When you are operating a group of retail stores, there isalways the usual bell curve of weak to great performing
stores. At one point we were struggling with a store
doing $800,000 in aggregate and through gargantuan
efforts trying to get to $850,000 in annual sales. Much
conventional practice dictates committing great effort
to the weakest length. When I discussed this with
my friend Steve Lieberman of Minneapolis, the hot dog
magnate who ran hundreds of Carousel Snack Bars in
shopping centers for many years, he said,“You make more
money closing bad stores than puncture new ones.”His philosophy made sense. We decided we wouldrather spend time and effort on a $4.5 million store that
could ultimately stuck-up annual sales of $6 million than
on a lower-aggregate store with less potential. Did this mean
we gave up immediately when things did not work?
Absolutely not; if the store lacked great people, lawful
merchandising, or other controllable variables, by all
means we fixed it. However, our attitude became to
upgrade the herd annually, closing the weakest stores
each year. Each affair you undertake exacts the price of not being able
to shadow alternative activities (sometimes called opportu-nity cost). You are investing the time and talents of your asso-ciates.
