Careers in Retail 9781441625847, 9781582075112

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We live in a consumer society after all, and the retail industry plays

a huge part in our daily lives. Retail is big business, employing about 15 million people in the United States alone, or nearly 12 percent of all U.S. jobs. Many opportunities exist in retail beyond ringing up merchandise behind a cash register. Retail also has opportunities for people interested in determining what goods will be sold, getting these goods to the right place at the right time, and managing the operations, finances, and administration of retail companies. For anyone interested in a career in retail,

Careers in RETAIL

Careers/Job Search

this guide will tell you what you need to know to prevail in your job search.

Careers in Retail

Turn to this WetFeet Insider Guide to explore • Current trends affecting the retail industry today, such as industry consolidation and the omnipresence of Wall Mart. • Factors to consider when determining which industry sector and which companies are for you. • Where most opportunities are found, with profiles of 22 leading retail companies. • Descriptions of key jobs including buyer, merchandise manager, department manager, director of marketing, and marketing analyst. • The lifestyle, hours, and compensation you can expect from a career in retail. • What professionals like and dislike about working in the industry. • What to expect from the recruiting process and how to impress your interviewers.

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WetFeet Insider Guide 2006 Edition

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About Our Name One of the most frequent questions we receive is, “So, what’s the story behind your name?” The short story is that the inspiration for our name comes from a popular business school case study about L.L. Bean, the successful mail-order company. Leon Leonwood Bean got his start because he quite simply, and very literally, had a case of wet feet. Every time he went hunting in the Maine woods, his shoes leaked, and he returned with soaked feet. So, one day, he decided to make a better hunting shoe. And he did. And he told his friends, and they lined up to buy their own pairs of Bean boots. And L.L. Bean, the company, was born . . . all because a man who had wet feet decided to make boots. The lesson we took from the Bean case? Lots of people get wet feet, but entrepreneurs make boots. And that’s exactly what we’re doing at WetFeet.

Careers in Retail 2006 Edition

WetFeet Insider Guide

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Careers in Retail 2006 Edition ISBN: 978-1-58207-584-6 Photocopying Is Prohibited Copyright 2005 WetFeet, Inc. All rights reserved. This publication is protected by the copyright laws of the United States of America. No copying in any form is permitted. It may not be reproduced, distributed, stored in a retrieval system, or transmitted in any form or by any means, in part or in whole, without the express written permission of WetFeet, Inc. The publisher, author, and any other party involved in creation, production, delivery, or sale of this WetFeet Insider Guide make no warranty, express or implied, about the accuracy or reliability of the information found herein. To the degree you use this guide or other materials referenced herein, you do so at your own risk. The materials contained herein are general in nature and may not apply to particular factual or legal circumstances. Under no circumstances shall the publisher, author, or any other party involved in creation, production or delivery of this guide be liable to you or any other person for damages of any kind arising from access to, or use of, its content.

Table of Contents Retail at a Glance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 The Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Industry Breakdown . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Industry Rankings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Industry Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Picking and Choosing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

The Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 On the Job . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75 The Big Picture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76 Key Jobs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77 Real People Profiles. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81

The Workplace. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103 Lifestyle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104 Culture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106 Workplace Diversity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107 Compensation and Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108

TAB LE O F CO NTE NT S

Career Path. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109 Insider Scoop . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111

Getting Hired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115 The Recruiting Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116 Requirements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119 Interviewing Tips. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120 Getting Grilled . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125 Grilling Your Interviewer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126

For Your Reference . . . . . . . . . . . . . . . . . . . . . . . . . . 129 Industry Jargon. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130 Recommended Reading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133 Additional Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144

C AR E E R S I N R E TAI L AT A G L A N C E

Retail at a Glance Opportunity Overview •

Many undergrads go into merchandising careers or store-management careers in retail. Undergrads can also enter careers in the retail industry in a wide range of typical corporate functions, such as HR, finance, IT, marketing, and most other corporate career tracks.

•

MBAs are typically hired by big retail chains into fast-track finance (and sometimes merchandising) positions.

•

Folks interested in product development and production, package design, and fashion design and production will find opportunities at retailers that design and produce their own private-label merchandise.

•

Engineers can find a employment working for big retailers in functions such as logistics and distribution.

•

Retail is an industry that is becoming increasingly reliant on technology to increase operating efficiencies, so there are lots of IT positions available. Currently, many big retail companies are interested in engineers and IT folks with experience dealing with radio frequency identification technology.

•

Success in retail demands flexibility, since customer needs and desires are changing constantly. You’ll find that flexibility is a necessity no matter where you work in retail, from merchandising to finance.

•

Some of the big retailers offer excellent training programs for college grads and MBAs; these are a great way to launch your career in retail.

•

Doing a retail internship is the best way to get a job in the industry and at a specific retail company.

•

Retail careers can be unstable. If your company is acquired by or merges with another company, your job could disappear. The same holds true if the market for the kind of merchandise you sell goes south.

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•

While retail sales and other common in-store opportunities can occasionally be somewhat lucrative (e.g. if you’re on commission at Tiffany’s, or if you’re at a growing retailer that offers store employees equity in the company), the opportunities for a good career in retail are primarily in corporate and store-management areas.

Major Pluses •

Depending on your employer, in retail you’re often working with cutting-edge merchandise; it can be a lot of fun to know what products are going to be hot before the masses do.

•

The employee discount in retail can be substantial (up to 40 percent).

•

Many positions in retail involve travel. For instance, if you work in fashion design, you may find yourself on a plane to check out fashion events in Italy. And if you work in marketing or merchandising, you may find yourself needing to visit your company’s various stores to see that promotions and other aspects of store operations are going according to your vision, as well as competitors’ stores to see what they’re up to.

Major Minuses

2

•

The pay can be low, especially in store positions like stock clerk and sales associate, but even in corporate positions, you may be paid less than folks in similar careers and career stages in other industries.

•

It only looks glamorous. Sure, you may work with hip products, but when you get down to it, the vast majority of jobs in retail are not at all hip in and of themselves, and most jobs require a lot of drudgery, paperwork, and attention to detail.

•

How excited can you really get about breakfast cereal or a line of detergents? If you need to feel like the products your company produces are critical to the future of civilization, this is the wrong business for you.

C AR E E R S I N R E TAI L AT A G L A N C E

Recruiting Overview •

Big retail companies recruit on campus for positions in merchandising, store management, and other corporate functions. MBA students will find retailers coming to campus to recruit for finance positions, and sometimes merchandising positions.

•

The best way in the door to a career in retail is doing an internship. Beyond that, leveraging your network to get in touch with company insiders is also helpful.

•

To learn more about the recruiting process for the career you’re interested in at the company or companies you’re interested in working for, check the companies’ websites, contact their recruiters directly, and, if you’re a student, check with your campus career center to see if the company recruits at your campus and whether the career center can put you in touch with alums of your school who are working for the company.

What Recruiters Want •

The specific, formal requirements of retail candidates vary depending on the company, the career function, and the career stage. IT candidates, for example, will often have to be certified in one or more of the specific technologies they’ll use if they’re hired. Finance and accounting types will need to show their facility with numbers and understanding of how the numbers demonstrate how a business is faring (in other words, they’ll need finance/accounting experience and/or education).

•

You should know everything you can about the companies you interview with: how the company’s performed of late, the challenges facing it, how it compares to competitors, its strategy moving forward, and so on. Read about the company on its website, in its annual report, in the business press. Visit its stores, and think about what’s working, and what isn’t, in terms of how the stores present merchandise or help customers.

•

If you can show a potential employer that you’ve got experience dealing with the pressures caused by change—if you can show you’re not wed to one way of doing or thinking about things, and aren’t bothered by changing horses in midstream, if that’s the smart move—you’ll impress retail interviewers.

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The Industry Overview Industry Breakdown Industry Rankings Industry Trends Picking and Choosing

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Overview Did you ever stop to think about how big a role the retail industry plays in people’s daily lives? No? Well, then, ask yourself the following questions: Did you buy a cup of coffee or a latte this morning? Have you purchased groceries lately? Are you thinking about shopping for a new pair of shoes, or that new CD by that band that was on TRL recently, or some other product any time soon? Chances are, you spend money in at least one retail establishment every day. If you’re in an urban or suburban area, you’re probably surrounded by retail establishments. Indeed, these days, Americans are more likely to interact with other members of their community in a Safeway, WalMart, or Home Depot than in a town square. Retail—the selling of products to individual consumers (as opposed to selling to businesses)—is big business. Retailers employ about 15 million people in the United States alone—which translates to nearly 12 percent of all jobs in the United States. And total annual U.S. retail revenues are approaching $4 trillion. Wal-Mart, which employs a million and a half people (more than a million of them in the United States), is the 800-pound gorilla of the industry, but in total there are more than a million retail businesses in the United States—everything from high-end boutiques, jewelry stores, and electronics superstores to supermarkets, mail-order companies, and tiny independent bookstores. The retail landscape has seen drastic changes in the last decade or two. In the old days, retail was dominated by small local mom-and-pop stores (like the tiny neighborhood record store and the corner market), shopping malls, and the traditional department stores (like Mervyn’s and Macy’s) that acted as those malls’ anchors. There are still plenty of mom-and-pop stores, malls, and department stores around today, but they’re dominated in the retail landscape by mass merchandisers (e.g., Wal-Mart and Target), discount clubs (e.g., Costco and Sam’s Club), “category killers” (e.g., Home Depot,

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Barnes & Noble, and Staples), and specialty and online retailers (e.g., Coach, Amazon. com, and J. Crew). Technology has played a central role in this shift in the retail landscape. In the form of supply chain and logistics software, technology has allowed retailers and vendors to better coordinate their efforts, lowering costs (e.g., the cost of transporting merchandise, since supply chain and logistics software allows retailers to more intelligently schedule shipping, as well as inventory costs, since the same software makes retailers better able to predict and stock needed for inventory levels) and raising profit margins in the process. And then there’s the Internet, which, in addition to creating a new retail channel in the form of e-commerce sites, has changed the way consumers behave. The Internet has made consumers smarter, by allowing them never-beforeavailable access to all kinds of information about products, on manufacturers’ websites, in online chat rooms, and on product-review websites, and by allowing them to find out the lowest available price on a given product almost instantly. The result: Consumers today are more demanding than they’ve ever been, and retailers are always looking for new ways to offer personalized, customized products and services to them in order to differentiate themselves from competitors. The other big reason for the shift in the retail landscape is the sheer size of today’s retailers. Wal-Mart, for instance, has a million and a half employees, and earned sales revenue in excess of $285 billion in fiscal 2005. (That’s approaching a third of a trillion dollars, folks.) Bigger retailers have bigger economies of scale than their competitors. Their costs are lower than the competition’s. They pay less than the competition does for merchandise and things like transportation costs. As a result, they can offer lower prices for the same products. This forces competitors to lower their prices, even though thanks to their higher costs they don’t enjoy the same profit margins; a giant retailer like Wal-Mart can set prices so low that many smaller competitors are driven out of business. It’s no wonder that the “big boxes” (i.e., the mega-store retailers, such as Wal-Mart, Target, Best Buy, Home Depot, and Staples) have assumed the starring role in the retail industry story.

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The industry is currently in the midst of an intense period of consolidation. In recent years, there’s been a series of mergers and acquisitions of industry players. Some have involved struggling retailers joining forces in an effort to remain competitive, such as the 2005 merger of Sears and Kmart. Others have involved successful retailers swallowing less-successful retailers, such as Federated Department Stores’ acquisition of The May Department Stores in 2005. (Federated operates the Macy’s and Bloomingdale’s chains.) For many in the industry, this has meant pink slips, as newly merged companies eliminate “redundant” positions. Still, this is a huge industry; there’s no shortage of career opportunities in retail.

THE BOTTOM LINE Retail may be omnipresent in our lives, but most people don’t ever give the industry more than a cursory thought when it comes to choosing a career. And most of us also don’t think much past “sales clerk” when thinking about the career opportunities offered by the retail industry. But there are plenty of opportunities here for those with more of a head for business than a head for fashion, or electronics, or sporting goods, or whatever else the company you go to work for might sell. Indeed, this Insider Guide focuses on nonsales jobs in the retail industry. Although it’s true that most retail industry employees are salespeople and clerks, retail also has opportunities for people interested in determining what goods will be sold, getting these goods to the right place at the right time, and managing the operations, finances, and administration of retail companies. Retail executive-training programs are crammed with energetic 20-somethings, all hoping to perform those functions as sales and merchandise managers, buyers, and marketers at major retail organizations, such as Ann Taylor, Macy’s, J.C. Penney, and the Gap.

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Industry Breakdown Retail encompasses a wide range of consumer goods—everything from apparel, furniture, and hardware to groceries, sporting goods, toys, and electronics—in a variety of retail formats. There are too many different kinds of retailers to describe them all here, but the following is an attempt to break down the basic types of retail establishments in the marketplace.

DEPARTMENT STORES A few years ago, names like Sears, J.C. Penney, Macy’s, and Montgomery Ward dominated malls and downtowns all over America. Over the last decade or so, however, department stores have suffered. In part, this is a result of changing shopping patterns and increased competition from discount stores. It has also come from financial burdens incurred by companies that acquired competitors and grew too fast. It’s unlikely that these players will disappear from the market. However, expect more bumps as the strong get stronger and the weak get absorbed.

DISCOUNT STORES These are giants such as Wal-Mart, Target, and Kmart, as well as membership warehouses such as Costco. These, along with the category killers, have changed the landscape of both the retail industry and the American landscape. Where once momand-pop and department stores dominated retail, the discount retailers and category killers are now at the top of the heap. And where once shopping malls, anchored by at least one major department store, used to be the dominant retail presence lining the nation’s roads, now it’s the behemoth Wal-Marts and Targets.

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CATEGORY KILLERS These are the giant retailers that dominate one area of merchandise (e.g., Home Depot, Staples, Best Buy)—in effect, they’re oversized specialty stores. They are able to buy bathroom tiles, file cabinets, electronic goods, or pet food in such huge volumes that they can then sell them at prices even fairly large competitors can’t match. For most job seekers, these companies offer earn-and-learn experiences with vendors and distributors before you move onward and upward.

SPECIALTY STORES These include Crate & Barrel, the Body Shop, and Victoria’s Secret. These stores concentrate on one type of merchandise and offer it in some manner that makes it special. Some are very high-end (Louis Vuitton, Tiffany); others cater to the price-conscious masses (Old Navy). Many are so successful that department stores have started to emulate their buying, marketing, and merchandise display strategies. Industry experts predict growth in this segment, particularly for home furnishings and home improvement, and it seems to attract many of the best and brightest in retail. Promotion and responsibility come quickly to those willing to work hard, and in many of these stores the hand of bureaucracy is not heavy.

E-TAILERS While most retailers have online storefronts, strictly online purveyors with no brickand-mortar counterparts are hoping to snare a percentage of the retail profit. And major players, such as Amazon.com, have generated enough business to cause top brick-and-mortar competitors to follow up with their own Internet sites. Traditional retailers such as Wal-Mart and Starbucks, hugely successful in their own right, have also set up online stores so as not to miss out on the revenue opportunities that the Internet offers.

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Industry Rankings This list includes information on the various retail formats companies operate—on whether a given retailer operates drug stores, supermarkets, hypermarkets (which combine supermarkets with discount stores), discount stores, superstores, warehouse locations, specialty stores, department stores, DIY stores (which, à la Home Depot, offer products and services for home-improvement “do-it-yourselfers”), convenience stores, mail-order operations, e-commerce operations, or one of a number of other retail-format classifications—or some combination thereof.

Top 100 U.S. Retail Companies 1-Year Growth Employees Rate (%)

Company

Category

Headquarters

2004 Revenue ($M)

Wal-Marta

Discount, warehouse

Bentonville, AL

285,222

11

1,700,000

Home Depota

Home improvement

Atlanta

73,094

13

325,000

Grocery

Cincinnati

56,434

5

289,000

Kroger

a

Target Corp.

a

Costco Wholesale Albertson’s

a

Discount

Minneapolis

46,839

–3

292,000

Warehouse

Issaquah, WA

48,107

13

113,000

Grocery

Boise

39,897

–1

241,000

Walgreen

Drug

Deerfield, IL

37,508

15

163,000

Lowe’s

DIY

Mooresville, NC

36,464

18

162,000

Sears

Department

Hoffman Estates, IL

36,099

–12

247,000

Safeway

Grocery

Pleasanton, CA

35,823

1

191,000

Drug

Woonsocket, RI

30,594

15

145,500

CVS Corp. b

Grocery

Quincy, MA

26,900

–10

170,000

Best Buy

Electronics

Richfield, MN

24,547

17

100,000

Kmarta

Discount

Troy, MI

19,701

–15

133,000

SUPERVALU

Grocery

Eden Prairie, MN

19,543

–3

56,000

Ahold USA

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Top 100 U.S. Retail Companies (cont’d) Category

Headquarters

2004 Revenue ($M)

Publix Super Markets

Grocery

Lakeland, FL

18,686

10

128,000

J.C. Penneya

Department

Plano, TX

18,424

4

151,000

Rite Aida

Drug

Camp Hill, PA

16,816

1

71,200

Gap

a

Apparel

San Francisco

16,267

3

152,000

Delhaize Americaa Grocery

Salisbury, NC

15,840

2

105,395

Federated Department Storesa

Department

Cincinnati

15,630

2

112,000

TJX Companiesa

Discount

Framingham, MA

14,914

12

113,000

Office products

Framingham, MA

14,448

10

65,078

May Department Storesa

Department

St. Louis

14,441

8

132,000

Office Depot

Office products

Delray Beach, FL

13,565

10

47,000

OfficeMax

Office products

Itasca, IL

13,270

61

41,000

Staples

a

7-Eleven

Convenience

Dallas

12,121

12

31,500

Meijer

Grocery

Grand Rapids, MI

11,900

9

75,000

Kohl’sa

Department

Menomonee Falls, WI

11,701

14

95,000

Toys “R” Us

Toys and games

Wayne, NJ

11,566

2

113,000

A&P

Grocery

Montvale, NJ

10,813

0

74,000

Winn Dixie

Grocery

Jacksonville

10,633

–13

89,000

H-E-B

Grocery

San Antonio

10,500

–2

60,000

Circuit City

Electronics

Richmond, VA

10,472a

8

42,258

Apparel

Columbus

9,408

5

115,300

CCA Global Partnersb

Floor coverings

Earth City, MO

8,000

33

350

Dollar General Corp.a

Discount

Goodlettsville, TN

7,661

12

63,200

Dillard’sa

Department

Little Rock

7,529

–1

53,035

BJ’s Wholesale Cluba

Warehouse

Natick, MA

7,375

10

19,600

Limited Brands

12

1-Year Growth Employees Rate (%)

Company

a

C AR E E R S I N R E TAI L THE INDUSTRY

2004 Revenue ($M)

1-Year Growth Employees Rate (%)

Company

Category

Headquarters

Nordstroma

Department

Seattle

7,131

10

53,500

Amazon.com

E-tailer

Seattle

6,921

32

9,000

a

6,437

6

52,000

Saks

Department

Birmingham, AL

Sherwin-Williams

Paint

Cleveland

6,114

13

28,690

Blockbuster

Entertainment

Dallas

6,053

4

84,300

Menard

Home improvement

Eau Claire, WI

6,000

7

27,000

AutoZone

Auto parts

Memphis

5,637

3

49,000

Foot Lockera

Footwear

New York

5,355

12

44,109

Family Dollar Stores

Discount

Charlotte, NC

5,282

11

39,000

Bed Bath & Beyonda

Housewares

Union, NJ

5,148

15

29,000

Giant Eagle

Grocery

Pittsburgh

5,100

8

28,000

TV shopping

West Chester, PA

4,900

12

11,000

QVC

b a

Books

New York

4,874

–18

42,000

RadioShack

Electronics

Fort Worth

4,841

4

42,000

Roundy’s

Grocery

Milwaukee, WI

4,777

9

21,855

CompUSAb

Computers and software

Dallas

4,700

18

n/a

Longs Drug Storesa

Drug

Walnut Creek, CA

4,608

2

22,000

Shaw’s Supermarkets

Grocery

West Bridgewater, MA

4,600

2

30,682

Hy-Vee

Grocery

West Des Moines, IA

4,500

6

46,000

Discount

Columbus

4,375

5

46,241

Barnes & Noble

Big Lotsa a

Discount

Pleasanton, CA

4,240

8

30,100

Pathmark Storesa

Grocery

Carteret, NJ

3,979

0

25,000

Bordersa

Books

Ann Arbor

3,903

5

32,700

Whole Foods Markets

Grocery

Austin

3,865

23

32,100

Advance Auto Parts

Auto parts

Roanoke, VA

3,770

8

37,795

Ross Stores

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Top 100 U.S. Retail Companies (cont’d) Company

Category

Headquarters

Associated Wholesale Grocersb

Grocery

Kansas City, KS

1-Year Growth Employees Rate (%)

3,721

9

6,171

Stater Bros.

