W. T. Grant

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This article is about W. T. Grant stores, for the namesake founder, see William Thomas Grant

W. T. Grant was the name of a chain of United States-based mass-merchandise stores founded by William Thomas Grant. The stores were generally of the dime store format located in downtowns.

In 1906 the first "W. T. Grant Co. 25 Cent Store" opened in Lynn, Massachusetts. Modest profit, coupled with a fast turnover of inventory, caused the stores to grow to almost $100 million a year in sales by 1936, the same year that William Thomas Grant started the W. T. Grant Foundation. By the time Mr. Grant died in 1972, at age 96, his nationwide empire of W. T. Grant Stores had grown to almost 1,200.[1]

Grant's stores were slower than the Kresge stores to adapt to the growth of the suburb and the change in shopping habits that this entailed. The attempt to correct this was belated; by the late 1960s there were some "Grant City" stores, but unlike Kresge's Kmart they were not of uniform sizes or layouts, meaning that a shopper in one did not immediately feel "at home" in another. The chain's demise in 1975 was in part due to a failure to adapt to changing times but was probably considerably accelerated by management's refusal until it was too late to eliminate the shareholder dividend; even after the company began to lose money, funds were borrowed to pay the quarterly dividend until this became impossible. A last-gasp tactic to stay in business involved requiring each Grant's clerk and cashier unfailingly to offer a Grant's credit card application to customers in order to boost sales in the stores.

Grant's store-branded electronic and other goods were "Bradford" after Bradford County, Pennsylvania, the county where William Thomas Grant was born.

Canadian retailer Zellers concluded a deal with the W.T. Grant Company. The Grant Company was allowed to purchase 10% of Zellers common shares, and was given options that eventually translated into a 51% effective ownership of Zellers in 1959. In return for this, the "Grant Company [was] making available to Zellers its experience on matters of merchandise, real estate, store development, and general administration". Zellers employees were sent to Grant stores and head office for training and together they made common buying trips to the Orient, a practice that benefited both companies. By 1976, the Grant Company withdrew from Zellers.[2]

[edit] The End

The W. T. Grant story ended in 1976 in the second biggest bankruptcy in US history[3]. While there is some argument over exactly which combination of decisions caused this, all these decisions were made by an unchecked management layer and the bankruptcy is considered the beginning of the idea that US company directors had complete control over their company and no obligation to the company's shareholders to make 'the best' decisions to maintain company value and survival.[citation needed]

The most apparent cause of the bankruptcy was the company's decision to extend store credit to all customers, with no (sic) attempt made to assess the customer's ability to repay. This initiative was made in 1969, during a prosperous period in the US' history, and at a time when Grant was expanding into new areas of the US and hopeful of stealing customers from rival Kresge and other department-store companies. The low number of defaulters on small loans at this time meant that the credit arrangements looked like a good idea, but the complete absence of any credit check, and the low minimum repayment terms offered by Grant were extreme, even for the times. When the economic expansion slowed in 1970/1971 the balance changed and the credit arrangement became more of a liability than an asset. Nevertheless no decision was made to change or halt before 1974 when the company's collapse was already a certainty.[citation needed]

[edit] References

  1. ^ W.T. Grant Foundation biography of William Thomas Grant
  2. ^ Zellers history
  3. ^ Glasberg, Davita Silfen. The Power of Collective Purse Strings: The Effect of Bank Hegemony on Corporations and the State. Berkeley: University of California Press, 1989. [1] "Chapter Two— W. T. Grant: The Social Construction of Bankruptcy" [2]

[edit] External links