Case 4: Massengill's Department Store
Case 4: Massengill's Department Store
Massengill's Department Store had been a fixture in small and mid-sized cities across the Southeast for 75 years. But for the past couple of decades, the Atlanta-based chain had been slowly going downhill. Once a cutting-edge retailer, Massengill's had come to be known primarily for its dilapidated stores and dowdy-looking clothes. Everyone knew the chain was on the verge of bankruptcy. But that was before Marv Heimler. Heimler had been lured away from his job running a nationwide chain based in Dallas-Fort Worth to rescue Massengill's. And rescue it he had. Massengill's was now the talk of the retail industry, thanks to its soaring sales and accompanying surge in stock price.
Heimler had been offered a generous compensation package that was tied to his performance in leading Massengill's through a rapid turnaround. And, indeed, Heimler realized he had no time to lose if Massengill's was to survive. He came in with an aggressive plan for change that included remodeling shabby stores, cutting overhead costs, and offering modern, trendy merchandise sold by sophisticated, knowledgeable sales associates. "Link selling," in which shoppers enter the store looking for one item but end up leaving with three or four, was an important part of the new strategy. Unfortunately, the new strategy also meant layoffs were inevitable. Massengill's had long been run by old-fashioned, patriarchal managers who had held fast to their no-layoffs policy. However, to save the company meant aggressively slashing costs and investing the savings in remodeling, new merchandise, and training programs. Closing the in-store snack bars and consolidating distribution centers were the first steps, which eliminated about 500 jobs. In addition, many of the long-time salespeople had neither the abilities required for link-selling nor a feel for the chic, sophisticated clothing Massengill's was now offering. Heimler knew he had to cut out the "deadwood" (a term
Massengill's Department Store had been a fixture in small and mid-sized cities across the Southeast for 75 years. But for the past couple of decades, the Atlanta-based chain had been slowly going downhill. Once a cutting-edge retailer, Massengill's had come to be known primarily for its dilapidated stores and dowdy-looking clothes. Everyone knew the chain was on the verge of bankruptcy. But that was before Marv Heimler. Heimler had been lured away from his job running a nationwide chain based in Dallas-Fort Worth to rescue Massengill's. And rescue it he had. Massengill's was now the talk of the retail industry, thanks to its soaring sales and accompanying surge in stock price.
Heimler had been offered a generous compensation package that was tied to his performance in leading Massengill's through a rapid turnaround. And, indeed, Heimler realized he had no time to lose if Massengill's was to survive. He came in with an aggressive plan for change that included remodeling shabby stores, cutting overhead costs, and offering modern, trendy merchandise sold by sophisticated, knowledgeable sales associates. "Link selling," in which shoppers enter the store looking for one item but end up leaving with three or four, was an important part of the new strategy. Unfortunately, the new strategy also meant layoffs were inevitable. Massengill's had long been run by old-fashioned, patriarchal managers who had held fast to their no-layoffs policy. However, to save the company meant aggressively slashing costs and investing the savings in remodeling, new merchandise, and training programs. Closing the in-store snack bars and consolidating distribution centers were the first steps, which eliminated about 500 jobs. In addition, many of the long-time salespeople had neither the abilities required for link-selling nor a feel for the chic, sophisticated clothing Massengill's was now offering. Heimler knew he had to cut out the "deadwood" (a term