Grocery

Colton, CA

3,705

35

15,700

Wegman’s

Grocery

Rochester, NY

3,600

9

32,000

Neiman Marcus Group

Department

Dallas

3,546

14

15,700

The Pantry

Convenience

Sanford, NC

3,493

26

9,751

84 Lumber

Home improvement

Eighty Four, PA

3,460

36

8,000

Michaels Storesa

Hobby and craft

Irving, TX

3,393

10

41,100

PETsMARTa

Specialty

Phoenix

3,364

12

30,300

b

Grocery

W. Sacramento, CA

3,200

0

16,200

ShopKo Storesa

Discount

Green Bay, WI

3,180

–1

22,800

WilliamsSonomaa

Housewares

San Francisco

3,137

14

36,000

Dollar Tree Storesa

Discount

Chesapeake, VA

3,126

12

30,155

Burlington Coat Factory

Apparel

Burlington, NJ

2,846

6

24,000

Stock Building Supplyb

Home improvement

Raleigh, NC

2,768

–5

9,043

Retail Venturesa

Discount

Columbus

2,740

6

18,000

Linens ’n Things

Housewares

Clifton, NJ

2,662

11

18,300

PayLess ShoeSourcea

Footwear

Topeka, KS

2,657

–5

27,000

BerkshireHathaway Retail

Specialty

Omaha

2,601

n/a

n/a

Trader Joe’sb

Grocery

Monrovia, CA

2,500

14

n/a

Department

Charlotte

2,447

8

17,900

Luxottica Retail

Eyewear

Mason, OH

2,435

0

n/a

Harris Teeterb

Grocery

Matthews, NC

2,432

4

14,500

Raley’s

Belk

a b

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2004 Revenue ($M)

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2004 Revenue ($M)

1-Year Growth Employees Rate (%)

Company

Category

Headquarters

Casey’s General Stores

Convenience

Ankeny, IA

2,368

10

14,574

Charming Shoppesa

Apparel

Bensalem, PA

2,332

2

27,000

Jewelry

Irving, TX

2,304

4

17,000

Specialty

Philadelphia

2,273

7

20,781

Medicine Shoppe Internationalb

Drug

St. Louis

2,240

4

350

Home Shopping Networkb

TV shopping

St. Petersburg, FL

2,230

16

n/a

Jewelry

New York

2,205

10

7,341

Grocery

St. Louis

2,200

4

16,500

Save Mart Supermarkets

Grocery

Modesto, CA

2,194

33

9,417

Ingles Markets

Grocery

Black Mountain, NC

2,137

7

14,700

Grocery

Sunbury, PA

2,098

3

18,700

Drug

Warwick, RI

1,933

45

8,075

Zale Corp. The Pep Boys

a

Tiffany & Co.a Schnuck Markets

b

Weis Markets Brooks Pharmacy

b

Pier 1 Imports

Home furnishings

Fort Worth

1,868

7

17,600

Footstarb

Footwear

Mahwah, NJ

1,016

–56

14,087

a

2005 numbers. b2003 numbers. Sources: Stores Magazine, 7/04; Hoover’s; WetFeet analysis.

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Industry Trends WAL-MART Wal-Mart continues to grow and grow. It’s the biggest retailer around, by far, and leads the market in retail category after retail category. Because of its immense size, Wal-Mart has economies of scale that other retailers can’t match. Also because of its size, Wal-Mart has bargaining power that other retailers can’t match—meaning it can get the products that line its stores’ shelves more cheaply than competitors can. These factors allow Wal-Mart to offer prices too low for competitors to match. Wal-Mart has almost single-handedly altered the face of the retail industry. It’s created a growing gap between higher-end retailers, which charge higher prices for fancier goods with the understanding that they’ll reach only a limited market, and mass-market retailers, which have had to slash prices and in many cases completely change the way they do business in an effort to keep up with Wal-Mart. Wal-Mart’s business model is incredibly effective. Indeed, in 2004 the company had revenue of $256 billion, more than four times the revenue of Home Depot, the retailer with the next-largest revenue that year. But more and more individuals and organizations are starting to say that the company’s growth comes with major costs—to workers, to communities, and to governments. The company is facing serious accusations about its employment of illegal aliens. It’s been called to task for paying extraordinarily low wages—only 38 percent of full-time employees are able to afford to purchase a Wal-Mart health insurance plan. The U.S. Equal Employment Opportunity Commission has filed more disability discrimination lawsuits against Wal-Mart than any other corporation. It is the target of the largest class-action suit for sexual discrimination ever filed against a private employer. It has

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been scolded by industry observers for fighting unionization of employees tooth and nail (most recently, the company decided not to open a planned store in Canada rather than deal with unionization efforts), even while it’s allowing unionization of employees in China in order to gain a foothold in that country. It has been accused by many of radically changing the communities it enters, by pushing smaller retailers that have deep ties to the community out of business and by putting downward pressure on wages in the community. Already loud, the outcry against Wal-Mart is getting louder.

ALL TOGETHER, NOW! Wal-Mart’s economies of scale have resulted in remarkably low costs of operation. In order to try to keep up, and have the ability to offer lower prices and still make a profit, all kinds of retailers are looking to merge with or acquire other retailers, with the thinking that, these days, bigger is indeed better. Recent years have brought us retail M&A activity including CVS’s acquisition of Eckerd, the merger of The Sports Authority and Gart Sports, May Department Stores’ purchase of Marshall Fields, the acquisition of Barney’s by Jones Apparel, the acquisition of Shaw’s and Star Markets by Albertson’s, the merger of Sears and Kmart, and the acquisition of May Department Stores by Federated Department Stores. Look for this trend to continue—and, when deciding which retail job you should take, consider for a moment how likely it would be that the job you’re interested in might be eliminated in the case of a merger or acquisition.

DOWNWARD PRESSURE ON COMPENSATION LEVELS Here’s another result of Wal-Mart’s success. Keeping labor costs low is one of the central strategies of Wal-Mart’s business model, which means the company isn’t afraid to play hardball when it comes to negotiating with labor. This is a company that would rather close a store than allow the workers at that store to unionize. This means that, in locations where Wal-Mart operates, competing retailers are pressured to lower their

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own labor costs to compete with Wal-Mart on price without going out of business. In 2004, this effect was exemplified in Southern California, where supermarkets, facing the threat of competition from Wal-Mart, refused to meet unionized labor’s newcontract demands. A bitter, 4½-month strike resulted. In the end, workers won higher compensation, but the supermarkets won the right to provide new workers with significantly lower compensation.

SHRINKING MARGINS, HEALTHY MARGINS Wal-Mart and the other big-box stores (e.g., Target, Home Depot, Staples, Best Buy) have put intense downward pressure on mass merchandise and supermarket groceries. At the same time, consumer spending has been curtailed recently by higher prices at the gas pump, growing consumer debt levels, and a job market that continues to have the blahs. The result has been low profit margins for almost all mass-market retailers. In 2004, Limited Brands, Kroger, Wal-Mart, and Federated Department Stores (which owns Macy’s and Bloomingdale’s, among others) all had profit margins of less than 6 percent—while retailers such as Sears, Kmart, and J.C. Penney lost money. Retailers that sell luxury goods, meanwhile, may not have as large a target market as the Wal-Marts and Kmarts of the world, but they do have target markets that are less sensitive to price. Because they don’t face the downward price pressures that massmarket retailers do, high-end retailers these days typically enjoy higher profit margins than their mass-market peers. For instance, in 2004, Neiman Marcus, Tiffany, Bulgari, Williams-Sonoma, and Ann Taylor all had profit margins in excess of 15 percent.

BETTER DATA COLLECTION AND ANALYSIS One big technology trend in retail is the increasing collection and use of information about customers to better predict consumer demand patterns, market to consumers more effectively, take a more scientific approach to product pricing, and optimize supply chain efficiencies. IT departments at retailers are dealing with an increasing

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variety of technologies designed to help their employers better collect information from customers and better understand what the collected information means in terms of actions those retailers should take to increase profits. For example, consider product pricing software. This relatively new type of software analyzes retailers’ information about their customers to determine how products should be priced to move quickly off the shelves while making retailers the most possible money.

RFID TECHNOLOGY The use of radio frequency identification (RFID) technology among retailers is increasing. RFID chips emit radio signals: When attached to products, they allow retailers to track inventory with a precision never before possible, creating more efficient supply chains and more effective inventory management. In the past, retailers always seemed to order products from vendors in quantities too large or too small, and they could never be quite sure when they would run out of a given product. Today, thanks to RFID, retailers are able to pinpoint inventory levels for given products and order products from vendors only when they’re really needed. Retailers eventually plan to use RFID technology to do things like transmit product information for consumers to view as they walk around a store and change the prices of products already on the shelves instantaneously. Wal-Mart has already made a big investment in RFID technology and has forced vendors on its supply chain, including big consumer products manufacturers, to use the technology on shipments to the giant retailer. It’s just a matter of time before everybody else in retail is using it, too. If you’re an IT type, or a supply chain management or logistics professional, it might be a good idea to get up to speed on this technology to improve your career prospects.

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SELF-SERVICE The bigger retailers are starting to include self-serve checkout lanes in their stores. Consumers who aren’t afraid of technology—an increasing percentage of the population, these days—like these self-serve lanes because they usually have shorter lines than lanes with register clerks. Register clerks may think they like self-serve lanes, too, because they mean fewer customers to have to deal with, but they’re probably going to change their minds when self-serve lanes start resulting in fewer full-serve lanes—and fewer jobs for cashiers.

Picking and Choosing There are a number of things to consider when deciding whether a specific retail job or company is right for you. Consider the factors here when determining how you want to target your retail job search.

LOCATION Location can be a key issue when it comes to deciding which retail positions to pursue. If you’re not a city person, for instance, you may not want to take a corporate job at a company like Gap, which has corporate offices in San Francisco and New York. If you find the Midwest boring, you might not be excited about corporate jobs at Target’s headquarters in Minnesota. If you feel out of place in the South, corporate jobs at companies like Wal-Mart and AutoZone may not be for you . . . and so on.

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MARKETS SERVED Different retailers serve different markets. If you find value in providing customers of low and medium income levels with quality merchandise at affordable prices, there are going to be a lot of options for you in the industry—at retail outfits as varied as WalMart and your town’s local dollar store. On the other hand, if you insist on dealing only with luxury items, or if you have a penchant for helping high-end customers solve problems, you may be smart to concentrate your job search on luxury-item retailers such as Tiffany and Neiman Marcus.

PRODUCTS SOLD This one’s a no-brainer. If you’re a died-in-the-wool fashionista, you’re going to be happier working for Bloomingdale’s than for Old Navy. If athletics is your thing, the Sports Authority is going to be a better home for you than Victoria’s Secret. If you’re handy with a hammer but have never used a shoehorn in your life, walk right past the Florsheim’s store on your way to submitting your job application at Home Depot. You get the idea.

SIZE Do you want a broad retail work experience? Want the opportunity to wear a variety of hats in your job, handling everything from buying to pricing to visual merchandising and marketing? Do you thrive on the sink-or-swim, learn-on-the-job model of job training? Then you want to work for a smaller employer, such as an independent local store or shop. If you want more rigorous training and a greater depth of experience in a specific area of retail, though—not to mention industry connections and a name on your resume that is going to open doors in the industry for you down the road—you’ll probably want to go to work for a bigger company.

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FUNCTIONAL AREA OF INTEREST Depending on the functional area within retail that interests you, you may also want to consider whether your target employers offer private-label merchandise. If you are seeking work in store operations or in many corporate areas, such as marketing, finance, or HR, the answer to this question will have no bearing on your decisionmaking process. But if you want to work in product design, development, or production, and you want to work in retail, you’re going to have to find a retailer that designs and produces at least some of the merchandise stocked on its shelves. Which will probably mean you end up at a company that designs and produces a lot of its own merchandise, such as Gap (or its subsidiaries Banana Republic and Old Navy), Target, or Limited Brands.

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C AR E E R S I N R E TAI L

The Companies

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ALBERTSON’S, INC. 250 E. Parkcenter Boulevard Boise, ID 83706 Phone (toll-free): 888-932-7948 Phone: 208-395-6200 Fax: 208-395-6349 www.albertsons.com Ticker symbol: ABS

Overview Albertson’s sits at number two (behind Kroger) in the rankings of U.S. supermarket chains. The company operates more than 2,500 stores in 37 states (1,557 combination food and drug stores, 707 stand-alone drug stores, and 247 conventional supermarkets and warehouses)—as well as 228 fuel centers in 22 states, located near existing stores—under the banners Albertsons, Albertsons Express, Sav-on, Jewel, Jewel-Osco, Acme, Sav-on Drugs, Osco Drug, Max Foods, Super Saver Foods, Shaw’s, and Star Markets. The company’s 2004 acquisition of JS USA Holdings, which operated 204 Shaw’s and Star Markets stores in New England, gives it a major presence in that region. Headquartered in Boise, Idaho, the company was founded in 1939 by Joe Albertson. He was one of the first to provide products never before seen in the grocery business such as magazines, homemade ice cream, and a scratch bakery. This concept evolved into the one-stop shopping center, revolutionizing the industry. Today’s Albertsons stores provide everything from full-service pharmacies, video rentals, and in-store banks to coffee bars, floral products, and dry cleaning. The company has 17 distribution centers supporting its retail locations.

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The company is expanding into the online world. Albertsons.com offers customers the option of placing orders online and getting those orders delivered either to their door or to a neighborhood store in and around San Diego, Los Angeles, San Francisco, San Jose, and Oakland, California; Boise, Idaho; Las Vegas; Portland, Oregon; Dallas/ Fort Worth; and Seattle and Vancouver, Washington. And Savon.com, the company’s online drug store, offers nationwide pharmacy services.

Recent Milestones 2004

Announces that it’s acquiring JS USA Holdings, which owns the Shaw’s and Star Markets supermarkets, for approximately $2.475 billion. Launches RFID technology implementation program to optimize operations. Announces reorganization, including senior leadership changes and the introduction of a company-wide Six Sigma Quality program. Launches “Blue Ribbon” private-label beef brand.

2003

Signs agreement with Toys “R” Us to have that company become exclusive provider of toys to Albertsons food and drug stores. Introduces Office Depot “store within a store” concept in 18 Albertsons stores.

2002

Completes transfer of 80 New England Osco Drug stores to Brooks Pharmacy. Launches online grocery shopping and delivery in California and Oregon.

Key Financial Stats 2005 revenue: $39,897 million 1-year change: 13 percent

Personnel Highlights Number of employees: 241,000 1-year change: 14 percent

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BEST BUY CO., INC. 7601 Penn Avenue South Richfield, MN 55423 Phone: 612-291-1000 Fax: 612-292-4001 www.bestbuy.com Ticker symbol: BBY

Overview Best Buy Co. is the number-one specialty retailer of consumer electronics, home office products, software, and household appliances in the nation, even though its chief rival, Circuit City, has many more stores. Best Buy offers a wide variety of services for its customers, including delivery and installation of major appliances and electronic products, financing, repairs, and in-store upgrades. CEO and founder Richard M. Schulze established the business in Eden Prairie, Minnesota, in 1966 and introduced the concept of providing consumer electronics in a warehouse-like store format. The company operates 608 Best Buy stores across the United States, 19 Canadian Best Buy stores in Alberta, Ontario, and Manitoba, 108 Future Shop stores across Canada, and 22 Magnolia Audio Video stores in California, Oregon, and Washington. The company’s Geek Squad residential and commercial computer support services subsidiary has a presence in seven markets and has in-store technicians in more than 20 U.S. Best Buy stores. Best Buy recently announced a major change in its retail strategy. The company had long focused on pricing as a key Best Buy differentiating factor. But it found that it was attracting too many low-value shoppers (read: bargain shoppers who don’t make purchases unless they’re getting a significant deal) to its stores as a result. Today it has shifted its strategy to try to attract high-value customers: repeat customers who are not terribly price-conscious.

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In early 2001, the company acquired The Musicland Group (Sam Goody, Suncoast, On Cue, and Media Play stores). Later that year, it added Canada’s top consumer electronics retailer, Future Shop, as a subsidiary. In 2003, the company sold off 110 unprofitable Musicland stores and laid off 700 employees. On June 16, 2003, Best Buy sold its interest in The Musicland Group to an affiliate of Sun Capital Partners.

Recent Milestones 2005

Experimenting with selling salon and pharmacy products and services—currently, only in St. Paul, Minnesota. Announces plans to open 73 new stores in the United States and Canada in fiscal 2006, which starts on February 27, 2005.

2004

Starts implementing new strategy to focus more on higher-value customers and less on competing on price.

2003

Teams with Hastings Entertainment, Trans World Entertainment, Tower Records, Virgin Entertainment, and Wherehouse Entertainment to form Echo, an online music retailing operation. Sells Musicland subsidiary and its some 1,100 stores (including Sam Goody music stores and Suncoast video stores).

2002

Acquires Future Shop, an electronics retailer with more than 100 stores across Canada, and Geek Squad, a computer support company.

Key Financial Stats 2004 revenue: $24,547 million 1-year change: 17 percent

Personnel Highlights Number of employees: 100,000 1-year change: 2 percent

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CIRCUIT CITY STORES, INC. 9950 Mayland Drive Richmond, VA 23233 Phone: 804-527-4000 Fax: 804-527-4164 www.circuitcity.com Ticker symbol: CC

Overview Circuit City, which was incorporated in 1949, ranks behind Best Buy as the numbertwo consumer electronics retailer in the United States. As of the end of February 2005, the company operated 612 superstores and five mall-based stores in the United States and about 1,000 stores in Canada. It also sells products through its website, including televisions, VCRs, DVD players, camcorders, personal computers and peripherals, music, games, and videos. Circuit City’s major suppliers include Apex Digital, Canon, eMachines, Hitachi America, Hewlett-Packard, Panasonic, Samsung, Sony, Thomson Multimedia, and Toshiba. It also began launching its own private-label brands, including esa, Verge, and Liquid Video, in 2004. Circuit City has been losing the consumer electronics retail war with Best Buy and has been looking for ways to cut costs and increase margins. The company has decided to exit the appliances market and has been refurbishing existing stores as a result. It has also closed underperforming stores and support locations, and sold property to raise money. In 2004, Circuit City acquired MusicNow, a digital music platform. Circuit City is integrating MusicNow’s platform into its website and stores, but MusicNow is retaining its own brand and continuing to conduct its business of helping third parties launch music download and subscription services.

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Circuit City also offers repair services through five regional service facilities; merchandise to be repaired is shipped from stores to these facilities, and repaired merchandise is returned to stores for customer pickup or in some circumstances shipped directly to customers.

Recent Milestones 2005

Highfields Capital Management offers to acquire Circuit City for more than $3 billion. Ends Amazon.com partnership that made Circuit City merchandise available on the Amazon.com site. Closes 19 superstores, five regional offices, and one distribution center. Also sells one of the buildings on its corporate headquarters campus.

2004

Acquires InterTAN, a Canadian electronics retail outfit, and MusicNow, an online music company. Divests Circuit City branded credit cards business. Launches redesigned CircuitCity.com website.

2003

Launches program to cut number of sales staff in stores by about 2,000 in total. Launches initiative to modernize stores.

2002

Sells used-car dealer subsidiary CarMax.

Key Financial Stats 2005 revenue: $10,472 million 1-year change: 8 percent

Personnel Highlights Number of employees, 2004: 42,258 1-year change: 7 percent

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COSTCO WHOLESALE CORPORATION 999 Lake Drive Issaquah, WA 98027 Phone: 425-313-8100 Fax: 425-313-8103 www.costco.com Ticker symbol: COST

Overview Costco Wholesale Corporation (formerly Costco Companies) is the top wholesale club in the nation. Originally a family business based in Issaquah, Washington, Costco now has about 20 million members and operates 417 warehouse stores—327 of them in the United States, 63 in Canada, 15 in the United Kingdom, and 12 in Asia. Costco also runs 24 stores in Mexico through its joint venture with Controladora Comercial Mexicana. The average Costco warehouse store is about 139,000 square feet and offers discounted items including food, liquor, clothing, pharmaceuticals, appliances, jewelry, and electronics. By doing things like buying from manufacturers rather than from distributors and having merchandise shipped directly to its warehouse stores instead of to distribution centers whenever possible, Costco is able to pass significant saving along to its members. Costco warehouse stores are open to customers on a membership basis, which the company believes produces customer loyalty as well as substantial revenues in annual renewals. In addition to $45-per-annum individual and business memberships, the company offers an Executive membership level. For $100 per year, Executive members enjoy even greater product discounts and can take advantage of services including auto and home insurance, real estate services, mortgage services, business health care plans, credit card processing, and a line of credit.

