft plants and prisoner of war camps. In this position he served at Fort Douglas in Salt Lake City, Utah. He eventually reached the rank of Captain.

After the war in 1945, 26 year old Sam Walton, with the help of a $20,000 loan from his father-in-law along with $5,000 he had saved from his time in the Army, Sam purchased a branch of the Ben Franklin Stores in Newport, Arkansas from the Butler Brothers.

Sam’s focus was on selling products at low prices to get higher-volume sales at a lower-profit margin. He portrayed it as a crusade for the consumer.

Sam experienced setbacks, because the lease price and branch purchase were unusually high, but he was able to find lower-cost suppliers than the ones used by other stores.

Walton passed on these savings to his customers.

Sales increased 45 percent in his first year of ownership to $105,000 in annual revenue, which increased to $140,000 the next year and $175,000 the year after that.

Sam’s second store, the tiny “Eagle” department store, was down the street from his first Ben Franklin and next door to its main competitor in Newport. Walton leased the space mainly to preempt his competitor from expanding. It held its own, but didn’t fare as well.

Within the fifth year, the store was making $250,000 in revenue.

This success drew the attention of his landlord, P.K. Holmes, whose family had a history in retail.

Admiring Sam’s great success, and desiring to reclaim the store (and franchise rights) for his son, Holmes refused to renew the lease. The lack of a renewal option, together with the prohibitively high rent of 5% of sales, were early business lessons to Sam Walton. Despite forcing Walton out, Holmes bought the store’s inventory and fixtures for $50,000, which Walton called “a fair price”.

Sam Walton then packed up his wife Helen and managed to negotiate the purchase of a new location on the downtown square of Bentonville, Arkansas.

When the lease for the location expired, Sam couldn’t reach an agreement for renewal, so he opened a new Ben Franklin franchise in Bentonville, Arkansas and called it “Walton’s Five and Dime.”

They opened “Walton’s Five and Dime” for business with a one-day remodeling sale on May 9, 1950.

“Walton’s Five and Dime” Bentonville, Arkansas

“Walton’s Five and Dime” Bentonville, Arkansas

Before Sam bought the Bentonville store, it was doing $72,000 in sales.  He increased sales to $105,000 in his first year and then $140,000 and $175,000 on his third year.

At this time, Sam still had his tiny “Eagle” store 220 miles away in Newport with a year left on the lease.

A cash-strapped Sam had to learn to delegate responsibility between the two stores.

His initial success operating two stores at such a distance (and with the post war baby boom in full effect), Sam became enthusiastic about scouting more locations and opening more Ben Franklin franchises.

Sam decided to buy a small second-hand air-plane (Both he and his son John would later become accomplished pilots and log thousands of hours scouting locations and expanding the family business.)

Then 1954, Sam opened a store with his brother Bud in a shopping center in Ruskin Heights, a suburb of Kansas City, Missouri. With the help of his brother, father-in-law, and brother-in-law, Sam went on to open many new variety stores. He encouraged his managers to invest and take an equity stake in the business, often as much as $1000 in their store, or the next outlet to open. (This motivated the managers to sharpen their managerial skills and take ownership over their role in the enterprise.)

By 1962, along with his brother Bud, he owned 16 stores in Arkansas, Missouri, and Kansas (fifteen Ben Franklins and one independent, in Fayetteville).

Wal-Mart

Then on July 2, 1962, Sam Walton opened the first Wal-Mart Discount City store located at 719 Walnut Avenue in Rogers, Arkansas. The building is now occupied by a hardware store and an antique mall.

First Wal-Mart store in Rogers, Arkansas (corporate.walmart.com)

First Wal-Mart store in Rogers, Arkansas (corporate.walmart.com)

Within five years, Wal-Mart expanded to 24 stores across Arkansas and reached $12.6 million in sales.

Contrary to the prevailing practice of American discount store chains, Walton located stores in smaller towns, not larger cities.

Thus in 1968, Wal-Mart opened its first stores outside Arkansas, in my hometown of Sikeston, Missouri and Claremore, Oklahoma, not far from where I live now.

Sam Walton incorporated Wal-Mart on October 31, 1969, and publicly traded on the New York Stock Exchange in 1972.

The company is still headquartered in Bentonville, Arkansas.

Wal-Mart has also became the largest grocery retailer in the United States. In 2009, it generated 51 percent of its $258 billion sales in the U.S. from its grocery business.

Wal-Mart also owns and operates the Sam’s Club retail warehouses in North America.

By 1988, Wal-Mart was the most profitable retailer in the United States, and by November 1990, it outsold K-mart.

By 1991, it outsold Sears in retail, making it America’s largest retailer, a distinction it still holds.

Samuel Moore Walton died on Sunday, April 5, 1992, of multiple myeloma, a type of blood cancer, in Little Rock, Arkansas.

The news of his death was relayed by satellite to all 1,960 Wal-Mart stores.

At the time, his company employed 380,000 people. Annual sales of nearly $50 billion flowed from 1,735 Wal-Marts, 212 Sam’s Clubs, and 13 Supercenters.

His remains are interred at the Bentonville Cemetery.

Now WE know em

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