Celebrating Success
Retailers honored in annual Ernst & Young awards program
By Laura Klepacki
features
The 2012 Ernst & Young Entrepreneur of the Year
awards program recognized retailers from across
the nation. Several of the regional retail winners
are highlighted below.
Paul Grangaard
President and CEO
Allen Edmonds Shoe Corp.
This past October, Paul Grangaard, president
and CEO of Allen Edmonds Shoe Corp., guestconducted the Milwaukee Symphony Orchestra
as it performed John Philip Sousa’s famous
march “The Stars and Stripes Forever.” It was
part of a special event honoring the high-end shoe
manufacturer’s 90th anniversary, and it earned
a standing ovation from the 1,500 current and
retired employees, partners and family members
in attendance. It was an ovation well deserved,
for the company and for Grangaard himself,
About the Awards
Entrepreneurs have long been instrumental to the growth
of economies around the globe, creating innovative
products and services, as well as new jobs. The Ernst
& Young’s Entrepreneur of the Year (EOY) program,
which is celebrating its 26th anniversary in 2012,
was designed to salute the accomplishments of
these business leaders.
The EOY program has evolved into the world’s most
prestigious business award for entrepreneurs, spanning
50 countries. It encompasses 26 programs in the United
States. Thousands of individuals compete annually for the
prestigious honor.
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who has crafted a remarkable turnaround at the
quintessentially American company.
Grangaard took the helm of Port Washington,
Wis.-based Allen Edmonds in 2008, after
resigning from the private equity firm Goldner
Hawn, which had a majority stake in the company.
He had his work cut out for him. Allen Edmonds’
prospects were cloudy. Hard hit by the recession,
revenue was down. Demand was lessening for
shoes that cost upwards of $300 a pair — even
if they were made by one of the few remaining
shoe makers in the United States. (As Grangaard
frequently mentions, 98% of shoes sold in the
Unites States are made overseas.)
Grangaard put himself immediately to work. He
had to make some hard calls, including layoffs, to
get the company back on track. Strategically, he set
out on a mission to restore the company’s grandeur
as a classic American brand — Allen Edmonds’
dress shoes are made in a 212-step production
process — and reemphasize its roots.
Sensing that the company had become too
European in its product stylings, Grangaard
brought back bestselling classics that had been
discontinued. At the same time, he gave designers
freedom to try new styles that would appeal to
new customers without alienating core ones. More
casual options were added in a nod to the business
casual trend. A golf enthusiast, Grangaard was
key in bringing back a line of golf shoes, and the
company is now working with golf legend Jack
Nicklaus to create additional styles.
Methodology: EOY awards are given to entrepreneurs
across a variety of industries who demonstrate extraordinary success in the areas of innovation, financial performance and personal commitment to their business
and communities. The criteria include company
history, current stage of development, financial
growth, future prospects, business leadership,
team management and community involvement.
The judges also factor in an individual’s vision
and motivation, along with other non-quantifiable
but equally critical factors.
For more information about the program and nomination
process, call (800) 755-AWARD, or go to ey.com/US/en/
About-us/Entrepreneur-Of-The-Year.
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DECEMBER 2012
Grangaard also launched a host of new initiatives
at Allen Edmonds, including a design competition for
students at Parsons The New School for Design that
resulted in two new styles coming to market.
The turnaround has been profound. The company’s
style count has increased some 90% over the past
couple of years, and its product lineup now includes
apparel and accessories. In the last two years, Allen
Edmonds has added 200 jobs at its headquarters and
manufacturing plant.
With 41 locations nationwide, the company is also
expanding its store base. In 2013, it will open its fourth
store in Manhattan and its first in Philadelphia. New
stores are also planned for Boca Raton, Fla.; St. Louis;
and Washington, D.C. A licensing agreement will bring
the first Allen Edmonds store to China by yearend. The
company does a thriving business online (Grangaard
blogs on the site). Allen Edmonds products are also
available at upscale stores worldwide. Sales are expected
to increase 20% to $120 million this year.