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Costco has a reputation for being a pretty decent place to work—for offering good compensation and benefits packages, emphasizing promotion from within, and the likes.

Recent Milestones 2005

Plans to open 30 new warehouses in the United States and Canada, two in the United Kingdom, one in Japan, and one in Taiwan.

2004

Opens 20 new warehouses.

2003

Opens 29 new warehouses, but closes six others.

2002

Opens 29 new warehouses and first Costco Home store.

Key Financial Stats 2004 revenue: $48,107 million 1-year change: 13 percent

Personnel Highlights Number of employees: 113,000 1-year change: 10 percent

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CVS CORPORATION 1 CVS Drive Woonsocket, RI 02895 Phone (toll-free): 888-607-4287 Phone: 401-765-1500 Fax: 401-766-2917 www.cvs.com Ticker symbol: CVS With its 2004 acquisition of the Eckerd drugstore chain from J.C. Penney complete, CVS Corporation operates a whopping total of nearly 5,400 retail drugstores in 36 states and the District of Columbia. The company also offers pharmacy benefits management and specialty pharmacy services through its PharmaCare Management Services arm. The company has a Web presence via its online drugstore, CVS.com. The company traces its roots back to the opening of the first Consumer Value Store, in Lowell, Massachussetts, in 1963. The business expanded rapidly: By 1969, when the founders sold CVS to Melville Shoe, there were 40 Consumer Value Stores. By 1981, due to acquisitions and organic business growth, there were more than 400 CVS stores. In 1995, due to CVS’s continuing strong performance, Melville decided to focus on its pharmacy business; in the following several years, it sold off businesses operating in retail areas including apparel and footwear, discount department stores, toys, and furniture. The company is rapidly converting Eckerd stores to CVS stores, and plans to complete the conversion by the middle of 2005.

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Recent Milestones 2004

Acquires Eckerd from J.C. Penney, putting CVS in first place ahead of rival Walgreen in terms of number of retail locations. (Walgreen still has higher sales than CVS, though.) Opens stores in Minneapolis and ten stores in the Los Angeles region. Announces plan to build a new distribution center in Vero Beach, Florida, to be completed in 2006. Outsources data center operations to Perot Systems. Launches camera phone marketing alliance with Nokia.

2003

Opens 150 new stores.

2002

Acquires most of bankrupt rival Phar-Mor’s prescription lists. Opens 266 new stores. KB Toys becomes the exclusive provider of toys to CVS stores.

Key Financial Stats 2004 revenue: $30,594 million 1-year change: 15 percent

Personnel Highlights Number of employees: 145,500 1-year change: 32 percent

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DILLARD’S, INC. 1600 Cantrell Road Little Rock, AK 72201 Phone: 501-376-5200 Fax: 501-399-7831 www.dillards.com Ticker symbol: DDS Dillard’s is the second-ranked department store operator in the United States, after Federated Department Stores. The company was founded in 1938 by William Dillard, in Nashville, Arkansas. Ten years later, Dillard sold his Nashville store and used the proceeds to open a store in Texarkana. Dillard continued opening stores in the 1950s and 1960s, by acquiring existing stores. Even in the early days, the company’s strategy focused on offering quality merchandise, using advertising to drive business, and opening stores only in high-value locations. In 1969, Dillard’s went public. Today it operates some 340 stores in 29 states, a great number of them having been acquired from other retail companies. But recent years have been very challenging for Dillard’s. The changing retail landscape—especially the ability of the big-box stores to sell products with razor-thin margins—has forced this old-school department store to begin changing its ways. For example, Dillard’s now offers private-label products alongside the notable brand names it’s always sold, and has been forced to turn long-time policy on its head by using aggressive price discounting to move merchandise. As a result, the company has closed more stores than it’s opened in recent years, and has sold assets including its credit card business.

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Recent Milestones 2005

“Reba” sportswear line, created with entertainer Reba McIntyre, goes on sale in Dillard’s stores.

2004

Sells Dillard National Bank, the company’s credit card business, to GE Consumer Finance.

2003

Opens five new stores, but closes ten others. Sells its 50 percent interest in Flatiron Crossing, a mall in Colorado.

2002

Founder William Dillard dies, and his son William II becomes chairman. Opens four new stores, but closes nine others.

Key Financial Stats 2005 revenue: $7,529 million 1-year change: –1 percent

Personnel Highlights Number of employees: 53,035 1-year change: –1 percent

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FEDERATED DEPARTMENT STORES, INC. 7 West 7th Street Cincinnati, OH 45202 Phone (toll-free): 800-261-5385 Phone: 513-579-7000 Fax: 513-579-7555 www.federated-fds.com Ticker symbol: FD

Overview Federated, which was founded in 1929 and is headquartered in Cincinnati, is the biggest department store chain in the United States. It was already operating some 450 stores in 34 states, Guam, and Puerto Rico (under the Macy’s, Bloomingdale’s, and Macy’s Home Store banners) when, in 2005, it acquired its chief rival in the department stores space, May Department Stores, which had some 490 department stores of its own (under banners including Famous-Barr, Filene’s, Foley’s, Hecht’s, Kaufmann’s, Lord & Taylor, L.S. Ayres, Marshall Field’s, Meier & Frank, Robinsons-May, Strawbridge’s, and The Jones Store) and 239 David’s Bridal stores, 449 After Hours Formalwear stores, and 11 Priscilla of Boston stores. Combined, the two companies had revenue of about $30 billion in 2004. Federated expects the integration of the two companies to be complete by 2007 and to result in cost synergies of some $450 million. The transaction gives Federated a presence in 49 states in total, and 64 of the nation’s top 65 markets. Federated Department Stores was formed in 1929, when the owners of four major department stores—Lazarus in Columbus, Ohio; Abraham & Strauss in Brooklyn; Bloomingdale’s in Manhattan; and Filene’s in Boston—decided to merge their stores while maintaining the separate nameplates. Over the years, Federated has taken a host of other famous and some not-so-famous stores under its wings, including the venerable Macy’s.

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After several years of economic doldrums, increased pressure from online retailers, downward pressure from the likes of Wal-Mart, not to mention pressure from specialty retailers, Federated has been realigning its fleet of late. After closing its Fingerhut operations, limiting catalog operations, and closing handfuls of its department stores in the early part of the millennium, Federated embarked on a nation-wide rebranding effort. Beginning in February 2003, Federated began integrating its regional department stores (e.g., Burdines, Lazarus) with the Macy’s brand, to capitalize on the well-known Macy’s name. To spearhead this effort, Federated developed a new central marketing function—previously, each nameplate had its own marketing organization. (This rebranding effort was completed in March 2005; today, all of the company’s previously regional stores operate under the Macy’s nameplate.) Additionally, Federated has added convenience features to many of its stores, including enhanced fitting rooms, waiting lounges, improved in-store signage, price-check devices, upscale shopping carts, and the integration of plasma video screens in selected locations, and implemented more customer loyalty programs. Federated offers paid summer internships for college students interested in learning more about buying/merchandising, sales management, sales support, merchant and sales management, product/design, or store planning, architecture, construction, and engineering. The company recruits on campus at some 70 U.S. colleges and universities. You can learn more at the company’s recruiting website, www.retailology.com.

Recent Milestones 2005

Announces merger with The May Department Stores Company, which owns Lord & Taylor and Marshall Field’s. Completes conversion of all regional department stores to the Macy’s nameplate by March.

2004

Teams with Cosi to launch restaurants in some Macy’s stores. Creates the Macy’s Home Store division.

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Launches a new customer loyalty program, with better customers receiving better program benefits. Accused of antitrust violations by the New York State Attorney General; settles charges. 2003

Terry Lundgren becomes CEO.

Key Financial Stats 2005 revenue: $15,630 million 1-year change: 2 percent

Personnel Highlights Number of employees: 112,000 1-year change: 1 percent

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GAP INC. 2 Folsom Street San Francisco, CA 94105 Phone (toll-free): 800-333-7899 Phone: 650-952-4400 Fax: 415-427-2553 www.gap.com Ticker symbol: GPS

Overview Gap may have antiestablishment roots (it was founded in 1969 San Francisco, and its name comes from the term “generation gap”), but today it is the embodiment of a corporate retailing and manufacturing behemoth, with about 3,000 stores in the United States, Canada, Europe, and Japan, and annual revenue of nearly $16 billion. In the early days of the company, Gap stores were like other retailers in that they sold third-party brands—in this case, mostly Levi’s (another San Francisco native). Today, though, Gap stores sell only private-label merchandise. Gap’s in-house design staff designs all the merchandise that ends up on the shelves of its stores, but the company uses a network of some 800 vendors with operations in about 50 countries to manufacture those products. Ninety-five percent of Gap merchandise is manufactured outside the United States; 16 percent is manufactured in China. The company’s flagship brand is its original brand, Gap, which focuses on basic, simple, midmarket merchandise. There are about 1,750 Gap stores in the United States, Canada, the United Kingdom, France, and Japan. Gap has also entered the children’s apparel and women’s intimate apparel markets in recent years, via its GapKids (launched in 1986), babyGap (launched in 1989), and GapBody (launched in 1998) merchandise and stores.

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Banana Republic is the company’s higher-end entry in the retail marketplace. Banana Republic was acquired in 1983 and today operates some 435 stores in the United States and Canada. Old Navy merchandises value-priced apparel and accessories for the entire family and operates about 840 stores in the United States and Canada. The company’s current expansion strategy continues to focus on opening new stores in Europe and Asia. Gap also operates the online stores at Gap.com, BananaRepublic. com, and OldNavy.com.

Recent Milestones 2005

Announces plans to open a new line of stores, to be called Forth & Towne, aimed at women over 35. Plans to launch five test stores in 2005, one in New York City and four in Chicago. Launches 11 new GapBody stores for women across the United States; expects to open about 175 stores and close about 135 stores during the year.

2004

Announces plans to extend the Banana Republic brand to Japan. Launches new private-label credit card good at Gap, Banana Republic, and Old Navy. Banana Republic sponsors Project Runway, a fashion reality TV program. Names Deutsch LA as Old Navy advertising agency. Names Crispin Porter + Bogusky as new creative agency for Gap Men’s.

2003

Gap founder Donald Fisher steps down from chairmanship. Old Navy launches maternity line in stores. Byron Pollitt named CFO.

2002

Partners with Amazon.com to offer products through Amazon’s Apparel & Accessories Store. Paul Pressler named CEO. Forms separate U.S. and international divisions for Gap brands.

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Key Financial Stats 2005 revenue: $16,267 million 1-year change: 3 percent

Personnel Highlights Number of employees: 152,000 1-year change: –1 percent

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HOME DEPOT, INC. 2455 Paces Ferry Road, Northwest Atlanta, GA 30339 Phone (toll-free): 800-430-3376 Phone: 770-433-8211 Fax: 770-384-2356 www.homedepot.com Ticker symbol: HD

Overview Home Depot was founded in 1978 when two employees, Bernard Marcus and Arthur Blank, were fired from their jobs at Handy Dan Home Improvement Centers. Together with another Handy Dan employee, Ronald Brill, they formed a new homeimprovement business. Today, Home Depot is the largest home improvement retailer in the United States and the second-largest retailer overall, after Wal-Mart. It operates 1,707 Home Depot stores, 54 EXPO Design Center stores, 11 Home Depot Landscape Supply stores, five Home Depot Supply stores, and two Home Depot Floor stores in the United States, as well as 102 stores in Canada and 18 in Mexico. Home Depot stores primarily serve do-it-yourselfers, but also professionals. They average about 107,000 square feet of enclosed space and 22,000 square feet of outside garden-department space. In addition to selling merchandise, the stores offer Do-ItFor-Me (DIFM) installation services in areas such as carpeting, hard flooring, cabinets, water heaters, solid surface countertops, generators, and furnace and central air systems; DIFM customers select and purchase materials that are then installed by professionals, including independent contractors acting as partners to Home Depot. The company’s EXPO Design Center stores focus on customers in the market for home decorating and remodeling supplies and services, and offer products like kitchen and bathroom cabinetry, soft and hard flooring, appliances, window treatments, and

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lighting fixtures. Home Depot Supply stores and Home Depot Landscape Supply stores focus on the professional market. The company’s other subsidiaries include Apex Supply Company, which wholesales plumbing, HVAC, and other products; Home Depot Your “other” Warehouse, which distributes plumbing, lighting, and hardware products; Maintenance Warehouse/ America Corp., which serves apartment, hospitality, and lodging facilities management markets; and HD Builders Solutions Group, which serves professional homebuilders.

Recent Milestones 2005

Plans to open 175 stores in fiscal 2005, including about ten in Mexico, 20 in Canada, and its first store in China.

2004

Opens some 165 new stores in fiscal 2004, including its largest store, in Anaheim Hills, California. Opens two urban market–focused Manhattan stores. Acquires Home Mart, a Mexican chain; White Cap Construction Supply; Creative Touch Interiors, a floor and counter installer; and 18 stores from Kmart. Pays $5.5 million to settle discrimination claims in Colorado.

2003

Acquires Installed Products USA, a roofer, and RMA Home Services, which installs windows and siding.

2002

Opens first small store, in New York City. Creates HD Builder Solutions subsidiary out of acquisitions Arvada Hardwood Floor Company, Floors, Inc., and FloorWorks.

Key Financial Stats 2005 revenue: $73,094 million 1-year change: 13 percent

Personnel Highlights Number of employees: 325,000 1-year change: 9 percent

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J. C. PENNEY CORPORATION, INC. 6501 Legacy Drive Plano, TX 75024 Phone: 972-431-1000 Fax: 972-431-1362 www.jcpenney.net Ticker symbol: JCP

Overview J. C. Penney is one of America’s largest department stores and drug store retailers; the company operates 1,021 J. C. Penney department stores throughout the United States and Puerto Rico and 59 Renner department stores in Brazil. The company also sells merchandise via its catalog business and its e-commerce website. J. C. Penney traces its roots back to 1902, when James Cash Penney opened a Wyoming dry goods store with two partners whom he later bought out. By the 1920s, the corporation operated some 1,400 stores from coast to coast. Even during the depression, thanks to its stores’ low prices and quality merchandise, J. C. Penney continued to grow, and by the 1950s it was making more than a billion dollars a year. During the 1970s, J. C. Penney replaced its smaller stores with larger, full-line department stores that acted as anchors in malls and targeted the suburban consumer population. In the 1980s, J. C. Penney refocused on higher-taste-level apparel and soft home furnishings and spent millions to modernize its stores. In recent years, the retail chain has struggled financially. It downsized in response, closing stores and laying off employees. It has also sold noncore assets to raise money and refocus on its strengths. Most recently, in 2004, it sold its Eckerd drugstores business for $4.5 billion, and in 2003, it sold its Mexican store operations to a Mexican business concern.

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The company has buying offices in 14 foreign countries and quality assurance inspection offices in another ten foreign countries.

Recent Milestones 2005

Plans to open 20 new stores. Retired Chairman and CEO Allen Questrom is inducted into the Retailing Hall of Fame at Texas A&M.

2004

Sells the Eckerd chain of drugstores. Myron “Mike” Ullman becomes CEO. Announces plan to “reposition” its capital structure via debt reduction and equity repurchase programs. Opens 14 stores, including seven off-mall stores. Signs Chris Madden to design a home furnishings collection and Colin Cowie to relaunch its wedding and event gift registry and design tableware.

2003

Sells its six Mexican stores and closes its International Merchandising unit. Restructures its catalog business, closing the Atlanta Catalog Fulfillment Center and two telemarketing centers in Atlanta and Kansas.

2002

Closes 29 department stores. Reorganizes stores into four geographic regions, and centralizes store support functions in corporate headquarters. Opens first ten of what will be 13 regional store support centers, which distribute merchandise to individual stores.

Key Financial Stats 2005 revenue: $18,424 million 1-year change: 4 percent

Personnel Highlights Number of employees: 151,000 1-year change: 3 percent

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KOHL’S CORPORATION N56 W17000 Ridgewood Drive Menomonee Falls, WI 53051 Phone: 262-703-7000 Fax: 262-703-6143 www.kohls.com Ticker symbol: KSS

Overview Kohl’s is a discount department store chain that has about 640 stores in 40 states, about half of them in the Midwest. It was founded in 1962 in Milwaukee, opened its 40th store in 1988, went public in 1992, and grew like a weed in the years following the IPO. Today the company is expanding into the South and Southwest. Carrying name brands that most discount stores don’t carry is a big part of Kohl’s strategy; you’ll find Levi’s and Reebok products at Kohl’s stores, among other big brand names. But the company is also focused on building its private-label business; in September 2004, it hired the former president of private-label product development for Saks to a newly created position, executive vice president of product development, which oversees private-label product development. Job seekers can find careers in three areas at Kohl’s: corporate careers at HQ in Wisconsin, in areas such as marketing/advertising, credit, e-commerce, finance, human resources, information services, logistics, loss prevention, merchandise planning and allocation, merchandise presentation, merchandising, product development, real estate, and store administration; distribution center careers (Kohl’s has distribution centers in Corsicana, Texas; Grain Valley, Missouri; Findlay, Ohio; Mamakating, New York; Menomonee Falls, Wisconsin; Middletown, Ohio; San Bernardino, California; and Winchester, Virginia); and associate and store management careers in Kohl’s stores.

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Recent Milestones 2005

Plans to open some 95 stores.

2004

Launches a new private label called apt. 9. Opens some 95 stores.

2003

Launches the Daisy Fuentes apparel and accessories line. Opens 28 California stores, plus stores in San Antonio, Nevada, and Arizona.

2002

Opens 75 stores. Opens distribution center in San Bernardino, California, and its first stores in Massachusetts, New Hampshire, and Rhode Island.

Key Financial Stats 2005 revenue: $11,701 million 1-year change: 14 percent

Personnel Highlights Number of employees: 95,000 1-year change: 12 percent

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THE KROGER CO. 1014 Vine Street Cincinnati, OH 45202 Phone: 513-762-4000 Fax: 513-762-1160 www.kroger.com Ticker symbol: KR

Overview Founded in 1883 by Barney Kroger, The Kroger Co. operates about 2,500 supermarkets, about 30 percent of which are owned by the company. Nearly 500 of these supermarkets include a fuel center. Most Kroger’s stores include pharmacy services, as well. Some stores (Kroger’s “multi-department” stores) also sell general merchandise like apparel, home furnishings, electronics, toys, and jewelry. The company also operates some 800 convenience stores and 440 fine jewelry stores. Kroger is a big-time player in the private-label merchandise game; its stores typically stock some 7,800 private label products. Kroger counts Ralphs, Cala, King Soopers, Smith’s, Food 4 Less, and Fred Meyer among its more than 20 store brands. The company has been under significant pressure from Wal-Mart, which has been able to employ cheaper nonunion labor and offer products at lower prices. Because of this, the company was reluctant to give in to Ralphs workers’ contract demands in southern California in 2004, which resulted in a bitter, lengthy labor dispute. The company settled the dispute only after 4½ months. The company closed 15 under-performing Southern California stores following the dispute. Kroger’s has gone out of its way since to avoid labor unrest in other regions where it’s negotiating new labor contracts. It also faces legal action as a result of charges that it allowed locked out workers to work using false identification during the Southern California labor dispute.

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Recent Milestones 2005

Workers at Kroger’s King Soopers and City Market stores in Colorado, Ralph’s and Cala stores in the San Francisco Bay Area, and Kroger’s Food 4 Less and Smith’s stores ratify new labor contracts.

2004

Opens a prototype Kroger Marketplace, its new store concept, in Ohio. Southern California workers at Kroger’s Ralphs supermarkets end strike. Workers at Kroger’s Fred Meyer and Quality Food Centers stores in the Puget Sound area, Tennessee, Michigan, Mississippi, and Alabama ratify new labor contracts.

2003

Launches private-label Naturally Preferred brand of natural and organic food products. Names David Dillon CEO. Agrees to pay Dynegy $110 million to settle a dispute over energy charges.

2002

Named “Retailer of the Decade” by Mexican American Grocers Association.

