March 2019 HTSAAIL™ of the Month - Sam Walton
Sam Walton- His Biggest Failure Led to Walmart’s Biggest Success.
Our HTSAAIL of the Month for March 2019 is Sam Walton.
Sam Walton was the founder of Walmart. Today Walmart is one of the biggest multinational discount department and grocery stores and the 3rd largest employer in the world.
But did you know that before a chain of discount department stores, Sam Walton owned a variety store that he ran successfully that he attributes as one of his biggest failures?
Back in 1945, in the town of Newport, Arkansas Sam Walton purchased a Ben Franklin Variety Store. His goal from the beginning was to be the most successful and profitable store in the region. In just 5 years, Walton achieved his goal. His variety store was grossing over $250,000 a year with a net profit of $30,000- $40,000.
But like every entrepreneur’s story, there are road blocks and failures. When Sam was just beginning his Ben Franklin store, he signed a lease with his landlord that included a 5% kickback of the sales (which was unheard of that time) and did not included an option to renew his lease after 5 years.
By 1950, the landlord refused to renew Sam Walton’s lease which allowed the landlord to take over the successful store and Sam had no choice but to give up his prized success.
This was the absolute lowest point in Sam Walton’s life. As he states
“I felt sick to my stomach. I couldn’t believe it was happening to me. It really was like a nightmare. I had built the best variety store in the whole region and worked hard in the community, done everything right, and now I was being kicked out of town. It didn’t seem fair. I blamed myself for ever getting suckered into such an awful lease, and I was furious at the landlord….”
At that moment it came down to a choice: give up and sulk in the failure or pick up the pieces and set up his own shop in a whole new area. We all know what Sam Walton decided to do. BUT what if Sam Walton decided to quit the retail business entirely? How different would our retail landscape be? One thing we know for a fact is that a company worth over $400 billion and employs over 2.3 million would not be around.