Dale Carlsen
Founder, President and CEO
Sleep Train
Providing superior customer
service and quality products
at the lowest possible
prices has proved a winning
growth formula for bedding
retailer Sleep Train, which
was founded by Dale
Carlsen in 1985.
Carlsen was only 23
when he opened his first
shop on Folsom Boulevard
in Sacramento. He had
learned the business working as a salesman for a mattress
manufacturer while in college and for a year after. But
he grew frustrated by retailers who wouldn’t take his
merchandising advice. (“Take the mattresses out of plastic
bags for trial” was one of his recommendations). So he
took a gamble and went into business on his own.
It took 15 days to make his first sale. But Carlsen’s
commitment to service — including providing same-day
delivery when most stores took four to six weeks —
soon set his fledgling company apart. Radio advertising
with such famous on-air personalities as Howard Stern
also gave Sleep Train a big boost. Today, Sleep Train
is one of the top four mattress retailers in the United
States, with some $450 million in revenue. Based in
Rocklin, Calif., it is the largest mattress retailer on the
West Coast with 275 stores.
Carlsen credits his success largely to his associates.
He has focused on treating them right and making
December 2012
them successful in their own right. In 2010, Sleep
Train became an employee-owned company with the
introduction of an employee stock ownership plan
(ESOP). Carlsen encourages employee input at all
levels, and works to keep the hierarchy to a minimum.
“The family culture that runs through our company
was built on our mutual expectation of integrity, respect
and a belief in having fun, no matter what we are doing,”
said Carlsen of his staff. “My dad’s advice — that if I
wanted to be successful, I should surround myself with
great people, treat them with respect and make everyone
successful — was clearly the best business advice I have
ever been given.”
From helping out the less fortunate to supporting
the arts, Carlsen is a big believer in giving back to the
community. The company’s philanthropy ranges from
annual donations of 4,500 mattresses to needy families to
sponsoring local concert venues to help ensure music and
the arts are accessible in California.
Carlsen also has dedicated himself to helping foster
children through the Sleep Train Foster Kids program,
which raises awareness and money for foster children.
Its annual Charity Golf Classic raises money that gives
children in foster care the opportunity to participate
in such extracurricular activities as playing sports,
learning a musical instrument, going on a class field
trip or attending summer camp, where they are often
reunited with siblings.
Andrew T. Mack
Founder, Chairman and CEO
Teavana Holdings
Andrew T. Mack and his
wife were traveling abroad
in 1996 when they became
fascinated with the way other
cultures embraced tea. Out of
that trip came the inspiration
for a multi-million dollar
specialty tea and tea-accessory
empire: Teavana Holdings.
(At presstime, Teavana was
acquired by Starbucks Coffee
Co. for $620 million. Mack will
continue to lead the company’s day-to-day operations.)
Eager to introduce U.S. consumers to the tea lifestyle
he had encountered abroad, Mack, a former Applebee’s
manager, and his wife opened the first Teavana in
1997, in Atlanta. The concept was designed to offer tea
connoisseurs and new enthusiasts alike a “Heaven of Tea”
retail experience where passionate and knowledgeable
“teaologists” would engage and educate consumers
about the ritual and enjoyment of tea. With no direct
competition, Teavana flourished, expanding steadily.
Today, the Atlanta-based business operates more than 284 >
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Retail Entrepreneurs of the Year
company-owned stores in the United States and Canada,
many in major shopping malls, and 18 franchised stores
in Mexico. Stores carry some 100 loose-leaf teas, along
with an assortment of related merchandise.
Mack has made employee training a key priority.
Indeed, a focus on tea education and history sets
Teavana apart, and interaction between staff and
customers is highly encouraged. For its employees, there
is extensive training, career development and individual
enrichment programs.
Teavana, which went public in 2011, keeps things
fresh with seasonal tea collections and accessories. With
the hiring of former Gap executive John Aylward as
VP marketing, Mack hopes to tap into new marketing
synergies and take the brand to the next level.