Key Financial Stats 2005 revenue: $56,434 million 1-year change: 5 percent

Personnel Highlights Number of employees: 289,000 1-year change: 0 percent

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LIMITED BRANDS, INC. 3 Limited Parkway Columbus, OH 43216 Phone: 614-415-7000 Fax: 614-415-7440 www.limitedbrands.com Ticker symbol: LTD

Overview Limited Brands (formerly just The Limited) operates about 3,900 stores across the United States. Its Victoria’s Secret business sells women’s intimate apparel and personal care products. In addition to some 1,000 Victoria’s Secret stores, this business includes about 90 stand-alone Victoria’s Secret Beauty stores and Victoria’s Secret Direct, a catalog and e-commerce business; the company mails about 400 million catalogs each year. Its Bath & Body Works business sells personal care and home fragrance products under the Bath & Body Works and White Barn Candle Company brand names; the company operates about 1,600 Bath & Body Works stores. Finally, the company sells men’s and women’s apparel through about 1,000 Express stores and 340 Limited stores. Limited Brands also owns Henri Bendel, a high-end women’s apparel store in Manhattan, and Mast Industries, a contract manufacturing and importer; the company sources more than a third of its merchandise purchasing via Mast Industries. The company traces its roots back to 1963, when Leslie Wexner broke away from his family’s retail business and opened his own store, in Columbus, Ohio. The company launched its Structure stores in 1989, but made Structure part of its Express business in 2001. Victoria’s Secret is the company’s biggest line of business, accounting for 43 percent of total sales in 2004.

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Recent Milestones 2005

Reorganizes into three business groups: lingerie, apparel, and beauty and personal care.

2004

Sells its stake in United Retail Group. Lays off a quarter of workers in corporate headquarters.

2003

Sells Structure brand to Sears.

2002

Announces sale of Lerner New York/New York & Company. Launches Aura Science prestige beauty brand store concept in Ohio.

Key Financial Stats 2005 revenue: $9,408 million 1-year change: 5 percent

Personnel Highlights Number of employees: 115,300 1-year change: 4 percent

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LOWE’S COMPANIES, INC. 1000 Lowe’s Boulevard Mooresville, NC 28117 Phone (toll-free): 800-445-6937 Phone: 704-758-1000 Fax: 336-658-4766 www.lowes.com Ticker symbol: LOW

Overview Lowe’s Companies is based in North Carolina, where it was founded in 1922 as a family-run hardware store. The company has ridden the do-it-yourself home improvement wave to become the second largest home improvement retailer in the United States, after Home Depot, with more than 1,075 stores in 48 states. These days, the focus is on expanding into major urban centers. Lowe’s has plans to open about 150 stores in 2005, including in the New York City area. It is also making an effort to capture the female market, which it claims holds 80 percent of home-improvement purchasing power within households. Much of the company’s recent success has been driven by sales of installation services. Lowe’s stores sell everything from cabinets, flooring, and lighting products to paint, appliances, and lumber. The typical Lowe’s store stocks more than 40,000 products; stores typically come in one of two sizes: a 116,000-square-foot store for large markets and a 94,000-squarefoot store primarily for smaller markets. The company owns about 80 percent of its stores and leases the rest. The company also has nine regional distribution centers and nine flatbed distribution centers for lumber and building supplies, as well as a facility that handles special-order plumbing products. Lowe’s sponsors NASCAR driver Jimmie Johnson and his #48 car.

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Recent Milestones 2005

Plans to open about 150 stores. Names Robert Niblock CEO.

2004

Opens about 120 stores, including its first store focused on the urban market in Brooklyn, New York.

2003

Announces sponsorship of House Rules cable TV reality series. Named “most admired” specialty retailer in Fortune survey.

2002

Opens more than 110 stores.

Key Financial Stats 2005 revenue: $36,464 million 1-year change: 18 percent

Personnel Highlights Number of employees: 162,000 1-year change: 10 percent

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MERVYN’S, LLC 22301 Foothill Boulevard Hayward, CA 94541 Phone: 510-727-3000 Fax: 510-727-2300 www.mervyns.com

Overview Mervin Morris opened the first Mervyn’s in San Lorenzo, California, in 1949. Today the company has 257 locations in 13 states. (A majority of its stores are still in California, though.) It sells private-label and brand name merchandise, and competes against middle-market companies such as J. C. Penney and Kohl’s. From 1978 to 2004, Mervyn’s was owned by Target Corporation. Target sold the company in 2004 to a consortium of investors including Cerberus Capital, Lubert-Adler/ Klaff, and Sun Capital Partners. Mervyn’s is headquartered in Hayward, California, in the San Francisco Bay Area. It has four distribution centers, in Fremont, California; Ontario, California; Plano, Texas; and West Valley City, Utah. In addition to store employees, Mervyn’s is hiring to fill jobs in departments including asset protection, finance, human resources, marketing, merchandising, and product design and development.

Recent Milestones 2004

Announces layoffs of 150 employees, mostly at corporate headquarters. After gaining independence from Target, which banned Salvation Army bellringers at stores, Mervyn’s makes an exception to “no solicitation” policy to welcome the Salvation Army to Mervyn’s locations. Launches new maternity line designed by actress Holly Robinson Peete.

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2003

Named in disability lawsuit because aisles in Mervyn’s stores aren’t wide enough to accommodate people who use wheelchairs, walkers, and scooters. Experiences a 7 percent drop in sales. Launches aDORAble, a clothing line featuring cartoon character Dora the Explorer.

Key Financial Stats 2004 revenue: $3,553 million 1-year change: –7 percent

Personnel Highlights Number of employees: 29,000 1-year change: –12 percent

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NORDSTROM, INC. 1617 Sixth Avenue Seattle, WA 98101 Phone: 206-628-2111 Fax: 206-628-1795 www.nordstrom.com Ticker symbol: JWN

Overview John W. Nordstrom was a Swedish immigrant who struck it rich in Alaskan gold in the late 1800s. He used his fortune to open a shoe store with partner John Walin, spawning the posh retail empire that is today’s Nordstrom. Headquartered in Seattle, Nordstrom has 94 department stores, 49 Nordstrom Rack outlets, five Façonnable boutiques, a shoe store, and a clearance store across 27 states. It also operates 31 international Façonnable boutiques (mostly in Europe), and Nordstrom Direct, which includes the company’s catalog business and e-commerce site (Nordstrom.com). Nordstrom is notable for its high-quality merchandise and its reputation for strong customer service (especially its no-questions-asked returns policy), as well as its various amenities—most stores have live piano music and espresso bars; some even contain spas. It also has a reputation as a good place to work, especially compared to some rival retailers; it’s made Fortune’s annual list of the “100 Best Places to Work” with some regularity in recent years. Nordstrom stores sell a lot of private-label merchandise; the Nordstrom Product Group designs that merchandise, which is then produced by contract manufacturers. The company’s Nordstrom Credit line of business, which includes a federal savings bank, offers Nordstrom credit cards and Nordstrom Visa cards.

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Recent Milestones 2005

Announces plan to repurchase $500 million in stock.

2004

Fiscal 2004 net earnings total $393.5 million, up 62 percent from fiscal 2003. Opens stores in Charlotte and Miami, and announces plans to open stores in Honolulu and Natick, Massachusetts (the first Nordstrom store in the greater Boston area).

2003

Opens first Nordstrom Rack store in Florida. Fiscal 2003 net earnings total $242.8 million, up 51 percent from fiscal 2002. Opens stores in Houston; Austin; Richmond, Virginia; Lynnwood, Washington; and Wellington, Florida, and expands presence in Canoga Park, California.

2002

Closes Philadelphia Nordstrom Rack store. Fiscal 2002 net earnings total $161.3 million, down 28 percent from fiscal 2001 earnings. Buys out minority venture investors in Nordstrom.com, Benchmark Capital and Madrona Investments, making this catalog and Internet business a directly controlled subsidiary of Nordstrom. Partners with Amazon.com to offer Nordstrom merchandise via Amazon’s online Apparel & Accessories store.

Key Financial Stats 2005 revenue: $7,131 million 1-year change: 10 percent

Personnel Highlights Number of employees: 53,500 1-year change: 3 percent

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OFFICE DEPOT, INC. 2200 Old Germantown Road Delray Beach, FL 33445 Phone: 561-438-4800 Fax: 561-438-4001 www.officedepot.com Ticker symbol: ODP

Overview Office Depot is another of the big-box retailers that have changed the retail landscape. Its stores offer just about anything that could possibly be called an office product, from paper clips to laptops; many Office Depot stores even include a print center, which handles customers’ printing and shipping needs. Office Depot opened its first warehouse-style store in Florida in 1986, and the company has been expanding like the current federal budget deficit ever since. In 1991, the company acquired Office Club, which made Office Depot the largest store of its kind in the United States. Today it’s the number-two U.S. retailer of office supplies, just behind Staples. The company operates via three divisions. The North American Retail division operates about 1,000 stores in 44 U.S. states. The Business Services Group sells office products and services to businesses via a dedicated contract sales force, catalogs and call centers, and the Internet. The International Division sells products and services in 21 countries outside the United States and Canada via catalogs, the Internet (the company has more than 30 websites for international markets), a direct sales force, stores in France, Spain, and Japan, and international licensing and joint venture agreements.

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Recent Milestones 2005

Launches new “Taking Care of Business” ad campaign showing that successful businesses depend on Office Depot. Sponsors NASCAR, becoming that organization’s first-ever Official Office Products Partner.

2004

Offers small business owners free in-store marketing strategies seminars. Begins Northeast expansion by opening new stores with Office Depot’s updated “Millennium 2” format in North Attleboro, Massachusetts; Nashua, New Hampshire; and Largo, Maryland. CEO Bruce Nelson steps down. Announces intent to open 80 to 100 stores in 2004. Launches new “frequent buyer” customer loyalty program.

2003

Partners with Albertson’s to launch Office Depot “store within a store” environments in Albertsons markets in Chicago, Los Angeles, and Phoenix. Launches its first Hispanic-focused TV and radio ad campaign. Opens the first “Millennium” Office Depot store in Marietta, Georgia, featuring a remodeled store format that includes a more logical system of placing specific types of products next to each other on store shelves, more subdued store lighting, and better in-store signage. Enters Spanish market by opening six stores in Madrid; launches Spanishlanguage website mirroring English-language site. Launches Viking e-commerce website in Portugal; sells Australian operations of subsidiary Viking Office Products. Acquires French office products retailer Guilbert.

2002

Launches Viking e-commerce websites in a variety of European markets, including Switzerland, Luxembourg, Belgium, and Ireland. Launches websites for contract customers in France, the Netherlands, and Ireland. Launches Viking direct mail business in Portugal.

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Partners with Stop & Shop, a supermarket chain, to launch Office Depot “store within a store” environments in Stop & Shop markets in the Northeast. Partners with Amazon.com to offer merchandise through Amazon’s online Office Products store. Announces plans to expand in Central America. Expands European Business Services division, serving medium and large companies, into Germany and Italy.

Key Financial Stats 2004 revenue: $13,565 million 1-year change: 10 percent

Personnel Highlights Number of employees: 47,000 1-year change: 2 percent

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SAFEWAY INC. 5918 Stoneridge Mall Road Pleasanton, CA 94588 Phone: 925-467-3000 Fax: 925-467-3321 www.safeway.com Ticker symbol: SWY

Overview Safeway, which was founded by Sam Seelig in 1914, today has more than 1,800 stores in North America. Its U.S. operations are concentrated in California, Oregon, Washington, Alaska, Colorado, Arizona, Texas, the Chicago area, and the midAtlantic region. Its Canadian operations are concentrated in British Columbia, Alberta, and Manitoba and Saskatchewan. In addition to Safeway stores, the company operates Pak n’ Save Foods, Vons, Pavilions, Dominick’s, Carrs, Randalls, Tom Thumb and Genuardi’s Family Markets stores. Safeway also owns 49 percent of Casa Ley, a Mexican chain, and a majority interest in GroceryWorks Holdings, an online grocer. On average, Safeway stores measure about 45,000 square feet, but the trend toward bigger retail establishments is made apparent by the fact that new stores are typically 55,000 square feet in size. Many stores contain pharmacies, Starbucks coffee shops, or adjacent fuel centers. The company owns about a third of its stores and leases the rest, though in recent times it has made owning more stores a strategic goal. About a quarter of the company’s Safeway SELECT private-label products are manufactured in company-owned facilities; the remainder are sourced to third-party manufacturers. In Canada, the company distributes some of its private-label products to independent retailers and institutional customers.

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Safeway has 17 distribution and warehousing centers, 13 in the United States and four in Canada. The distribution centers in Maryland, Alberta, and British Columbia are independently operated.

Recent Milestones 2005

Reaches labor agreements with workers in the Las Vegas, Sacramento, and San Francisco areas. Announces plans to remodel up to 285 stores and open 35 new stores.

2004

Reorganizes marketing organization. Southern California strike ends, with Safeway claiming victory due to the two-tiered pay system agreed to by workers, which allows Safeway to give new employees much smaller pay and benefits packages than more tenured employees. Settles lawsuit brought by the state of California alleging that Safeway stores sold tobacco products to minors, for $245,000. CEO and Chairman Steve Burd survives an attempt by a number of big shareholders to oust him.

2003

Scales back ongoing store modernization program to limit costs in the midst of a soft business environment. Southern California Vons and Pavilions workers go on strike. After getting in a legal battle with one possible purchaser of Dominick’s chain and having a deal with another would-be purchaser of Dominick’s fall through because the purchaser couldn’t reach a labor agreement with Dominick’s workers, Safeway takes the grocery chain off the market.

2002

Launches Safeway.com, an online grocery shopping and home delivery business. Announces plan to leave Chicago market by selling money-losing Dominick’s chain.

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Key Financial Stats 2004 revenue: $35,823 million 1-year change: 1 percent

Personnel Highlights Number of employees: 191,000 1-year change: –8 percent

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SEARS HOLDINGS CORPORATION 3333 Beverly Road Hoffman Estates, IL 60179 Phone: 847-286-2500 Fax: 847-286-7829 www.sears.com www.kmart.com Ticker symbol: SHLD (proposed)

Overview In November 2004, Kmart Corporation and Sears, Roebuck and Co. announced their intention to merge. Both already-huge companies were lagging behind competitors like Wal-Mart and Target, and they hope that the broader presence and improved economies of scale the merger will bring will make the new company a stronger performer in the retail marketplace. Together, the two companies make about $55 billion in annual revenue and operate almost 3,500 stores. The new company, called Sears Holdings, will be headquartered in Illinois, but Kmart will continue to have a significant presence in Troy, Michigan. Kmart and Sears stores will continue to operate under their respective brand names. Kmart operates some 1,500 stores in 49 states, Puerto Rico, the U.S. Virgin Islands, and Guam. It’s notable for, among other things, its high-profile proprietary merchandise lines, such as Martha Stewart, Joe Boxer, and Sesame Street, and Kmart’s 60 or so supercenters sell a full line of grocery, deli, and bakery products in addition to the general merchandise sold at all its stores. The company owns three distribution centers and leases 13 others. Bad business decisions and increasing competition from the likes of Wal-Mart and Target forced Kmart to file for Chapter 11 bankruptcy protection in January 2002. To

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add to its hardships, accounting errors were discovered in late 2002 that required the company to restate its earnings over the past few years. The company laid off almost 60,000 of its workforce and closed more than 300 stores. Sears, known for private-label brands such as Craftsman, Kenmore, and DieHard, operates 873 “full-line” stores in the United States (these stores are usually part of a shopping mall) and 1,100 specialty stores (typically stand-alone, off-mall stores, or part of neighborhood shopping centers). The specialty stores, of which 818 are independently owned, includes 245 Sears Hardware and Orchard Supply Hardware stores, 17 stores selling home decoration and remodeling merchandise, and 51 discount outlets. It also operates 121 department stores, 49 furniture and appliance stores, 153 dealer stores operated under independent local ownership, 13 outlet stores, 50 floor covering centers, six specialty off-mall stores, approximately 2,300 catalog pick-up locations, and 112 travel offices in Canada. Sears also operates Sears Auto Centers and Sears.com, its online retail channel.

Recent Milestones 2005

The U.S. Department of Energy and Environmental Protection Agency recognize Sears for its leadership in promoting appliances that earn the ENERGY STAR, the government-backed symbol for energy efficiency.

2004

Sears and Kmart agree to merge. The SEC files accounting fraud charges against three Kmart executives. Aylwin Lewis is named president and CEO of Kmart. Kmart sells 36 stores to Home Depot and 45 stores to Sears. Kmart extends its deal to feature the Martha Stewart brand in its stores. Kmart opens the Kmart Design Group Office in New York, giving the company its first product design presence in New York.

2003

Kmart emerges from Chapter 11 bankruptcy protection. Kmart announces plans to close a distribution center and 316 stores. Sears sells its Credit and Financial Products business.

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2002

Kmart files for Chapter 11 bankruptcy protection and announces the closing of 283 stores. James Adamson named CEO of Kmart. Sears acquires Lands’ End.

Key Financial Stats Sears: 2004 revenue: $36,099 million 1-year change: –12 percent Kmart: 2005 revenue: $19,701 million 1-year change: –15 percent

Personnel Highlights Sears: Number of employees: 247,000 1-year change: –1 percent Kmart: Number of employees: 133,000 1-year change: –16 percent

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STAPLES, INC. 500 Staples Drive Framingham, MA 01702 Phone (toll-free): 800-378-2753 Phone: 508-253-5000 Fax: 508-253-8989 www.staples.com Ticker symbol: SPLS

Overview Massachusetts-based Staples is a superstore that caters to small businesses and consumers with reasonably priced office products and services such as photocopying and printing. The company was founded in 1985 by Thomas Sternberg and Leo Kahn, two veterans of the supermarket industry. By 1989, Staples had 23 stores and had made its initial public offering. Today, the company is the leading office supplies retailer, with 1,427 stores in the United States and Canada and more than 254 stores in Belgium, Germany, the Netherlands, Portugal, and the United Kingdom. Along with its 20,000-square-foot-plus superstores, which typically sell about 7,000 kinds of products, the company operates smaller Staples Express retail outlets (6,000 to 10,000 square feet) in urban areas and even smaller airport locations (1,500 square feet). The company also sells some 45,000 products online at Staples.com and through its Staples Direct mail-order division. The online and small-business catalog divisions were merged in 2001 into one unit called Staples Business Delivery. The company also operates Quill Corporation, which is known for providing office supplies to specific industry verticals like legal, education, and medicine. The fastest-growing area of Staples is its Staples Contract, which delivers supplies to business clients.

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Recent Milestones 2005

Plans to open more than 20 stores in the Chicagoland area.

2004

Pays dividends to shareholders for the first time. Airs first Super Bowl ad. Expands European delivery business by acquiring Pressel Versand International GmbH of Austria and the office products division of Malling Beck A/S of Denmark. Enters the China market through a joint venture with OA 365, a Chinese office products delivery company. Enters the Latin American market by acquiring Officenet, an office products delivery business in Argentina and Brazil that’s the largest B2B e-commerce company in South America.

2003

Settles Federal Trade Commission charges over alleged violations of the Mail Order Rule, which spells out what mail-order companies can and can’t promise about shipments and how they should go about notifying consumers about unexpected shipment delays. Launches new version of StaplesLink.com, the company’s B2B e-procurement site.

2002

Names Ron Sargent CEO. Acquires Medical Arts Press, making it part of Quill. Acquires Guilbert’s, a European mail-order company.

Key Financial Stats 2005 revenue: $14,448 million 1-year change: 10 percent

Personnel Highlights Number of employees: 65,078 1-year change: 7 percent

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TARGET CORPORATION 1000 Nicollet Mall Minneapolis, MN 55403 Phone: 612-304-6073 Fax: 612-696-3731 www.targetcorp.com Ticker symbol: TGT

Overview Target traces its roots back to 1902, when George Dayton opened a dry goods store in Minneapolis. Dayton’s opened its first Target discount store in 1962, and by 1977 the Target chain was parent Dayton Hudson’s most successful line of business. The company finally renamed itself Target in 2000. Today the company operates more than 1,300 Target stores, as well as the Target.com e-commerce business and a credit card business. Its store portfolio includes about 125 SuperTarget stores, which include Archer Farms groceries, as well as Target Greatland stores, which are two-thirds bigger than typical Target stores. While Target competes with fellow discounters Kmart and Wal-Mart, it has a much hipper reputation than those companies, thanks to funky private-label product designs from big-name designers such as Isaac Mizrahi and architect Michael Graves. It may be considered somewhat hip, but Target has not turned away from its discount strategy: As of March 2005, Target had introduced dollar-priced sections called One Spot to all its stores. The Mervyn’s and Marshall Field’s department store chains were part of the Target empire until 2004, when Target divested them. Target operates 22 distribution centers in 19 states.

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Recent Milestones 2005

Announces it’s opening 26 new stores in Arizona, California, Connecticut, Colorado, Florida, Georgia, Illinois, Massachusetts, Maryland, Minnesota, Missouri, New York, Ohio, Tennessee, Texas, Virginia, Wisconsin, and West Virginia.

2004

Sells its Marshall Field’s and Mervyn’s department store chains, as well as its Mervyn’s credit card receivables business. Exits the catalog business by selling its Signals and Wireless catalogs operations. Announces it’s building a new distribution center in Rialto, California, which will begin hiring employees early in 2006. Opens new distribution centers in Topeka, Kansas, and Midlothian, Texas.

