Talk About a Local Boy Making Good! Sam Walton, the King of Wal-Mart, Is America's Second-Richest Man
updated 12/19/1983 AT 01:00 AM EST
•originally published 12/19/1983 AT 01:00 AM EST
Well, a little amplification seems called for. When Sam says "done it," what he means, in his simple way, is that he is the second-richest man in America. In September Forbes magazine assessed his net worth (with his family) at $2.15 billion, putting him behind only oil magnate Gordon Getty, who inherited his.
And yet, as the celebration suggested, what's probably more impressive is that success apparently hasn't turned the man's head a bit. You will find no vast estates, no polo ponies or Maseratis in Sam M. Walton's neighborhood. "The money is not big stuff to him," insists Bob Bogle, a friend and 25-year employee of Walton's. In fact, "Mr. Sam," as he is known locally, is something of a folk hero to residents of Bentonville and employees of Wal-Mart (many of whom are the same). He still drives his 1980 Ford pickup and his 1976 Chevrolet Impala around town and stops frequently at the local Holiday Inn coffee shop to chat with friends. His few indulgences include a Piper Aztec prop plane, which he flies to store visits, a beloved tennis court adjacent to his glass-and-stone Bentonville house, and frequent quail hunting trips. "Sam Walton is totally devoid of pretense," says Bob Cheyne, president of Bentonville's leading ad agency. "There's absolutely no tinsel."
The story of Mr. Sam and Wal-Mart will surely go down in the annals of America's great business successes. Since 1962, when Walton opened his first Wal-Mart Discount City in Rogers, Ark., the little-known chain has blossomed to 642 stores that now dot small towns in 19 states, selling everything from ironing board covers to stereos. Wal-Mart currently is the eighth largest retailer in the U.S. (ahead of Macy's), and some say it will challenge No. 1 K mart within 10 years. As recently as 1972 there were only 64 Wal-Marts, which pulled in respectable sales of $125 million. By last year volume had soared to $3.4 billion.
The company's boom has benefited Walton, to say the least. In the 1982 bull market Wal-Mart stock climbed 216 percent. Sam netted a tidy $301 million profit, and his four grown children made $297 million each. Together they own 42 percent of the stock.
Walton's down-to-earth approach has also served Wal-Mart well. Raised in adjacent Missouri, one of two children of a farm-mortgage broker, Thomas Walton, Sam graduated from the University of Missouri in 1940 with a major in economics. After two years with J.C. Penney and a stint in the Army, Sam, 27, used his savings and a loan to open a Ben Franklin variety store in Newport, Ark. When the young man lost his lease five years later, in 1950, he and his family moved to Bentonville, where he started Walton's 5 & 10 and began to prosper by offering quality goods at discount prices. During the 1950s Sam and his younger brother, J.L. "Bud" Walton, added 14 more stores. After a few nationwide trips to observe mass-merchandising techniques, Sam decided to go ahead with his idea for a big discount store. "I thought that larger stores could be put in smaller towns than anyone had tried before. There was a lot more business in those towns than people ever thought," Walton later explained, in what could rank as one of his richer understatements.
Now Sam is taking a variation of his operation to the big burgs. Last April he launched a fairly revolutionary division called Sam's Wholesale Club. Open only to business and individual groups, the clubs feature high-quality fashions (including Pierre Cardin and Gucci), appliances, groceries and a host of other items at reduced prices. The first clubs are operating in Oklahoma City, Kansas City, Mo. and Dallas, and business is brisk.
Much of Walton's success stems from his ability to weld strict managerial policies to old-fashioned company spirit. His weekly Saturday morning management meetings start promptly at 7:30. Walton can sometimes be heard yelling, "Give me a W! Give me an A! Give me an L!" until he gets a deafening "Wal-Mart!" from his managers. He calls his employees "associates," and his managers wear buttons proclaiming, "Our people make the difference."
Walton practices what he preaches. He makes regular "grass roots" visits to his salespeople; half of what the company saves in reducing shoplifting and errors is returned to associates—up to $200 apiece last year; Wal-Mart's profit-sharing plan is one of the best in the business. For its consumers, the chain gives each year a $1,000 college scholarship to a high school senior in every Wal-Mart community. Walton also loves to encourage old-time retail razzle-dazzle such as having paratroopers drop into the parking lot of a store celebrating an anniversary. Explains Jack Shewmaker, president of Wal-Mart, "People like to shop where something is happening."
Sam Walton's "hands-on" management style has earned him praise in the best-seller In Search of Excellence: Lessons From America's Best-Run Companies. Most of his associates would be the first to agree. One night, for instance, Walton couldn't sleep. At 2:30 a.m. he got up, bought four dozen donuts at an all-night bakery and took them to one of his distribution centers, where he chatted with workers on the shipping docks. There he discovered that two more shower stalls were needed at the location and had them put in. Such involvement has paid human as well as financial dividends. Arkansas' Sen. David Pryor remarked amiably after the Walton Day celebration that the only thing Bentonville didn't do for Sam and Helen Walton was to rename the town after them. Maybe next year.