During fiscal 2011, net sales grew 35% to $168.1
million. For fiscal 2012, net sales are projected to reach
$208 million to $215 million, helped by the addition of
60 new stores, 38 of which are already opened. Teavana
is planning for 500 stores by 2015, and is entering the
Middle East through a franchise deal.
In a partnership with CARE, Teavana donates 1% of its
annual profits to help fund education, access to safe water
and economic development in tea-growing regions, such
as Sri Lanka, South Africa and India.
Jay Schottenstein
Chairman and CEO
DSW Inc.
Jay Schottenstein, a retail
magnate, wields wide
influence. Since joining
Schottenstein Stores Corp.
in 1976, he has spent the
past 36 years building
and expanding upon the
portfolio of the businesses
founded by his father.
He wears many hats and
currently serves as chairman
and CEO of Schottenstein
Stores; chairman of Schottenstein Property Group; and
chairman of SB Capital Group, a retail liquidator.
In addition, he is executive chairman of American Eagle
Outfitters and chairman and CEO of American Signature
Inc./Value City Furniture. And, not to be forgotten, he is
chairman of DSW (Designer Shoe Warehouse), a fastgrowing, $2.02 billion specialty shoe empire.
Starting out with one store in 1991, Columbus,
Ohio-based DSW has expanded to 363 stores in
41 states (the company also manages 345 leased
departments for other retailers). It was taken public
in 2005, and Schottenstein served as its CEO from
then until 2009, when the role was passed to Michael
MacDonald. In 2011, DSW acquired its chief
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investor, Retail Ventures, in a tax-free stock swap.
(Schottenstein Stores had held controlling interest
in Retail Ventures, which also once owned Filene’s
Basement and Value City Department Stores.)
At DSW, Schottenstein helped forge an operating
model focused on assortment, convenience, value and
growth. It’s a message that has resonated with shoppers.
For the first half of fiscal 2012, sales grew 9.3% to $1.07
billion. DSW is on track to open 35 to 40 stores this year.
Schottenstein, who presides over DSW’s 11-member
board and the company’s seven-member management
team, has a reputation for finding opportunities. He has
long believed that the key to success “is having the right
people around you.”
Giving back is central to the retail veteran, who has
been a philanthropist throughout his career. He and his
wife Jeanie are active members and donators to a number
of charities in his home community of Columbus, Ohio.
Glenn Lyon
CEO and Chairman
The Finish Line
The company he heads up
may be called The Finish
Line, but there is no end in
sight for Glenn Lyon, CEO
and chairman of the $1.37
billion athletic footwear and
apparel retail powerhouse.
With more than 660 stores
in 47 states and 11,000 ‘sneakerologists,’ under his
watch, the chain recently inked an agreement with
Macy’s that will see it open branded Finish Line shops
in more than 450 Macy’s doors and manage the athletic
footwear in 225 others. The deal is expected to give
Indianapolis-based Finish Line an additional $250
million to $350 million in sales annually and expand
its reach.
This isn’t Lyon’s first run at Macy’s. He began his
retail career in the department store company’s executive
training program in 1975, and eventually rose to VP
merchandising. Lyon continued his retail career with
senior posts at TJX Cos., Ormond Stores and Modern
Woman Stores. Prior to joining Finish Line in 2001 as
executive VP and chief merchandising officer, he was
president and CEO of Paul Harris Stores.
Lyon was promoted to president of Finish Line in 2003.
In 2008, he was appointed CEO. Two years later, he
added the title of chairman.
Lyon is credited with returning Finish Line’s focus
to — and reinvesting in — its core operations. The
chain reduced its costs during the recession and started
running its business more efficiently. In recent years,
Finish Line has capitalized on being a destination for
premium athletic footwear in the latest styles. It enjoys >
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Retail Entrepreneurs of the Year
a dedicated following among its 18- to 29-year-old core
customers who care less about price than they do the
best product both in style and performance.