2003

Launches Isaac Mizrahi line of women’s apparel and accessories.

2002

Opens 96 stores, net of stores it shuttered during the year.

Key Financial Stats 2005 revenue: $46,839 million 1-year change: –3 percent

Personnel Highlights Number of employees: 292,000 1-year change: –11 percent

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WAL-MART STORES, INC. 702 SW Eighth Street Bentonville, AR 72716 Phone: 479-273-4000 Fax: 479-273-4053 www.walmartstores.com Ticker symbol: WMT

Overview The dawn of the superstore era that is now upon us began in Rogers, Arkansas, with the opening of the first Wal-Mart Discount store in 1962. Today, Wal-Mart Stores is the world’s largest retail corporation—bringing its brand of one-stop shopping to the United States, Puerto Rico, Canada, Mexico, the United Kingdom, South America, Asia, and Europe. What began with a single warehouse has evolved into a global retail empire with nearly 1,500 Wal-Mart Discount stores, nearly 1,500 Wal-Mart Supercenters, more than 500 Sam’s Club (membership warehouse) locations, and more than 60 Neighborhood Markets across all 50 United States, as well as more than 1,300 stores in Argentina, Brazil, Canada, Germany, South Korea, Mexico, Puerto Rico, and the United Kingdom. The company also operates joint ventures in 21 Chinese locations and owns an interest in The Seiyu, a Japanese retailer. Wal-Mart attributes much of its success to its state-of-the-art information technology system and a scaled-back inventory, developments that allow for more efficient operations, greater profits, and a keener focus on customer service. It also benefits from employing low-wage nonunion labor, and it’s not afraid to play hardball to keep its stores union-free. Interestingly, in recent months it has agreed to allow unionization at its Chinese locations; the company is looking to China as a potential source of tremendous future growth.

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Wal-Mart has been criticized by a growing variety of individuals and organizations that say the company’s growth is coming with a variety of under-recognized costs. The company has been called to task for paying extraordinarily low wages—only 38 percent of full-time employees are able to afford to purchase a Wal-Mart health insurance plan. The company is the target of the largest class-action suit for sexual discrimination ever filed against a private employer. And it has been accused by many of radically changing the communities it enters, by pushing smaller retailers that have deep ties to the community out of business and by putting downward pressure on wages in the community.

Recent Milestones 2005

Plans to open 40 to 45 new discount stores, 240 to 250 new Supercenters (of which some 160 will be relocations or expansions of existing discount stores), 25 to 30 new Neighborhood Market stores, 30 to 40 domestic Sam’s Club locations (some 20 of which will be relocations or expansions of existing clubs), 155 to 165 international stores, three new regional general merchandise distribution centers, and three new food distribution centers. Pays $11 million to settle federal charges that it used illegal immigrants to clean its stores.

2004

Number one on Fortune’s list of “America’s Most Admired Companies” for the second straight year. Published an open letter to Californians in 15 state newspapers to argue that Wal-Mart is good for society and treats its employees well. Launches online apparel shopping on walmart.com. Acquires Bompreco, a Brazilian retailer. Stirs up controversy by planning to build a store next to ancient Aztec ruins in Mexico.

2003

Launches initiative designed to pressure suppliers to accelerate their adoption of RFID technology. Sells its McLane Company subsidiary to Berkshire Hathaway.

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Federal grand jury investigation of Wal-Mart results in federal officials rounding up 250 illegal immigrants working at 60 Wal-Mart stores in 21 states; the workers were employed by contract cleaning companies. 2002

Joins with Sumitomo in purchasing strategic stakes in Japan’s Seiyu Ltd.; the three companies plan to explore Japanese retail opportunities.

Key Financial Stats 2005 revenue: $285,222 million 1-year change: 11 percent

Personnel Highlights Number of employees: 1,700,000 1-year change: 13 percent

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On the Job The Big Picture Key Jobs Real People Profiles

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The Big Picture A great variety of careers are available in the retail industry. Small, local stores often consist of just the owner and two or three sales or counter staff, with everyone wearing whatever hat he or she needs to at any given time to keep the store running smoothly. In large retail organizations with multiple locations, career opportunities typically come in three basic flavors: in-store jobs, corporate jobs, and distribution jobs. In-store jobs are the ones most of us think of first when we think about the retail industry: sales jobs, store management jobs, store security jobs, and the likes. Then there are the corporate office jobs. Many of these jobs are in standard corporate functional areas, such as marketing, corporate communications, finance and accounting, human resources, legal, and information technology. And then there are the more retail-specific functional areas. Merchandising jobs, for instance, are central to retail companies. These are the jobs responsible for the actual buying and selling of merchandise by retailers. At smaller retailers, the buyer is often responsible for all the operations of a given department (e.g., men’s sweaters or women’s casual wear)—everything from deciding what merchandise to acquire from vendors; to acquiring, pricing, and displaying that merchandise; to managing sales and clerical staff; to marketing the department and its merchandise. At larger retailers, these responsibilities are likely to be handled by a number of separate, more specialized functions. (For example, a big retailer might have a buyer, a department manager, a visual merchandiser, and a marketing professional to handle all of the responsibilities taken care of by a buyer at a smaller retailer.) Other functional areas common to large retailers—department store chains or big-box retailers—can include real estate and construction (it takes real estate professionals to buy or lease new store locations, after all, and architects, engineers, and construction

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professionals to design and build new stores), loss prevention (these are the folks who oversee stores’ security systems and security staff), and Web development and e-commerce (for companies with an Internet sales channel). Retailers with private-label merchandise lines usually also have in-house product development and design functions, as well as a production function, to design those products, acquire the raw materials to make them, and manage their production by third-party factories (which are usually located in developing parts of the world, where labor is cheap). Finally, big retailers typically also operate facilities dedicated to logistics and distribution, which manage the delivery of merchandise from vendors and to individual stores. Here’s where you’ll find careers in areas such as supply chain management, transportation management, and process engineering.

Key Jobs Many jobs in retail don’t require a college degree, especially in-store jobs and some logistics and transportation jobs. Those with college degrees are eligible for the executive-track management-training programs that most large chain and department stores offer. (Increasingly, the successful specialty stores offer management-training programs as well.) More people find entry-level jobs in retailing than any other industry, according to the U.S. Department of Labor.

ASSISTANT BUYER If buying is your goal, this is where you begin. Assistant buyers typically help in merchandise selection, deal with vendors, write orders, and learn how to operate within a budget. You’ll need a good head for numbers and the ability to juggle too little time

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and too much information in stressful situations. Be advised that some retailers are eliminating this position, relying instead on automated processes for some of the more mundane order-taking, delivery, and follow-up aspects of this job. Most assistant buyers have a college degree, and many major in retail management or business. Salary range: $25,000 to $45,000

BUYER This is the person who is involved with and responsible for planning sales, monitoring inventory, selecting the merchandise, and writing and pricing orders to vendors. Being a buyer is the ultimate exercise in living on a budget. You’ll be told what you have to spend for a season, and your job will be to get the most and best for your buck. Buyers get their positions after spending 2 to 5 years as an assistant or by completing a management-training program sponsored by the store. A lot of people want this job, despite its increased emphasis on sales and inventory management and the relatively low pay. Be prepared for some fairly stiff competition. Salary range: $45,000 to $85,000

SALES ASSOCIATE Retail sales can be lucrative at certain high-end retailers or in electronics because of the generous commissions, but to qualify, you’ll need to be well versed in the products you’re selling. This is less true for most noncommissioned sales positions. If you like pleasing people and don’t mind standing most of the day, this job offers flexibility and an entrance into retailing. Students and others in need of part-time or seasonal work make up a full third of these sales teams. A college degree is rarely required for these positions, and those who work hard and do well can usually advance within a few years to sales or department manager or, in larger organizations, a management-training program. Salary range: $12,500 to $50,000, not including commission

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RETAIL MANAGEMENT TRAINEE If you’re accepted into a store’s management training program, this is your title for the 4 to 9 months you’re learning merchandising, finance, marketing, operations, and personnel management. Typically, sales associates and others who excel in various departments get first crack at these programs, though company recruiters also hire college grads and other outside experienced talent for the openings that remain. Salary range: $22,500 to $38,500

DEPARTMENT OR SALES MANAGER For management-training program graduates and for very successful sales associates, this is typically the first rung in the retail ladder. This is one of the lowest levels of management, but a useful one for those who want a long-term career in the industry. Department managers supervise the sales staff, control the sales floor inventory, and often work closely with buyers. A college degree is rarely required for this position; candidates need only to prove they can sell, work well with people, and keep careful track of inventory. Since technology is becoming an increasingly important part of sales and customer analysis, a facility with data systems is also a big plus. Salary range: $30,000 to $60,000

MERCHANDISE MANAGER Often known as a divisional merchandise manager (DMM), this job oversees several merchandise departments and their respective buyers. Buyers typically move into this position after 6 to 10 years. They help to ensure consistent quality, the proper amount of merchandise, and value and price points to customers. They also manage vendor relations, market visits, and the ongoing education and development of their buying teams. This is a senior slot, and if you do well, your next step is the upper ranks of executive retail management. Salary range: $50,000 to $160,000

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MARKET ANALYST Both retail and wholesale have a growing need for accurate and ongoing analysis of what customers are buying, when and how they’re buying, and what all the data means for buyers, advertisers, and strategic planning. Marketing majors who understand how to model demographic information and analyze the volumes of transactional data generated by customer purchases will find numerous opportunities in this field, both inside large companies and in a proliferating number of independent research groups. Salary range: $30,000 to $60,000

DIRECTOR OF MARKETING Many retailers are now focusing on loyalty programs and efforts to more accurately predict their customers’ needs and behavior. Seen as distinctly separate from sales, marketing directors and their staff manage external research and coordinate all the internal sources of information to retain their best customers and attract new ones. This is an increasingly visible slot, and e-commerce is now an integral part of the job. Salary range: $85,000 to $150,000

INFORMATION TECHNOLOGY Big retail outfits employ complex technology systems and specialized software—everything from logistics and supply chain software to Web servers and e-commerce software to POS (point-of-sale) systems. New technologies are entering the picture regularly, too; for example, RFID technology is currently changing the way big retailers manage their supply chains and track inventory. Someone’s got to develop, maintain, and fine-tune all those technologies, and that someone is IT. Even very small operations now rely heavily on inventory-management and logistics technologies. For those of you interested in networks and systems, this is still a relatively open arena. Job titles in this area include Web designer, e-commerce manager, system applications programmer, system developer, project manager, and point-of-sales administrator. Salary range: $30,000 to $150,000

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Real People Profiles ASSOCIATE BUYER Age: 29 Years in business: 2 Education: BA in political science Hours per week: 50 Size of company: 111,000

What do you do? An associate buyer is in between an assistant buyer (who handles the day-to-day execution of what the buyer wants to do: things like putting in the paperwork for merchandise price changes, and managing vendor purchase orders) and a buyer (who makes decisions about what and how much merchandise his or her department is going to sell, at what price, and so on). I’m kind of a mini-buyer; I get to buy for my own little area, men’s seasonal sportswear—which includes shorts, swimwear, and outerwear. I decide which products in my category to buy from vendors, and when. I also financially manage my piece of my department’s business, which means I make decisions on things like how to advertise my merchandise and when to put my merchandise on sale.

What did you do before? I worked for the first 4 years out of college in finance, then in an account management job at a dot com. Then I started law school, but quit when I realized it wasn’t for me.

How did you get your job? I had a good friend who was a buyer, and I thought her job was interesting. So I talked to her about it, and she put me in touch with HR. And that ended up with me getting hired as an assistant buyer.

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What kinds of people do well in this business? You’ve got to have opinions. When making decisions about what merchandise to sell, you want to be able to consider the past sales performance of different types of merchandise, but you’ve also got to be able to go on gut instinct about what’s going to sell, as well. You also have to be a thorough person, since there are so many details to keep track of. You should be flexible, because this is a business in which, if something isn’t working, you’re going to want to switch gears quickly. And you should be aggressive, but still able to work well with others; both traits will help you in your dealings with vendors.

What do you really like about your job? I like that my job exercises both my left brain and my right brain. There’s a lot of math and analysis to this job—to do my job well, I need to find trends in mountains of sales data, and understand what those trends say about what customers are looking for—but I also get to be creative and rely on my instincts. Also, I have a very supportive district merchandising manager, which is really nice. And I love that I get to run my own little business, buying and selling men’s seasonal sportswear and trying to maximize the profit my merchandise makes in the process.

What do you dislike? There are some challenges that arise from working with my company’s corporate merchandising group, which produces our stores’ private-label goods. Sometimes we don’t want to carry as much private-label merchandise as they expect us to. Also, just like at any big company, there can be times where top-down plans for how you can run your business may not reconcile with how you think you should run your business. And there can be difficult personalities to work with in retail; I used to work for a buyer who could be challenging to get along with.

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What is the biggest misconception about this job? That it’s a “cute” career, that you just sit around and pick out clothes all day. That’s just 10 or 20 percent of the job, looking at product. There’s tons of financial analysis involved, and all the other components of running a profitable business. You have to have those skills, not just what you think is good taste in clothes.

Looking back, what do you wish you had done differently? Nothing, really. I think my finance and account management experiences really help me in this career. And my previous work experiences at least showed me what I didn’t want to do with my career.

How can someone get a job like yours? I strongly recommend doing an internship while you’re in school. You don’t know what any career is about until you actually do it, after all, and retail may be completely different from what you expect. After that, get yourself into a training program at a retailer. And remember, you don’t have to have a retail degree or any formal retail education to get into this field. What’s really important is to talk to as many people in the business as you can; most buyers are passionate about what they do and can give you real insight into the job—and, besides, people usually like to talk about what they do.

Describe a typical day. 7:30

Get into office; check sales results from previous day. Compare yesterday’s sales to last year, to projections, and to yesterday’s performance by the rest of the company. These sales reports contain information from the department level on down to the level of individual products, and help give a real understanding of what’s going on in your business.

8:30

There are two kinds of purchase orders I’ll submit. One is the basic replenishment purchase order, for products that I’m already planning to order according to a regular schedule, in order to keep a sufficient inventory of the product. The other is a purchase order for a product that’s selling better than

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expected. Today I notice from the sales results that there’s a print board short that’s selling more than we anticipated it would, so I place an order for more of the product with the vendor. 9:00

Every week I update something we call a rolling operational forecast. I make some changes to my area of the forecast, based on new expectations for the sales performance of the board short I just reordered, and to take into account price markdowns I’ve decided to make on a couple of other products that are not moving fast enough.

10:00 I spend some time managing my purchase orders, making sure that we’ve received shipments we ordered from vendors, that new vendor shipments have gone out on time, and so on. 11:30

A vendor contacts me to ask for an extension on an order it’s already agreed to ship. I ask the vendor if I can get a discount on the shipment as a result, and after some negotiating agree to take a slightly bigger shipment in exchange for a discount; this merchandise is moving well, and it won’t hurt to have more of it in stock.

12:00 Go out to grab a sandwich; return to my desk to eat.

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1:00

Meet with a vendor, a manufacturer of swimwear. Review the sales performance of the vendor’s swimwear in our stores; look at some of the new product he’s trying to sell.

2:30

Decide to mark down a couple of products for the first time, and e-mail the price change department to get them to process the price change.

3:00

This morning I noticed from the daily sales reports that sales of shorts are weak in our Hawaii stores, so I call my regional merchandise manager to see if there’s any reason for that weakness.

4:00

Meet with planner. (Planners decide how much of the merchandise I buy goes to each individual store.) I tell the planner that Speedo bathing suits are selling like hotcakes at our Beverly Hills store, and the planner agrees to allocate more Speedos to that store.

5:00

Contact the company’s travel department to make plans to go to an upcoming men’s apparel show in Las Vegas.

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5:30

Review advertisements for upcoming promotion. The color of my featured product in the ads, a print faux board short, is not accurate, so I request that the color be corrected.

6:00

Head home.

DIRECTOR OF MARKETING Age: 37 Years in business: 15 Education: BA/MBA Hours per week: 55 Size of company: 45,000 Annual salary: $125,000 to $150,000, plus up to a 35 percent bonus

What do you do? I report to the senior vice president of marketing, and I’m responsible for all the development of our advertising, our market research, and our business analysis efforts, as well as some of our promotional and PR efforts. Increasingly, I’m also responsible for our media planning and managing our media agency. And I’m responsible for our private-label business.

What did you do before? I was a VP of marketing for a dot com, and a brand manager in packaged goods.

How did you get your job? Through a headhunter I’d had a relationship with for 6 or 7 years. He’d helped me look at opportunities after business school, and when it came time to look for a job this time, he helped me again.

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What kinds of people do well in this business? Those who enjoy change, like working at a frenetic pace, are nimble, and are resultsoriented. You also have to accept the fact that unlike at a packaged goods company, marketing is a support function rather than the core function.

What do you really like about your job? I like that it’s very immediate. I can change what’s happening in stores tomorrow and what’s happening in our advertising in 2 weeks. It’s particularly fast-paced in comparison with packaged goods. I like to say that things happen in terms of weeks in retail, compared to months in packaged goods; in other words, what took 6 months to accomplish in packaged goods takes just 6 weeks to accomplish in retail. There’s a joke along the lines of, “When it’s time to set schedules in a meeting between a vendor and a retailer, the retailer is the one who looks at his watch, while the vendor is the one who looks at his calendar.”

What do you dislike? I sometimes feel that we’re too reactionary and too driven by the need for short-term results. I also think we don’t always take enough time to celebrate successes. There’s also quite a lot of pressure, in my position. And between Blackberry, PDAs, and cell phones, the job never shuts off.

What is the biggest misconception about this job? The biggest misconception is that in marketing all we do is oversee the creation of advertising. Marketing is about understanding the consumer and coming up with business strategies based on that understanding. Advertising is part of that, but the job is not all about making ads. Put it this way: There are 40 people in my department, and only two of us work on advertising.

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Looking back, what do you wish you had done differently? I probably would’ve taken more finance classes. At the more senior staff levels, you spend a greater amount of time going over finance issues. At the end of the day, money makes the business world go around.

How can someone get a job like yours? You need a diverse background. It’s good to have classical packaged goods training. It’s also good to have some more entrepreneurial experience, so you understand how to do things quickly and with limited resources. You also need the MBA, of course.

Describe a typical day. 7:30

Before leaving for work, I check my Blackberry for e-mails. Then I check my voice mail on the drive to the office.

8:00

I have a meeting with my merchandising group to plan our circulars strategy and details. We review drafts of the circulars, discussing the art and the products to feature in the circulars.

9:30

I meet with one of the analysts on my team to review the last 4 weeks’ sales by region. This allows me to better understand what’s going on in the company’s different categories and regions—to do things like understand what effects various events, such as weather events, have had on business in different regions.

11:00

I meet with one of the analysts on my team to review and recommend changes to the art on the packaging of one of our soon-to-launch private-label products.

12:00 I go downstairs to lunch in the company cafeteria. (I eat at my desk probably 50 percent of the time, though.) 1:00

I spend an hour on the phone with our advertising agency, reviewing their proposed creative for a new ad campaign.

2:00

I have my weekly meeting with my boss, the SVP of marketing. I update him on the major issues the department is working on and get his sign-off on some

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decisions I want to make, such as the marketing budget for a new private-label product. 3:00

I spend some time clearing through e-mails.

4:00

I meet with HR to see what’s going on with a job candidate I’m trying to hire.

5:00

Check voice mails and return some phone calls. Others—such as the many cold calls I get from vendors who want us to stock their products—can wait.

6:00

Head home for dinner. I’ll probably spend a bit of time responding to e-mails, later in the evening.

SENIOR TECHNICAL SWEATER DESIGNER Age: 36 Years in business: 14 Education: BA in English literature; AA in fashion Hours per week: 45 to 50 Size of company: 328,000 Annual salary: $110,000 plus $10,000 bonus

What do you do? I work on sweaters. I do yarn development and research, which involves going to Italy to check out new yarns. If they’re affordable, great, we’ll use them. If not, I’ll work with a yarn mill to make something similar to the yarns I like, only more affordably. I shop Europe and New York for sweater ideas and to see what’s going on in sweater design. In the end, though, my job is to work with the sweater designer to make sure that what ends up on my company’s store shelves is the best sweater we can afford. For example, say there’s a $600 Prada sweater that we really like and think we could sell to the mass market at the right price. My job is to make sure the $20 sweater we come up with that’s based on the $600 sweater is as close as possible in quality to that sweater. There are all kinds of ways to make creating a certain design more affordable, things like knitting techniques and so on.

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What did you do before? I was in raw materials research and development, meaning that I found yarns and made them more affordable.

