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The Stein Mart saga: A personal perspective

Jay Stein shares his philosophy and some practical advice with an audience at the University of Tampa.

JEFF HARRINGTON
Published October 16, 2004

TAMPA - Twenty years ago, Stein Mart chief Jay Stein was in a quandary. His small but expanding retail chain had outgrown its headquarters in the tiny Mississippi town of Greenville.

He set his sights on Florida and turned, specifically, to Jacksonville, where the company had just opened its eighth store.

"Had Store No. 8 been in Tampa, (our headquarters) might very well have been here," Stein said Friday, appearing as the featured speaker at the University of Tampa's recurrent Florida Entrepreneur series.

Today, Stein Mart is known coast-to-coast with 270 locations and $1.4-billion in annual sales. About 15 percent of its stores are in Florida.

Amid dozens of variations, Stein Mart has remained remarkably close to the vision it had when it was created 99 years ago: as a hybrid of the discount store and department store.

Over the decades, any changes have been a matter of tweaking, Stein said. "The company that doesn't tweak itself is in trouble."

The biggest tweaks were recent ones as the company shuffled management, embarked on a new marketing focus and tried to overcome increased competition.

Like many retailers, Stein Mart stumbled after 9/11 and took two years to recover. It closed 16 stores and opened only 12 in 2003.

But Stein, who stepped down as chief executive two years ago while remaining chairman, said the company has rebounded. In its latest quarterly earnings, Stein Mart reported $5.7-million in net income, compared with a net loss of $2.8-million in the year-ago quarter. Sales were up 6.5 percent.

Perhaps most encouraging, same-store sales in September were up 5.5 percent from a year ago despite an estimated $5-million hit from lost sales days because of Florida's hurricane barrage.

The setting of Friday's get-together was of the fireside chat variety: two easy chairs and potted plants set on a stage in the University of Tampa's Reeves Theater.

Joe McCann, dean of UT's Sykes School of Business, sat in the second easy chair, firing questions. McCann said the atmosphere was intended to put the speaker at ease in relaying tales and lessons from the front.

Stein, 59, told about 50 attendees that he had developed a list of basic principles in business:

Grow slowly, one store at a time at the beginning. Don't stay up nights worrying about things you can't control. Learn to dream. Be thankful to everyone who is part of your business. And, most of all: Surround yourself with good people.

In Stein's case, the latter principle includes Tampa native Michael Fisher, Stein Mart's chief executive. It also includes his wife, Deanie, who worked for Stein Mart 15 years in marketing and advertising and accompanied him to Friday's event.

Stein's speech was tied to Friday's release of a corporate biography published by University of Tampa Press, Stein Mart: An American Story of Roots, Family, and Building a Greater Dream.

The 167-page book was written by historian and former banker David Ginzl. Three years ago, Ginzl wrote a Florida corporate bio detailing the history of his former employer, Barnett Bank, before it was acquired by what is now Bank of America.

Ginzl said he spent 18 months interviewing Stein family members and store employees to chronicle the Stein Mart saga. His tale begins in 1905 when Sam Stein, a young Jewish immigrant from Russia, arrived in New York with $43 in his pocket. Stein sold household goods door-to-door, then eventually opened a store.

Sam's oldest son, Jake, took the family business a step further, expanding Stein's Self Service Store to a whole city block. The family needed a name for their expanding enterprise. One day, Jay Stein's uncle said he heard of a retailer in Arkansas named Sam Walton who was opening a business. "He's calling it Wal-Mart. Why don't you call yours Stein Mart?" his uncle suggested.

Jake's only son, Jay, had a different vision for the family business than his father. He saw possibilities for a multistore franchise, pushing against his Dad's wishes to expand outside Mississippi. A second Stein Mart opened in Memphis in 1977; Store No. 3 opened in Nashville two years later.

Stein Mart went public in 1992, fueling its expansion past the 100-store mark.

Stein told the Tampa audience he had no second thoughts about leaving day-to-day management. Even though he remains the largest shareholder in the retail chain with about a 40 percent share, Stein says he is reluctant to wield that authority.

With one recent exception, about a year ago.

When Stein Mart was mulling over an ad campaign, the favorite to get the job was a large ad agency from Atlanta. But Stein preferred a pitch from a small Orlando agency, Fry-Hammond-Barr. Most of the campaign pitches involved beautiful models and fashionable apparel. Fry instead traveled to Stein Mart's original hometown in Mississippi and interviewed loyal customers speaking directly into the camera about why they loved Stein Mart.

"Nobody liked it but me," Stein said. "It got a little steamy in the office. It was the first time I had to assert the fact that I'm the largest shareholder in the company."

Stein offered to try both campaigns, but the larger ad agency didn't go for it.

"It came back to this small agency and they knocked the ball out of the park," Stein said. "I got lucky."

Jeff Harrington can be reached at harrington@sptimes.com or 813 226-3407.

THE STEIN VIEW

Stein Mart Chairman Jay Stein . . . On dealing with Wal-Mart: "Anybody who gets in the way of Wal-Mart is in trouble. Fortunately, we're not in their way. We play in a different sandbox."

On Winn-Dixie's struggles: "It's a shame what's happening to that venerable old company run by friends of ours from Jacksonville."

On being comfortable with his store's medium-sized, national footprint: "You've got Kmart. That is a battleship. Stein Mart is a destroyer."

On an industry slump: "I think the retailers are continuing to struggle. We're fortunate to be a bright spot."

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