Under Lyon’s leadership, the company has also
upped its profile: The Pacers Sports & Entertainment
and the Indiana Fever recently entered into a
partnership with Finish Line that will feature the
Finish Line logo on Fever team jerseys beginning
in the 2013 season. The Finish Line brand will be
integrated into Fever television broadcasts and
highlights, team advertising and signage at Bankers
Life Fieldhouse.
Lyon and his team also put in place a strategically
driven corporate social responsibility program that
includes a multi-year, multi-million dollar commitment
to the Special Olympics through the company’s Finish
Line Youth Foundation. The foundation has raised
millions for children’s organizations.
Kyle J. Krause
President and CEO
Kum & Go
It wasn’t family connections
that put Kyle J. Krause in the
executive suite at Kum & Go
in 2004. Instead, it was his
business drive and acumen
that got him appointed
CEO and owner of the West
Des Moines, Iowa-based
convenience store chain that
his father and grandfather
co-founded in 1959.
Krause, who joined the
family business in 1997, has been the main driver of the
company’s recent growth. Under
Krause’s leadership,
Kum & Go has grown to more than 400 stores in
11
states, with annual revenues of $2.6 billion. The
chain ranks as the
fifth largest privately held, companyoperated convenience store chain in the United States,
and employs nearly 4,000 associates.
Krause is a firm believer that to stay successful, a
business must embrace change. He has led the charge in
all areas, including store innovations. New stores feature
expanded product selection, a more customer-friendly
layout, a center checkout area, greater emphasis on fresh
food and more variety in fuel offerings at the pump.
Another distinguishing feature: sustainability. New stores
are designed and built with LEED (Leadership in Energy
and Environmental Design) certification in mind.
Krause has maintained a strong corporate culture, one
centered around such principles as integrity, teamwork,
caring and excellence. Employee development and
retention is a high priority. Kum & Go associates are
uniformed in a dress shirt and tie, and are expected to
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greet customers.
A dedicated community business leader, Krause
keeps the company close to the community by annually
donating 10% of its annual profits to charitable and
educational causes.
“We’re passionate about the communities we serve,”
Krause said. “We demonstrate that passion first by bringing
an eco-friendly store. And, second, by giving back.”
Krause’s business interests don’t end with Kum
& Go. He is also the owner of Solar Transport, the
largest Iowa-based refined fuel transporter. And he
holds majority ownership of the Des Moines Menace, a
Premier Development League soccer team.
Earl J. Hesterberg
President and CEO
Group 1 Auto
Earl J. Hesterberg spent
many years tuning up his
automotive knowledge at
Ford, Nissan and Toyota,
before being tapped by Group
1 Auto in 2005 as its president
and CEO. He brought wideranging experience in sales
and service across domestic
and foreign car brands, having been VP sales for
Nissan Europe and co-VP North American marketing
and sales and service of Ford Motor Co.
When the U.S. car market stalled with the
recession, Hesterberg steered Group 1 to financial
stability and laid groundwork for future growth by
moving quickly with tough decisions. The Fortune
500 Company cut its dividend, reduced other costs
and slowed down expansion plans to preserve cash.
At Hesterberg’s direction, it also repurchased bonds
reducing its debt.
Once stabilized, Hesterberg focused on diversifying
the company’s portfolio with dealerships across
geographic areas as well as brands, and brought
in more foreign models. An emphasis was put on
increasing profits by building up higher-margin
businesses, including car repair services, and financing
and insurance plans.
Today, Group 1 is the country’s fourth-largest
dealership group. Based in Houston, it owns and
operates 121 automotive dealerships, with 158
franchises and 30 collision centers in the United States
and U.K. It sells 32 brands of new and used cars and
light trucks. Fiscal 2011 was its best yet, with sales up
10.4% to $6.1 billion.
Among other honors, Hesterberg was recently
inducted into the Junior Achievement of Southeast
Texas Hall of Achievement, for his dedication to youth
education and pursuit of free enterprise.
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