How did you get your job? I knew I wanted to leave my old job, so I e-mailed a friend here and told him that I was ready to leave New York, and he forwarded my information to HR. I had three or four phone interviews, then I flew out here for a day of interviews, then I got the job offer. The interviews were incredibly thorough: I had to take a personality test; meet with a psychologist to talk about things like my family, how I deal with conflict, and my personality; and take math and logic tests. I guess I passed, though.

What kinds of people do well in this business? You have to be able to speak up. You have to love details and tedium—things on the level of knowing how much acrylic a supplier can add to a yarn without adding so much that it’ll make the duty rate charged for importing the yarn more expensive. You have to be curious, to understand the materials and processes that go into making yarns and sweaters. And you have to be a very clear communicator.

What do you really like about your job? I love being the expert in my area, being the go-to person for things that are a mystery to other people. I like the people. And I like being in a more senior management position and managing people. I’m going to financial meetings, now, and it feels like that has been a long time coming in my career. I also love working for a company I consider ethical; I couldn’t work for a fur company, for instance.

What do you dislike? Part of me feels like retail isn’t a high enough calling. I’ve thought about getting a master’s or a PhD. And I’m sick of talking about clothes all the time, which is all anyone around here talks about.

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What is the biggest misconception about this job? I’ve had people say to me, “What do you have to do to design a sweater? There’s vneck, and there’s crewneck. What’s so difficult?” So I’d have to say the biggest misconception is that apparel design is easy, that it’s as simple as drawing a picture. There are lots of details you need to be on top of, lots of skills you need to have.

Looking back, what do you wish you had done differently? I wish I’d had the confidence, earlier in my career, to ask for more from prospective employers, in terms of things like compensation and job title.

How can someone get a job like yours? Start as an assistant designer, and take every job that comes your way. Don’t be a prima donna. Don’t be above taking on mundane responsibilities like making photocopies; that’s how you get ahead.

Describe a typical day. 7:30

Get to the office. Check my calendar, and assess the day’s meetings to make sure I have everything ready to go for them—photocopies, et cetera.

8:00

Go through e-mails. There are four e-mails about an argyle pattern the designer wants. The factory is saying it can’t produce the pattern at the price we want. I explain to the designer why the factory can’t do it, and propose several alternate ways to do the pattern and meet our price point, mentioning the pros and cons of each alternative.

10:00 I go to a cross-functional meeting with the designer, buyer, and product manager. We work out the details of a ribbed turtleneck sweater. 11:30

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Another meeting, this time with the designer and the buyer for a hooded cardigan. The designer isn’t happy with a prototype we’re looking at, which uses a much thinner cotton fabric than the chunky wool sweater sample she approved for use. The buyer says she changed the design in order to sell the style in the deep South, where the chunky wool version wouldn’t sell well. I

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step into the conversation and suggest doing a separate design for deep South stores, rather than trying to adapt a design in a way that may not work aesthetically in cotton. .

1:00

Go down to the cafeteria to grab lunch, which I eat at my desk.

2:00

I look at the financials for the past week, trying to learn more about what’s selling, where, and why.

4:00

I contact the travel department to start making arrangements for my upcoming trip to Italy.

5:30

Time to head home.

PREPRODUCTION MANAGER Age: 28 Years in business: 7 Education: BS Hours per week: 55 Size of company: 153,000 Annual salary: $90,000

What do you do? I’m kind of the liaison between our design team, our fabric R&D team, and our people overseas who work with our contract manufacturing facilities; I work with all of these groups to try to get each season’s product samples made according to the specifications laid out by the designers. Each season, design approves the fabrics it wants to use in our private-label products with R&D, then gives me those fabrics. I then work with our overseas people, and the mills that produce our fabrics, to place orders for the appropriate fabrics. There are a number of different kinds of fabrics—solids, prints, stripes—and different fabrics require different amounts of time to procure. Once the fabric orders are in the works,

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I work with R&D to test the fabrics that design wants to use, to make sure those fabrics meet legal standards. I’m in baby apparel, so it’s important that the fabrics we use meet standards regarding things like nonflammability and color-fastness to saliva. I also work with design to put in orders for “trim”—snaps, buttons, back and neck tape, woven tag labels, patches, etc. Once we have product samples in hand, I work on costing, looking for ways to get the best prices from vendors for the retail garments.

What did you do before? I worked at a more luxury apparel manufacturer as a product development manager.

How did you get your job? My boss at an old job took a job here, and recruited me—which is a common way for people to move forward in this business.

What are your career aspirations? To do less production and costing and get back more into product development and R&D.

What kinds of people do well in this business? You need to have good communication skills, because you’re always conveying ideas between different parties. You have to be persuasive and aware of cost concerns in order to do things like get design to amend its original plans for a product to meet a specific price point with the finished product or to negotiate with overseas vendors on things like cost and capacity. Every day, I’m sending someone an e-mail that starts, “I know I’m asking a huge favor, but . . .” You also have to be patient and flexible, because this is a fast-paced, rapidly changing environment; you might put a project in the works, and then the next week the design will change and you’ll have to do it all over again. Finally, there are a lot of moving pieces in this job, so you need to have a good attention to detail.

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What do you really like about your job? Many of the people are a lot of fun. And I love working on samples, then seeing the finished product in the stores. You’re working on products a year before they’ll end up in the stores, so sometimes you can forget just what you were working on, but when you do finally see the products on store shelves, it can give you great satisfaction. I also get to do a fair amount of traveling overseas in this job, which can be enjoyable.

What do you dislike? The constant change in this industry can get to you. The hours, during the bad times, can be atrocious. And the travel can get draining; I travel for 2 to 3 months out of the year.

What is the biggest misconception about this job? That the design and production of apparel are in any way glamorous.

Looking back, what do you wish you had done differently? I wish I’d done an internship to expose myself more to the day-to-day realities of apparel production, because then maybe I would have pursued design instead. Also, I wish I hadn’t been so modest when negotiating for new jobs, especially in terms of my salary requirements.

How can someone get a job like yours? Start as a production coordinator, maybe in a smaller company because you’ll get more hands-on experience. Use that experience to figure out what area of the business you like, then get an entry level job at a major label and move up through the ranks. Of course, doing an internship is a great way to get started. Make lots of contacts, and keep your network current.

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Describe a typical day. 9:30

Get to the office, and check e-mail and voice mail.

10:00 Send an e-mail to one of my coworkers overseas, checking to see if the production of a yarn that design wants to use in spring testing is on schedule at the mill that’s creating the yarn. 10:30

Get an e-mail from overseas telling me that another fabric won’t be able to be produced on time for us to meet our deadlines, so I go to design with another fabric suggestion that I think will meet their requirements.

11:00

Weekly meeting of my cross-functional team. (Together, we oversee the creation of our label’s baby apparel merchandise.) We review weekly sales figures, upcoming deadlines, and outstanding issues.

12:00 We just had a series of big meetings last week, in which we made decisions about our product line next spring. One of the sweater designs we decided on during those meetings turned out too high in terms of production costs, so design agreed to change the product to use a cheaper yarn. I send an e-mail to an overseas coworker to see when we’ll receive the sample in the new yarn, so design can approve it and we can go into production.

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1:00

It’s a beautiful day, so I go out with friends to pick up a sushi lunch from a nearby deli, which we eat in the office in a design room.

2:00

Work on fabric approvals with R&D. Design wants a certain fabric, and R&D has finally gotten the fabric swatches, so I sit with R&D to show them the design.

4:00

Answer a bunch of e-mails.

5:30

Work on the tracking and costing of samples, recording information in an Excel spreadsheet we use to keep track of everything we’re working on.

7:30

The day’s over! I go out for margaritas with a few people from work.

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ARCHITECT/SENIOR PROJECT MANAGER Age: 40 Years in business: 18 Education: Bachelor of architecture (5-year program); MBA Hours per week: 40 to 45 Size of company: more than 100,000 Annual salary: $85,000

What do you do? I work for a large retail corporation. I have two major roles—construction project manager and corporate facilities real estate strategist. As construction project manager, I represent the company in constructing large office buildings. I participate in ongoing project development, from design through construction and occupancy. I work alongside the architects, engineers, and construction companies. As corporate facilities real estate strategist, I look at the company’s business plans and assess projected growth versus available office space, to gauge when we may need additional space. I work with the real estate, corporate legal, and finance departments, as well as company executives to determine whether we, for example, should lease or construct additional buildings and when a lease or construction should commence. In this role, I draw more on my MBA than my architectural experience to explore the business implications of real estate alternatives.

What did you do before? I was a project manager in an architecture firm.

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How did you get your job? I answered a newspaper ad for a project manager position.

What are your career aspirations? On the construction side, I would like to work on sustainable architecture—determining the environmental impact of constructing and operating a building, examining materials and systems and making smart choices about what we’re building, and looking at using recyclable and energy-efficient building materials. I would like to strengthen the facilities real estate strategy piece within the company, through the addition of tracking and forecasting software, and simplifying the communication of headcount information.

What kinds of people do well in this business? You have to be comfortable with a certain amount of chaos. You rarely have all the information you would like to have to make a decision, and it’s likely the information will change tomorrow. You must be comfortable with uncertainty. Starting out in the business, you should find a way to spend time out on construction sites to see how things actually go together. You should see how drawings become reality, which helps designers become smarter about what they are drawing.

What do you really like about your job? I find the most exciting part of the job is watching design concepts become reality. Seeing people move in and enjoy working in the building is really gratifying. I appreciate that I’m able to work with top executives in the company on a daily basis and that I have the opportunity to make a positive impact on the work life of all corporate employees at my company.

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What do you dislike? I get tired of corporate politics and posturing. In our corporate support role, we find that people who provide amazing customer service in our retail environments can be very challenging and uncivil customers to us. You need to develop thick skin. People often don’t appreciate that we’re trying to solve everyone’s problems. Very few of them understand how long it takes to make changes to buildings—most expect it to happen instantaneously. As a department, what we do is generally regarded as an expense and not an investment, so we’re expected to do a lot with a little.

What is the biggest misconception about this job? People think architecture pays really well. If you’re going to work in an architectural office, it’s got to be something you love, because you’re not going to get rich doing it.

Looking back, what do you wish you had done differently? I should have gone back for my MBA sooner. I went back to get my MBA 9 years after graduating.

How can someone get a job like yours? Most architecture firms look for an architecture degree. Facilities positions in corporations usually look for a degree in architecture or facilities management. Real estate or customer service operations experience may also be valuable. Both architecture and facilities positions will also consider someone with a degree or experience in interior design, so long as the emphasis was corporate or commercial interiors rather than residential design.

Describe a typical day. 8:00

Get into the office, and review e-mails and voice mails. I usually have a half dozen e-mails waiting in the morning from both internal and external partners regarding construction projects, snapshots of current real estate negotia-

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tions, or updates from user groups comprising employees working in one section of the company. These provide a headcount—a projected need for corporate space for this year. 9:00

Dive into an Excel spreadsheet report on corporate facilities real estate. I might use it to build charts that illustrate headcount projections versus available office space and compare several options.

11:00

Call several user groups to find out what size they will be by the end of the year. If the numbers I have for a particular user group are more than a month old, I will check in with them to see if there are any changes.

11:30

Check with colleagues in the facilities department to see whether the number of seats we have allocated to a given group is in line with the actual number they’ve requested.

12:00 Meet with my boss to review how reports are shaping up and get feedback on the assumptions or formats I am using.

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12:30

Get lunch.

1:30

Call a contractor about a six-story building I’m working on to discuss where the computer system controlling the heating and cooling systems should be located.

2:00

Call city planning officials to touch base on the status of a possible new building.

3:00

Meet at a job site with a construction company project manager, architects, and engineer. We walk around the project, review construction issues, and make decisions to keep the project moving.

5:00

Back at the office. I review the current project schedule with the team that installs furniture in new buildings and gets people moved in.

6:00

Head home.

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CARD SHOP OWNER Age: 53 Years in business: 25 Education: BA in philosophy Hours per week: 32: 8:30 a.m. to 5:00 p.m., 4 days a week Size of company: 9 Annual salary: $35,000 to $50,000

What do you do? I run an independent card and gift store called Beeps in Albuquerque, New Mexico. I buy products. I do store design. I oversee a manager and a team of employees. I do book work. I talk to people: customers, sales reps, other businesses, bankers, and the landlord. I have a cat named Ziti in my store, and I feed her and clean her litter box.

What did you do before? I’ve always been in retail.

How did you get your job? I was too stupid to know any better. I borrowed $10,000 and opened a business. If I had taken any business classes, I wouldn’t have done it.

What are your career aspirations? I want to let my manager run the store so I can retire.

What kinds of people do well in this business? You have to be creative and have a sense of humor. Humor is what makes your store individual. It defines you more than anything else. So many people have left the retail industry because their only experience has been in department stores, whose personalities get swallowed up by the conglomerates that own them. A lot of stores fail because the owners forget that their revenues need to go back into their overhead and they take

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too much money out for their own paychecks. Other important things are people skills and communication skills. You need them for managing, selling, and schmoozing. You should also be a risk-taker. If you’re not, you might do better by buying into a franchise where you’re more or less told what to do. And you need to know your customer, know whom you’re targeting.

What do you really like about your job? It’s mine. I can do whatever I want. I can take risks and nobody can do anything about it.

What do you dislike? Firing people. I only have to do it on occasion, but it’s never pleasant, ever.

What is the biggest misconception about this job? People think that it’s glamorous and that you make a lot of money. They also think it’s fun, which it can be, but it’s a lot of work, and after 25 years. . . .

Looking back, what do you wish you had done differently? Nothing. When I first started, I had two stores in Minnesota and one in New Mexico. I used to think that running multiple stores was the biggest mistake I had made in my life, but if I hadn’t done it, I wouldn’t have known it was a mistake, so I don’t regret it.

How can someone get a job like yours? Have an idea, borrow the money, and take the risk.

Describe a typical day.

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8:30

On the way to the store, I stop and do business-related errands—buying stamps, getting change at the bank, picking up cat food, etc.

9:00

Get to the store and check on my cat, Ziti. Next I meet with Mindy, my store manager. It’s sort of a regrouping to ease into the day. We talk about things

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that I’ve noticed that she might not have, and vice versa, like “Did you see that display? Should we move that over there?” This is usually after one of the kids—the employees—has said that the register is $20 over or under what it should be. Mindy takes care of all that. They come to me with it, hoping I’ll do something, but I don’t. 10:00 Do paperwork, pay bills, get things ready for the accountant. I go over bank statements and decide that I could be getting a better deal from the bank. I do some comparison shopping so I have an offer to take to them. 12:00 The landlord returns my call. I pay dues to the community association and I pay rent, so I think he should make sure the place doesn’t start looking ratty. I have to keep sticking my nose in everyone’s business. 12:30

Go out the back door and pick up lunch at a restaurant nearby. I bring it back to the store and eat it while I make phone calls.

1:30

Pull catalogs and reorder some of our staple, everyday items, and look at some new things to decide if there’s anything I want to order. Since I’m not part of a card chain, I hand-pick every single card that we sell. It takes three times as long, but that’s what gives the store its individuality. There’s a person making every single decision. Everything goes through me or my manager. My store does $500,000 wholesale in inventory a year, and that’s a lot of merchandise in and out of the store. It’s important to always reorder the popular items, because if you run out or if you’re down to just one, you lose a sale.

3:30

I meet with a sales rep for a toy company. She’s flown in from Chicago to see me. We go over new designs and reorder old ones.

5:00

I get ready to leave the store and go back home. I remind the kids to turn the swamp cooler off, open the windows, and turn on Ziti’s fan when they leave. They roll their eyes because I tell them that exact thing every single night. I think it’s so important to be a responsible pet owner. I’ve been on the board of the Animal Humane Association for the last 8 years—I resigned this year because I’m building a house and I don’t have as much spare time. It’s important for a business owner to give back to the community, though. I feel like I have an obligation to serve on the board of a nonprofit.

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The Workplace Lifestyle Culture Workplace Diversity Compensation and Benefits Career Path Insider Scoop

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Lifestyle You’ll find a variety of lifestyles in the retail industry, depending on your company, the functional area you work in, and even the time of day that you work. There can be significant pressure in retail jobs, for everyone from executives down to on-the-floor staff in stores. In stores, the pressure comes from trying to keep the customer happy—from dealing with irate customers, keeping your department looking spiffy, and making sure you maximize sales by stocking and displaying merchandise effectively. And in retail, almost everyone feels the pressure relating to sales figures. Whether you’re in a corporate job in marketing or finance, or on the floor in a retail store, you’re going to hear about your store and your company’s sales performance every week, if not every day. And your company will make sure you know it if your store, your department, or the company in general isn’t meeting sales goals. The lifestyle demands flexibility, in most companies and in most positions. Retailers can never really control their future, because their performance depends on the whims of the consumer marketplace—and customer preferences are notoriously fickle. Retailers plan their operations from season to season, but invariably situations arise, in almost every area of the industry, that require retail employees to change course and do things differently than planned.

HOURS There is no typical workday in retail. If you work in a store, whether as a sales associate or in store management, you may have to work unusual hours—for instance, overnight hours at a convenience store, or really-early morning hours if you work at Starbucks, or evening hours if you work at a department store or big-box store. And there are times

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for almost everyone who works in retail when they have to put in long hours—during the holidays, for instance, if you work in a store or in distribution and logistics; when you’re finalizing what merchandise your department is going to be carrying during a given season, if you’re in merchandising or product development and production; or during tax season or during an audit, if you’re in accounting or finance. And if you work in a store, there’s a good chance your workweek will include some weekend hours—and you may not even get 2 days off in a row (e.g., your “weekend” might consist of a Tuesday and a Sunday). Still, in most roles, this is not investment banking or consulting—you won’t have to put in many 90-hour weeks.

TRAVEL Travel requirements vary by company and by job function. Most jobs in retail don’t have much in the way of travel requirements. If you work in a store or in distribution, you probably won’t have to travel much at all (unless you’re a truck driver or otherwise involved in actually moving merchandise from one place to another). If you work in marketing for a chain retailer, though, you’ll probably spend a fair amount of time visiting store locations doing things like checking to make sure promotions are being conducted according to plan. If you work in merchandising or management for a chain retailer, you might spend a lot of time traveling to stores overseeing the departments whose merchandise you manage. And if you work in an area such as product development or design, you may spend a fair amount of time traveling to fashion events or to production facilities.

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Culture The culture at a given retail company depends on the category in which it competes and the style of the company’s management. At a smaller retailer, for instance, or at a fashion-driven retailer like Barney’s, there can be quite a lot of room for creativity in how merchandise is displayed, and merchandisers can enjoy quite a lot of freedom in terms of making merchandising decisions. At bigger chain retailers, on the other hand, creativity can be rather discouraged. Bigbox retailers like Wal-Mart and Target have found a recipe for success, after all. This recipe includes making customers feel instantly at home in their stores, whether the store is in Massachusetts, Montana, or Mississippi—which means you’ll be discouraged from making your store seem in any way unique. It also includes doing things by tried-and-true processes, meaning you may be allowed very little wiggle room in terms of how you get things done, even if you think you know a better way of doing things. In many retail establishments, you’ll find a deep appreciation for the kinds of merchandise your employer sells and for the lifestyle of your employer’s target demographic. For instance, if you work for a retailer of skateboards and snowboarding equipment, chances are that the culture at work will be focused on extreme sports. If you work at a fashion-driven apparel retailer, chances are that the workplace culture will be focused on fashion and pop-culture trends. (Indeed, an insider in such a workplace says, “All anyone at work ever talks about is clothes, celebrities, and dieting.”) At other retailers, though—especially at big chain retailers—the culture is driven more by the bottom line than the products you sell. One insider says, “At my old company, it was about fashion, about the clothes we sold. Here, though, we could be selling anything. It’s about moving product units, and not at all about fashion.”

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Workplace Diversity Retailers typically reflect the demographic they’re selling to. If you work at a golf pro shop in Greenwich, Connecticut, for instance, you’ll probably be selling merchandise to a lot of white executive types and working with a lot of suburban white folks interested in golf. If you work for a hip-hop clothier, on the other hand, you’ll probably be working with urban types of various ethnicities. Only three retailers made Fortune magazine’s 2004 list of the “50 Best Companies for Minorities”: Nordstrom (ranked 27th), Avon Products (28th), and Safeway (34th). Overall, retail is a place where women are well represented. Still, there are plenty of places where men dominate management even while women make up a significant chunk of the workforce. In other words, the story in terms of opportunities for women is mixed and will depend on your employer. IKEA, Sears, and Target made the 2004 list of the “100 Best Companies for Working Mothers” compiled by Working Mother magazine.

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Compensation and Benefits Most people think of retail industry compensation as being low. And it’s true that the compensation can be meager for many in the industry. Think of the armies of lowwage workers manning the floors of the thousands of Wal-Marts, Staples, and Foot Lockers out there. And people in the early stages of more corporate careers in retail can make significantly less than their peers in other industries. For example, while management trainees in management consulting are making in the $40,000s and enjoying big year-end bonuses, management trainees in retail are typically making in the low $20,000s, with relatively paltry bonuses. As one insider early in her career puts it, “You don’t get into retail for the money.” But if you stick around in retail, and you’re smart about where you choose to work, you can make a nice living. It’s not at all uncommon for folks in corporate positions at big retailers to earn six figure salaries at more senior levels—and even in stores, sales staff who move into store management can eventually earn six figures at many retailers. And then there are the merchandise discounts, which can reach 40 percent off and which even the lowliest store employees enjoy. Training opportunities vary by company and job function. Smaller retailers are less likely to offer formal training, whereas large retailers tend to offer formal training as a standard feature, especially to people in sales and merchandising careers, but often to folks in all kinds of job functions. Many bigger companies offer key undergrad hires extensive training, which may include rotations through different areas of the company and exposure to a variety of career functions. Vacation-day allowances are fairly standard in most corporate positions—you’ll probably start with 2 weeks of vacation time. In hourly positions (sales positions, stock clerk positions, and the likes) at many retailers, though, you may be stuck with a measly amount of paid time off, if any at all.

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Career Path Again, the career path in retail depends on the company and the career function. In corporate areas such as marketing and finance, especially at bigger retailers, the career path is likely to be quite similar to the career path you’d find in similar functions at companies in other industries. In other words, you start in an entry-level position (e.g., marketing associate); over time you move up to a more senior level in your function (e.g., senior marketing associate); then you move into a managerial position (e.g., marketing manager), in which you have more input into strategic direction and tactical practices in your department (and quite often have to manage junior employees in your area); then you become a director; and then a vice president. In-store careers often follow a progression in which you start as a sales associate or stock clerk, then move into an assistant store manager position, then become a store manager, and then become a district manager. Buying careers typically follow a career trajectory that starts at associate buyer, then moves up to buyer, and then advances to department merchandising manager.

UNDERGRADUATES There are lots of opportunities for undergrads to start a career in retail, in areas such as store management, merchandising, and distribution, as well as in corporate functions such as HR and accounting. The bigger retailers, especially, are always looking for people to come in and learn the business.

MBAS AND OTHER GRAD-SCHOOL TYPES Some bigger retailers bring on MBAs to fill fast-track positions in finance and merchandising. If you’re an MBA thinking of working in retail, remember that, while your

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MBA peers in banking, tech, and consulting may not be impressed by your choice of careers, retail is thriving as an industry, and some of the most important companies in the world are retailers.

MIDCAREER CANDIDATES Your career trajectory will depend on your company and your career function, of course. At some companies, you’ll have the opportunity to advance via promotions. But retail is known as an industry with high turnover for a reason, and not just for instore workers; job-hopping can be a successful means to getting ahead in your career for many corporate types working in retail. If you’re a midcareer person with a desire to work in merchandising, you may be able to move into the field from an unrelated career. You’ll just have to be able to show you have the necessary skills, like flexibility, a head for numbers, a strong work ethic, good communication skills, negotiation skills, and an understanding of the retail business. You’ll also need to be willing to start at the bottom and work your way up. In other, more standard corporate departments, you may be able to move into retail from another industry without starting all over again. In other words, if you’re a highlevel marketing type at a consumer products company, you’ll likely be able to move into a high-level marketing position at a retailer.

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Insider Scoop WHAT EMPLOYEES REALLY LIKE You Set the Trends In retail, you get to see what’s coming before the consumer does; in fact, you may even help determine the next big trend. There’s something exciting about being the first to know what’s new. Whether you work in fashion retailing, or music, or books, or electronics, if you’re passionate about the kinds of products your company sells, this can be a very attractive element of the work. Depending on where you work, you may also have access to designer showrooms, fashion shows, and gala parties where designers are the guests of honor.

Such a Deal Employee discounts with retailers range anywhere from 10 percent to a whopping 40 percent. This intoxicating fact of life is often the basis for employee loyalty, particularly in high-end apparel and home-furnishings. One insider says of his first holiday season working in retail, “I’ve never gotten the people in my life such nice Christmas gifts, and I’ve never spent so little on Christmas.”

Travel Opportunities If you work in areas such as buying and product design, travel to the major markets can be a given: New York, Los Angeles, Hong Kong, to name a few, if you’re in apparel retailing. Even if you’re not in haute couture, many apparel buyers also go to Paris and Milan at least once a year, if not more often, just to keep abreast of international trends in clothes and accessories. Where you go will depend on what you buy or sell, of course.

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The Personalities Something about retail attracts zany people. As one insider says, “There are some personalities in retail.” If you like order, predictability, and decorum, you won’t be happy at many retailers. A rather twisted sense of humor thrives in this environment. Of course, this won’t be the case quite so much in more rule-bound retailers, such as Wal-Mart.

The Friendships Working in a high-pressure environment can lead to major bonding between coworkers, and this is absolutely the case in retail, whether you work in a store or in a more corporate role. As an insider puts it, “Jobs in this industry come complete with a social life. You might even meet a mate!”

WATCH OUT! Oh, You Wanted Money, Too? As one insider says, “You don’t go into retail for the money.” To get ahead in retail, you’ll be expected to put up with lots of pressure, constant change, and long hours. But you won’t be making as much money as you might for facing similar challenges in a different industry. That is, until you reach more senior and executive levels, where you can earn well into the six figures. Even at those career stages, though, the compensation may not compare to what people at similar levels in other industries make.

Quickly, Now! Quickly! It just looks glamorous. If you’re a merchandiser, you spend a good portion of your day haranguing vendors about missed shipping dates. Expect to do a lot of schlepping as well, through airports, through the stores, even through those gala parties we cited under “What Employees Really Like.” Buyers and managers have to be able to process information quickly and then act on it. If you can’t handle a fair amount of pressure,

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if you don’t like people screaming at you (“for no apparent reason, they just seem to scream a lot,” says one insider), then this is not a career path to pursue.

Not So Deep Thoughts Retail companies are not typically good places to look for deep intellectual sustenance. This industry is about things like fashion, price, and product features, not the meaning of life. In many areas, you’d be well advised not to expect your coworkers to have a deep grasp of what’s going on in world affairs, for instance. One insider says, “A lot of the people here don’t ever talk about anything except shopping, celebrities, and how many calories there are in each other’s salads. And the cattiness! There are lots of fake friendships and superficial relationships in the office.”

Inventory Shrinkage This is the polite way to refer to shoplifting, vendor fraud, and employee theft. This is a multibillion-dollar problem—and guess who accounts for most of it. That’s right, employees, not lawless shoppers. If inventory is missing, you are indeed the first and most logical suspect. Many of these places have less bureaucracy and fewer rules than corporate environments, but trust is earned and even then, not automatic. Often, one insider notes, “You’re guilty till you’re proven innocent, and usually it’s impossible to prove you’re innocent.”

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Getting Hired The Recruiting Process Requirements Interviewing Tips Getting Grilled Grilling Your Interviewer

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The Recruiting Process The recruiting process in retail varies by company, job function, and career stage. Smaller retailers—for example, the mom-and-pop store in your neighborhood—don’t really do much in terms of recruiting, other than placing help-wanted ads in the window when they need new bodies, or maybe employing an executive search firm if they need high-level help. It’s the bigger retail companies, such as those profiled in the “The Companies” chapter of this Insider Guide, whose recruiting practices we concentrate on here. Many big retailers recruit on campus for new hires. Almost invariably, they’re looking for candidates for buying and merchandising careers. In many cases, they’re also looking for candidates to fill other corporate functions such as finance, sales, research and development, IT, or logistics, as well as store-management positions. This means that big retailers can have a presence on a variety of campuses and an interest in a variety of students. For instance, retailers that want merchandising types may recruit undergrads at campuses that offer majors in retail, as well as liberal arts campuses that don’t offer a retail major. And retailers looking for high-powered finance types may recruit at toptier MBA programs. The way to know for sure how the companies you’re interested in do their student recruiting is to check out their websites, contact their recruiters, and check with your campus career center. Almost all big retailers offer internships for undergrads looking to get into retail, and some also have internships in finance and sometimes merchandising for MBAs. Internships are a fantastic way to learn more about the career you’re interested in, to learn more about what it’s like to work at a specific company you’re targeting, and to give yourself a major advantage over the competition when it comes time to interview for a full-time position at the company where you interned.

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If you’re more advanced in your career, you’ll be more on your own in terms of getting matched with potential retail employers. Now’s the time to fire up your network of contacts in the industry. You might also look into attending job fairs where retailers have a presence, networking at local meetings of industry organizations, and hooking up with headhunters who have a history of placing people like you in positions in retail.

THE INTERVIEW CYCLE For those on a campus where the retailer of interest has a recruiting presence: Most initial interviewing of student recruits is done on campus; often, this is followed by interviews at the company headquarters for those whose performance in the initial interviews is impressive. While some companies focus their recruiting efforts regionally, many of the bigger retail companies conduct national searches to find the best talent for at least some career functions. The interview process varies by company, by career level, and by career function. For example, the IT interview process at some companies may include programming tests or tests of candidates’ knowledge of specific types of computer systems. And interviews for positions in finance and accounting may include tests of the candidates’ knowledge of the Generally Accepted Accounting Principles and case questions designed to illuminate how candidates think through various business scenarios. One insider reports that her preparation involved seeing herself as a product: “I took stock of my skills and experience, I bundled them into an attractive package that clearly differentiated me from the other candidates, and I sold my product to recruiters.” An apt, if potentially dehumanizing, way for a candidate for a position in retail to think about him- or herself. To learn more about the interviewing process at the companies you’re interested in, again, check out their websites and contact their recruiters directly, and check with your campus career center if you’re a student.

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UNDERGRADUATES Successful undergraduate applicants should have a degree in retail, business, liberal arts, or a related field. The more work, leadership, and teamwork experience (in a sorority/fraternity, school club, or sports team) you can demonstrate, the better. And an internship or two will make you stand out from other candidates, because internships give you (1) the ability to talk the talk in your interviews, (2) a network of contacts who can now help you find the right full-time job, and (3) something solid you can point to when interviewers ask you, “So, what experiences can you talk about that show how deeply you’re interested in a career in retail?”

MBAS Most people don’t think of retail as an industry in which it makes sense for MBAs to make their home, but that perception is changing. Retail is a huge, thriving industry, after all, with very sophisticated marketing, finance, logistics, and other needs. Because of that, many of the bigger retailers, such as Gap and Target, have taken to recruiting MBAs for important finance and merchandising positions. Check with your campus careers office to see if your retailers of choice are coming to your campus; if not, contact them directly to express interest in working for them.

MIDCAREER CANDIDATES Changing employers is a standard means of moving ahead in the retail industry. You can apply for positions directly at the companies that have openings that meet your abilities, but of course the best way to get a new position is to have an advocate— someone from your network of professional contacts—within the company you want to work for. If you’re not in retail currently, but would like to move into the industry, take some time to think about how to use your experiences to sell yourself as a retail candidate.

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For instance, one insider we spoke with was able to talk in her interviews about how, while she had no retail industry experience, her finance and account management experiences were applicable to a career in buying, because making business decisions based on analysis of sales performance and budgetary issues is a big part of a buying career and because managing vendor relationships is also key to the career. She got the job, and with it a brand-new career.

Requirements The specific, formal requirements of retail candidates vary, again depending on the company, the career function, and the career stage. IT candidates, for example, will often have to be certified in one or more of the specific technologies they’ll use if they’re hired. Finance and accounting types will need to show their facility with numbers and understanding of how the numbers create a picture of how a business is faring (in other words, they’ll need finance/accounting experience or education). Logistics types may need an engineering or operations education and may need to be versed in Six Sigma operations practices. Visit the websites of the companies you’re interested in, contact their recruiters directly to learn more, and check with your campus career center if you’re a student. At a more general level, here’s what most retail recruiters look for when they hire at all levels: •

With the ever-increasing focus on keeping customers happy, you need to enjoy serving people and be perpetually alert as to how to serve them better. There is also a lot of teamwork in these jobs, often under fairly stressful conditions.

•

These marketplaces are constantly changing and so are the customers. The more attuned you are to the shifts, the more successful your retailing career will be.

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•

You need to be self-motivated and aggressive—whether you’re making a sale or improving the new orders and transactions systems. And when you take on new responsibilities or make decisions under deadline pressure and they don’t work out, you have to know how to handle the repercussions.

•

Perhaps even more sought after than the ability to sell just about anything to just about anyone are the problem-solving and data-analysis skills that marketing needs. You’re also eminently hirable these days if you understand technology and enjoy the architecture of systems and networks.

•

Love the store, love the merchandise it sells, love the prestige and cachet of your particular niche in the industry. The pay is low, the hours are long, and advancement is never easy. Insiders are unanimous: If you’d buy what this company is selling, you’re a much stronger potential hire.

Interviewing Tips KNOW YOUR TARGET EMPLOYERS No matter what kind of job you’re looking for in retail, you can only help your chances of landing the job you want by becoming more informed. First, of course, you should know everything you can about the companies you interview with: how the company has performed of late, the challenges facing it, its strategy moving forward, and so on. Read about the company on its website, in its annual report, in the business press. Visit its stores, and think about what’s working, and what isn’t, in terms of how the stores present merchandise or help customers. Prospective employers are always impressed when an interviewee exhibits this kind of knowledge; it shows a real interest in the company. Beyond that, you should also understand what’s happening among your prospective employer’s competition: What are the big trends in the industry, in terms of new tech-

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nologies (e.g., RFID), store-design trends, customer-loyalty programs, hot merchandise categories, and so on? How is your prospective employer performing relative to its competition, and why? Of course, if you’re interviewing with a prospective employer that’s not doing so well versus the competition—such as Kmart, which is losing out to Wal-Mart, among others, in its market segment (discount mass merchandising)— you’ll want to focus not on how and why the prospective employer is performing poorly vis-à-vis competitors in your interviews, but on potential solutions to challenges facing the company. Finally, you’ll need a thorough understanding of and interest in the type of merchandise your potential employer sells, for two reasons: 1. If you aren’t interested in the kind of merchandise your company sells, chances of you loving your job are much lower. 2. If you can convincingly convey your enthusiasm for a retailer’s merchandise category, you’ll be much more likely to persuade that retailer to hire you. (In other words, if what you really know and love is jewelry and jewelry stores, you’ll need to educate yourself thoroughly about—and learn to at least like—sporting goods before you land a job working for Sports Authority or in a Nike store.)

DEMONSTRATE YOUR COMFORT WITH CHANGE Barely controlled chaos: That’s what the retail workplace can seem like when things are busy, which is often, in many jobs and at many retailers. This is an industry that deals with a lot of unpredictable variables. Things like sudden new fads or the weather. (For instance, if it’s a particularly rainy spring where your company operates, you’d better be prepared to acquire and sell more waterproof outerwear and umbrellas than you’d planned to.) And this is an industry where performance is measured not in terms of months or quarters, but days—meaning, your employer will make merchandising decisions each and every day. Which means constant flux, almost anywhere in the indus-

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try, in every department from accounting to marketing to logistics. If you can show a potential employer that you’ve got experience dealing with the pressures caused by change—if you can show you’re not wed to one way of doing or thinking about things and aren’t bothered by changing horses in midstream, if that’s the smart move—you’ll impress retail interviewers.

PREPARE, PREPARE, PREPARE In a first-round interview, you may only have 30 minutes to tell your story. At minimum, you should have 15 stories ready to go: three examples each of leadership, teamwork, analysis, problem solving, and creativity. At least one example should focus on how you have dealt with a difficult person, and one should illustrate how you persuaded a person or a group to act in a situation in which they did not agree with you. You should also be prepared to discuss how you learned from a mistake you made. And, of course, you should be able to talk specifics when it comes to questions gauging your skills in and knowledge of the specific career function you’re interviewing for; in other words, if you’re interviewing for a finance job, you’d better be prepared to show that you know finance inside and out.

LISTEN CAREFULLY Repeat the question at the beginning of your response to confirm that you heard it correctly. You can’t afford to spend 3 minutes telling a story, only to have the interviewer say, “That’s interesting, but can you answer my question?” To help you focus on issues that are important to interviewers, frame your answers according to the following outline: 1. Situation 2. Conflict/challenge

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3. Action steps 4. Results Using this format will also help you remember your stories!

PROMOTE YOURSELF Interviews are not the place to be humble. It may be awkward for you to tell stories that focus more on “I” than on “we,” but it is essential that you articulate your specific role in an activity, event, or decision. If all of your examples describe the good work that “we” did, the recruiter will have no idea what “you” did.

CHOOSE YOUR WEAKNESS CAREFULLY One of the classic interview questions is, “Describe a weakness.” This is not the time to confess that you are disorganized or prone to procrastination. One insider reports that the safest answers to this question are either, “I have a tendency to over-commit,” or “I have struggled at times with being a workaholic.” In both instances, these observations are followed by some variation on “. . . but I’m making progress in that area.” Interviewers, of course, have heard this before, so you may be prodded to name another weakness. Whatever weakness you choose, just be sure it’s not directly related to skills that are needed to be effective in the specific career you’re interested in; for example, if you’re interviewing for a position on the sales floor, don’t talk about how you’re not really a people person.

TAKE THE INITIATIVE In many career functions in retail, you have to be assertive just to survive. Some interviewers test candidates by remaining silent and waiting to see how the candidate responds. Others turn the interview around and ask candidates to take charge of the

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interview. If the interviewer asks an off-the-wall question such as, “If you were a product, what kind of product would you be, and why?” smile first, then dive right into your answer. Whatever the situation, fortune favors the bold.

BE ENTHUSIASTIC Leave your pom-poms at home, but be relentlessly upbeat and positive throughout the course of your interview, even if your interviewer seems tired or disinterested. The stone-faced interviewer may be testing you to see how easily you are discouraged.

COMMUNICATE EFFECTIVELY Buyers must be able to communicate effectively with team members and vendors. Marketers must understand the wants and needs of customers, and be able to communicate how their employer meets those wants and needs. Finance folks need to be able to work with merchandising types to set company goals. IT folks need to interact with nontechie types to make sure systems meet business needs. Communication is important no matter where you work in retail, so expect to demonstrate your communication abilities in the interview. For instance, if you have experience making presentations, be sure to mention it.

INTERVIEW COMPANY INSIDERS Not surprisingly, insiders tell us that the best sources of information about a company are people who work for the company. If you can find a colleague who interned at the company or an alum who works there now, an informational interview can be enormously useful.

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Getting Grilled GENERAL INTERVIEW QUESTIONS Following are questions you should be prepared to answer no matter what career function you’re interested in. •

What’s your biggest strength? Your biggest weakness?

•

What appeals to you most about this position?

•

Why are you interested in this company?

•

Are you applying at any other companies? Which ones? (Be prepared to convince the interviewer that this is your top choice, and if the other companies are strikingly different, be sure you can draw a convincing connection.)

•

Can you tell me about a time when you worked on a team with people whose skill sets were markedly different from your own?

•

What personality type would you say you have the least in common with? Can you tell me about a time when you worked with such a person?

•

Describe how you have resolved a misunderstanding with a coworker in the past.

•

Can you describe an ambitious goal you set for yourself and the steps you took to reach it?

•

Give me an example of a time you didn’t meet your goal for a project. What went wrong?

•

Tell me about a time when you assumed a leadership role on a project.

•

Have you ever had to finish a project that someone else started? How did you handle that?

•

How would you describe your leadership style?

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•

How do you prefer to receive direction from superiors?

•

What skills would you expect to hone in this position?

•

Where do you see yourself in 5, 10, or 15 years? How do you plan to get there?

•

What would you say are the three consumer trends shaping the retail industry, or the hiring company’s industry segment? How should smart retailers respond to these trends?

Grilling Your Interviewer The question period at the end of the interview can be very important. You can leave a favorable impression by asking tough but thoughtful questions. Failing to ask questions suggests either that you’re not seriously interested in the position or that you are not a critical thinker. You’ll need to prepare some questions of your own, but we’ve drawn up some sample questions. Those in the “Rare” section are meant to be innocuous, whereas the “Well Done” questions will put a fire to your interviewer’s feet. Use the “Well Done” questions at your own risk.

RARE

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•

What retail companies do you consider the most innovative, and why?

•

What kinds of changes have you seen since you’ve been with the company?

•

What types of community service and philanthropic activities does the company participate in?

C AR E E R S I N R E TAI L GETTING HIRED

MEDIUM •

How is the culture of your company different from that of its competitors?

•

What, if any, international opportunities are available?

•

How have you personally made a difference at the company?

WELL-DONE •

What is the most common reason people give for leaving the company?

•

What does the company do really well?

•

What does the company need to work on?

•

If you could change three things about the company (or this particular department within the company), what would they be?

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For Your Reference Industry Jargon Recommended Reading Additional Resources

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Industry Jargon Add-on. Additional merchandise the customer might choose to purchase to accom-

pany a first piece of merchandise. For example, if a customer is buying a business suit, add-ons might include a belt or a tie. Bin. Containers for holding or displaying merchandise. Black Friday. The Friday after Thanksgiving, which is the biggest shopping day of the

year. BOGO. Buy one, get one free Bundle. A set of separate pieces of merchandise sold as a single unit. For instance,

individual toiletry products, such as a bottle of shampoo, a bottle of conditioner, a bar of soap, and a box of bath crystals, might be bundled and sold as a bath kit. Bunker. An open, refrigerated product display case. Cherry picker. A consumer who shops around for the best deals. Coffin freezer. Waist-high frozen product display case. Customer lifetime value (CLV). The projected amount of money a given customer

will spend at a given retailer during his or her life. Dead label. An EAS tag that is not activated. See also “Electric article surveillance

(EAS).” Distressed merchandise. Products that have been damaged. Dump display. A bin or table on which merchandise is dumped in a pile.

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Electronic article surveillance (EAS). Security system in which electronic tags are

attached to merchandise to prevent the merchandise from being stolen. E-tailing. Online retailing. Flagship store. A retailer’s main or most impressive store. For example, Macy’s flag-

ship store is located on 34th Street in New York City. Freestanding display. A stand-alone product display, unattached to anything else. Freestanding inserts (FSIs). The newspaper inserts that offer coupons and speed

deforestation. The average redemption on FSI coupons is 2 percent, but they are triedand-true volume drivers. Freestanding store. A store that’s unattached to a shopping center or mall. Frequent shopper program. A program that encourages customer loyalty by offering

discounts to repeat customers. Hypermarket. A combined supermarket and discount store. Impulse purchase. A purchase that was unplanned-for by the customer. Merchandise

displays at check-out counters are usually designed to encourage impulse purchases. Inventory shrinkage. Theft. Island display. Waist-high product display in the middle of a wide aisle in a retail

establishment. Keystone markup. A retail price that’s double the wholesale cost of the product to the

retailer. Live label. An activated EAS tag. See also “Electric article surveillance (EAS).” Loss leader. A product sold at not much, if any, more than cost in order to attract

customers.

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Mark-down. Reduction in price. Mark-up. The difference between the cost to the retailer of a product and the amount

customers must pay for it. Planogram. A drawing depicting the placement of products in store displays. Push money. Incentive to sales staff to push a certain product. Rack jobber. Wholesale supplier to retailer who installs, stocks, and maintains dis-

plays in the retailer’s store. Radio frequency identification (RFID). A technology that retailers and suppliers are

implementing to allow them to track inventory more accurately and in more detail. See the “Industry Trends” section in the first chapter for more on RFID. Rounder. Circular rack for hanging apparel. Sales audit. A review to see whether the record of how much merchandise was sold

during a given period matches the receipts collected during that period. Same-store sales. A comparison of a given store’s sales performance in a given period

to the same store’s sales performance during a comparable period in an earlier year, for example, the first quarter of 2005 and the first quarter of 2004. Shelf warmer. A slow-selling product. Stock-keeping unit (SKU). Pronounced “skew.” Number applied to a given type of

product for identification purposes. T-stand. A T-shaped rack for hanging apparel. Universal product code (UPC). A product’s unique barcode identification. Visual merchandising. The art and science of displaying merchandise, including win-

dow dressing.

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Waterfall display. Product display that makes it look like products are pouring out of

the display case. Wheel of retailing. Business-school theory of how successful retailers find and exploit

a niche, attract other retailers to compete in that niche, and then lose out to the competition after a period of dominance, when they lose their focus on what made them successful in the first place. Wholesale club. Business whose customers pay a membership fee to be able to pur-

chase inexpensive merchandise. Typically involves very basic, unadorned retail locations, little in the way of customer service, and larger-than-usual merchandise sizes.

Recommended Reading ARTICLES “Attention Shoppers: Great Deals in Retail Mergers” A discussion of Federated Department Stores’ acquisition of The May Department Stores, this article points to the declining relevance of department stores in the face of competition from big-box chains like Wal-Mart and Target, and how this poses a major stumbling block in the newly combined company’s success. Another potential negative, according to the story, is that, “May acquired damaged goods with its 2004 purchase of Chicago-based Marshall Field’s.” But, according to the article, Federated is doing well compared to most department store companies: “Federated has made strides in developing more efficient global sourcing, sharper fashion merchandising and more sophisticated database marketing

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programs, which will help the company hold its own against stiff competition from lower-priced retailers as well as high-end luxury brands.” And the deal means the company may “be able to cut costs and enjoy new clout with suppliers.” In addition, “The acquisition of May gives Federated a nationwide network of stores, allowing it to better compete against national discount chains such as Target and Wal-Mart, large specialty apparel chains such as The Gap and The Limited, and home furnishings stores like Bed Bath & Beyond.” Knowledge @ Wharton, 3/30/05 (http://knowledge.wharton.upenn.edu/index.cfm?fa=viewArticle&ID=1158)

“Who Gains, Who Loses, from RFID’s Growing Presence in the Marketplace?” RFID is the hot technology in retail currently, primarily thanks to Wal-Mart. As this article puts it, “In April 2004, Wal-Mart announced a pilot program that would require its top 100 suppliers to be RFID compliant”—and Wal-Mart “is boasting 100% compliance.” RFID, which consists of three basic components—“the tag (a digital memory chip with integrated transponder), a reader (senses the presence of tags, receives and processes tag-level data) and a host computer (aggregates data from tag readers and passes RFID data via middleware to core business systems)”—promises to allow retailers and their suppliers to track supply chain data with unprecedented detail. But it’s not like there aren’t potential challenges associated with the adoption of RFID. Currently, the technology is being adopted only for the suppliers-delivering-shipmentsto-retailers part of the supply chain. “The ‘holy grail’ of RFID technology will be the ability to track and monitor every product part at each stage in the manufacturing process. This could include parts from around the world, assembled in China, packaged in Japan, shipped through Europe, and distributed throughout the United States. At every point along that chain . . . there is opportunity for the process to break down, for errors to happen.”

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Beyond that, there’s the question of whether businesses can and will implement new processes to take advantage of the information they will be able to track via RFID. Finally, there are privacy concerns raised by the technology: Consumers Against Supermarket Privacy Invasion and Numbering (CASPIAN), the ACLU, the Electronic Frontier Foundation, and other groups have “issued a position statement calling for a halt to item-level tagging until formal technology assessment can take place. They are proposing federal labeling legislation, the RFID Right to Know Act, which would require complete disclosures on any consumer products containing RFID devices. Until these protections are in place, CASPIAN is encouraging consumers to vote with their pocketbooks, leading a boycott of Gillette and other companies employing itemlevel tagging and supporting the worldwide boycott of Tesco, a British retailer that uses RFID tagging.” Knowledge @ Wharton, 3/23/05 (http://knowledge.wharton.upenn.edu/index.cfm?fa=viewArticle&ID=1161)

“Supermarket Slugfest” This article looks at how Marsh Supermarkets, like other retailers, has become more “customer-centric” to remain competitive in the marketplace. “Music piped into the parking lot sets the stage for a grocery shopping experience that breaks the traditional supermarket mold. Inside, shoppers are greeted by an interactive kiosk that dispenses personalized offers when they swipe their loyalty cards. Village-styled shops, including a butcher shop, a wine room and an organic foods area, are situated around the perimeter of the selling floor. . . . State-of-the-art sound and LCD systems deliver real-time messages about store promotions, local weather—even live feeds of the Colts’ fourthquarter touchdown drive. . . . The design strategy and merchandising approach spring from an extensive study of customer shopping patterns distilled from data collected by means of Marsh’s loyalty card program.” Susan Reda, Stores Magazine, 2/05 (www.stores.org/archives/2005/02/cover.asp)

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“Amazon’s Multiple Personalities” What’s up with Amazon.com? This article will tell you. Amazon has always been controversial in terms of what onlookers think about the company, and that hasn’t changed, apparently. The company is still viewed as an online technology company by some, but more folks are looking at the company as a retailer—and a confusing one, at that. The article says, “That confusion may be understandable given that Amazon has taken on two personalities. When it comes to books and music, the company is like any other retailer building fulfillment centers and distributing goods. Other parts of its sites are like a shopping mall, where one can buy goods from partners such as Target and Toys ‘R’ Us. Amazon also sells electronics, a cutthroat business, and apparel, often through partners. In the end, Amazon becomes a department store.” The question now is whether and how Amazon can compete with other retailers with greater product and market focus and bigger economies of scale, such as Wal-Mart and Best Buy. Knowledge @ Wharton, 1/14/05 (http://knowledge.wharton.upenn.edu/index.cfm?fa=viewArticle&id=1088)

“Sears-Kmart Merger: Is It a Tough Sell?” This article provides a good overview of the recent histories of Sears and Kmart and the issues that will determine whether their recent merger will turn out to have been a wise move. According to the article, “Both Kmart and Sears bring visible strengths— and brands—into the deal. Kmart is strong in home furnishings and apparel, including such lines as Thalia Sodi, Jaclyn Smith, Joe Boxer, Martha Stewart Everyday, Route 66 and Sesame Street. Sears is well-known for its appliances—it is still the biggest appliance retailer in the United States—and also for tools, lawn and garden products, home electronics, and automotive repair and maintenance. Key brands include Kenmore, Craftsman and DieHard.” But these are two retailers that have been struggling against the likes of Wal-Mart, Target, and Best Buy, and it’s uncertain whether they’ll just be a bigger struggling retailer once combined. Knowledge @ Wharton, 1/14/05 (http://knowledge.wharton.upenn.edu/index.cfm?fa=viewArticle&id=1081)

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“Retail’s Little Guys Come Back” This article looks at retail’s “little guys,” the smaller players that are managing to hold their own against the Wal-Marts of the world (and the Amazon.coms of the virtual world). Some retailers compete by offering products the big-box stores can’t or won’t stock, such as hip, urban apparel (e.g., Urban Outfitters), high-end consumer electronics (e.g., Tweeter), risqué gift items (e.g., Hot Topic), and gourmet or health-food groceries (e.g., Trader Joe’s, Whole Foods). Others (e.g., dollmaker American Girl and teddy bear company Build-a-Bear Workshop) compete by offering product personalization and customization. Still others are competing by providing shoppers with a more enjoyable retail experience than they can get at the big-box stores, via things like innovative store design and visual merchandising. Online, it’s the “smaller pure plays like eBags and Red Envelope” that are doing well despite the success of giant e-tailers. Amy Tsao, BusinessWeek, 11/22/04 (www.businessweek.com/bwdaily/dnflash/nov2004/nf20041122_5823.htm)

“More Help Wanted: Older Workers Please Apply” This article looks at the trend among some employers to recruit older workers. While older workers can mean higher health insurance costs for employers, those costs are apparently offset by the lower training and recruiting costs associated with older workers, who have lower turnover rates than younger workers. Many big retailers, such as Home Depot, Wal-Mart, and Borders, are getting in on the hiring-older-workers game. Unfortunately, one of the reasons companies are seeing success in recruiting older workers is that more and more older folks have insufficient retirement income and health benefits. Milt Freudenheim, New York Times, 3/23/05

“The End of Toys” Recently, Toys “R” Us, which has been struggling in the marketplace, was purchased by a consortium of investors. Its struggles came in part from pressures from bigger retailers, like Wal-Mart. But this article suggests that there may have been another

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important factor involved in the company’s decline: the rise of digital entertainment. Indeed, the article says it may not be just Toys “R” Us, but the traditional toy market that has been on the decline: “With the lure of electronic media growing stronger, it may be that we have seen the end of toys.” Dan Ackman, Forbes, 3/17/05 (www.forbes.com/home/commerce/2005/03/17/cx_da_0317topnews.html)

“Les Wexner: Limited Brands” In this article, Les Wexner, founder of Limited Brands, discusses how he got into retail (opening his own store in 1963, when he thought he’d come up with a smarter strategy than his dad’s store had), how his company expanded (he leased his second store before his first one even opened), how his company came to own Victoria’s Secret (the founder of Victoria’s Secret preferred to sell to Wexner than go bankrupt), and how he got control of his company when, in the early 1990s, it was threatening to become too complex to manage (by creating a disciplined central management structure). Leslie H. Wexner, Fortune Small Business, 9/11/03 (www.fortune.com/fortune/smallbusiness/articles/0,15114,474718,00.html)

“From Products to Ecosystems: Retail 2010” According to this article, “Buying a new house involves some of the most complicated and nerve-wracking tasks anyone could possibly undertake. In a short time, the typical buyer must seek out and qualify for a mortgage, find a lawyer to handle the closing, hire a moving firm, and engage a contractor to carry out renovations. There are utilities to be turned on, security systems to be installed, appliances to be bought. And you have to arrange for insurance. What buyer wouldn’t prefer to do business with a single vendor that could make or guide every choice and organize the countless details accompanying a change of residence?” The authors of the article argue that creating holistic “retail ecosystems,” which solve all the purchase needs of specific customer types, is a major area of opportunity for retailers—one that major retailers like Staples,

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which now offers insurance, telecom services, copying, shipping, and payroll servicing in addition to office supplies, are already moving into. Jevin S. Eagle, Elizabeth A. Joseph, and Elizabeth Lempres, McKinsey Quarterly, 2000 Number 4

“2005 Global Powers of Retailing” This report of nearly 50 pages contains information about a slew of retailers, discusses the industry in various regions of the world, and looks at the key challenges facing big retailers in coming years. The top 10: 1. Dealing with changes in the global economy caused by the United States’ growing debt, which among other things should mean growth opportunities will be greater for retail operations outside the United States. 2. Understanding and meeting the individual needs of a diversity of customers in a range of different localities. 3. Optimizing the power of the Internet to better serve customers, increase efficiencies, and maximize revenue. 4. Managing PR and legal risk. 5. Optimizing supply chains via technologies like RFID. 6. Dealing with rapid industry change in areas like technology and customer preferences. 7. Differentiating from competitors by understanding what customers want and building a strong brand that responds to customers’ needs. 8. Providing a “preferred customer experience” to deepen customers’ relationships with a store’s brand and increase customer loyalty.

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9. Maximizing operational performance 10. Globalizing to respond to international retail market opportunities. Stores Magazine, January 2005 (www.stores.org/pdf/globalretail05.pdf)

“Wal-Mart’s Mega-Growth Continues, But Is Its Image Getting a Bit Tarnished?” Love it or hate it, Wal-Mart is now the standard by which all mass-market retailers are measured. As this article puts it, “Indeed, of all the retail sales in all the malls, strip centers, supermarkets and online outlets in America, 8% of them are made in a WalMart. In 2003, the average American spent $761 in Wal-Mart stores, which accounts for 32% of all disposable diapers sold through mass market stores, 30% of all photographic film, 26% of toothpaste and 21% of pain remedies, according to published reports. Retail Forward, a consulting company in Columbus, Ohio, predicts that by 2007 Wal-Mart will control 35% of the supermarket and grocery store sales in the United States and 25% of the pharmacy and drug store sales.” Just how has Wal-Mart been so successful? A marketing professor quoted in the article says, “They have focused on driving costs down and giving money back to the customer rather than putting it in the bank. . . . [And Wal-Mart] has a very simple marketing strategy. Give people really cheap prices and have friendly employees.” In addition, so far, the company has avoided potential downfalls like “dramatic changes in customer buying tastes and behaviors, organized resistance from unions and government, the emergence of new competitors and the failure of internal corporate operations to handle company growth.” But the company certainly has its critics. For example, according to the article, “City councils in states like California and Illinois have recently passed laws to block or delay the opening of Wal-Mart stores because of concerns over the company’s labor practices, pay scales and the impact its stores have on traffic congestion, competition and other concerns.” Knowledge @ Wharton, 4/21/04 (http://knowledge.wharton.upenn.edu/index.cfm?fa=viewArticle&id=965)

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“The Wal-Mart Empire: A Simple Formula and Unstoppable Growth” This article provides another look at Wal-Mart’s success and the challenges facing the company. It goes into some detail about Wal-Mart’s innovative use of technology, pointing out that it’s not just economies of scale that allow the company to offer such low prices, but its technology-driven logistics and distribution capabilities. As the article says, Wal-Mart is “one of a few companies that have successfully captured the benefits of new information technology by reengineering its entire business. It has used technology to streamline work, not simply automate existing processes.” Lately, WalMart’s big technology push has been in the area of RFID technology, “in which tiny chips embedded in products or packaging emit radio signals to hand-held receivers.” As the article puts it, “An employee could use the system to quickly count how many units of each product are on the shelf simply by walking down the aisle. The technology could streamline Wal-Mart inventory management even more than today’s scanner technology.” Knowledge @ Wharton, 4/9/03 (http://knowledge.wharton.upenn.edu/index.cfm?fa=viewArticle&id=744)

BOOKS Confessions of a Window Dresser: Tales from the Life of Fashion Simon Doonan (Penguin USA, 2001) Fab, dishy memoir by a designer of the window displays at Barney’s New York.

Designing the World’s Best Supermarkets Martin Pegler (Watson-Guptill Publications, 2003) A look at the latest trends in supermarket design, chock full of photographs.

Visual Merchandising: The Business of Merchandise Presentation Richard Colborne (Thomson Delmar Learning, 1966) This textbook covers all the essentials of visual merchandising.

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The Inspired Retail Space: Attract Customers, Build Branding, Increase Volume Corinna Dean (Rockport Publishers, 2003) A study of a variety of successful and attractive retail space designs.

Retail Design Otto Reiwoldt and Jennifer Hudson (Te Neues Publishing Company, 2000) Another look at innovative retail space designs.

Retail Management: A Strategic Approach, Ninth Edition Barry Berman and Joel R. Evans (Prentice Hall, 2003) This textbook provides an overview of the issues involved in strategic decision-making in retail, covering everything from store location to merchandise management and pricing to marketing and customer service.

Retail Product Management: Buying and Merchandising Rosemary Varley (Routledge, 2001) Textbook covering all the issues that play a role in buying and merchandising.

Sam Walton: Made in America Sam Walton and John Huey (Bantam, 1993) The story of the man who created the most successful retail organization the world has ever seen, Wal-Mart.

The Wal-Mart Triumph: Inside the World’s #1 Company Robert Slater (Portfolio, 2004) A detailed look at how Wal-Mart has grown its business during the past decade.

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The Case Against Wal-Mart Al Norman (Raphel Marketing, 2004) Another perspective on Wal-Mart’s success, this book looks at the many costs imposed on workers, society, and the environment by the retail behemoth.

Winning at Retail: Developing a Sustained Model for Retail Success Willard Ander and Neil Stern (John Wiley & Sons, 2004) The authors of this book claim that retail success comes not from trying to be all things to all customers, but from differentiating your business by excelling in one of five areas: assortment, price, fashion, customer service, or speed of service.

From Mind to Market: Reinventing the Retail Supply Chain Roger D. Blackwell (HarperBusiness, 1997) Proposes that successful 21st century retailers will evolve based on greater responsiveness to consumer desires, via a process the book calls “demand-chain management.”

Building the Customer Specific Retail Enterprise Gary Hawkins (Breezy Heights Publishing, 1999) Strategic thinking about retail frequent shopper programs.

Retailing Management Michael Levy and Barton A. Weitz (McGraw-Hill/Irwin, 2003) Textbook covering the latest developments in IT and other areas of retail.

A Stitch in Time: Lean Retailing and the Transformation of Manufacturing: Lessons from the Apparel and Textile Industries Frederick H. Abernathy, John T. Dunlop, Janice H. Hammond, and David Weil (Oxford University Press, 1999) A look at “lean retailing,” in which retailers use technology to reduce inventory risk, lower costs, and increase responsiveness to customers.

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Additional Resources

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National Grocers Association (www.nationalgrocers.org): Just what it says it is. You’ll find all kinds of information pertinent to this segment of the retail industry on this organization’s website.

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National Retail Federation (www.nrf.com): The big daddy of retail trade organizations.

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Retail Industry Leaders Association (www.retail-leaders.org): News, retail workshops, and industry forums.

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The Retail Bulletin (www.theretailbulletin.com): “The complete retail news resource.”

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RetailWire (www.retailwire.com): Retail news, discussion, and analysis. Check out the discussion boards to see what industry insiders are thinking about a wide range of retail issues, from compensation and legal issues to management strategies and consumer trends.

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Chain Store Age (www.chainstoreage.com): Industry news and information about everything from retail technology and marketing issues to store planning and industry events.

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Stores Magazine (www.stores.org): Be sure to check out the website for this publication of the National Retail Federation, which includes content from the magazine.

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