Empty Big Bear offices on 851 West 3rd Avenue
Empty Big Bear offices on 851 West 3rd Avenue
Former execs say Big Bear mauled by parent firm
Business First of Columbus – May 16, 1997 by Kathy Hoke
Big Bear’s recent troubles point in one direction — to New York and the investment banker who controls the supermarket chain’s parent company, say two former Big Bearexecutives.
"When I left eight years ago, we had the best team in Columbus, and this guy from New York has absolutely decimated the company," said Michael J. Knilans, president and CEO of Big Bear Stores Co. from 1976 to 1989.
"This guy" is Gary D. Hirsch, chairman of Syracuse-based Penn Traffic Co., which bought Columbus-based Big Bear in 1989 in a hostile takeover.
Knilans and former Vice President of Operations Richard Vogel were interviewed May 13, the day Penn Traffic announced the sacking of folksy Big Bear President Stephen Breech, 141 other Big Bear employees in the company’s Grandview offices and four other Penn Traffic division heads as part of a corporate restructuring.
"He bought a jewel and proceeded to run it into the ground," said Knilans, an Upper Arlington resident who serves on two supermarket boards. "He has micro-managed a company that didn’t need to be micro-managed. When I left we had million in the bank. Now the company has 1/2 billion in debt."
The problems at Big Bear, Knilans said, include declining sales and rising prices aimed at helping Penn Traffic pay its debt.
Hirsch, he said, "did everything contrary to good business practice."
Knilans’ criticism of Penn Traffic and Hirsch were echoed by Richard Vogel, who was vice president of operations for Big Bear under Knilans.
"The man who took over never understood the business or the market and proceeded to ruin the company," Vogel said of Hirsch. "An awful lot of good people are losing their jobs through no fault of their own. It upsets me to no end."
Attempts to reach Hirsch were unsuccessful, but Penn Traffic spokesman Marc Jampole said the company would not respond to criticisms of its chairman.
Jampole, based in Pittsburgh, said Penn Traffic has helped modernize Big Bear operations with a centralized computer system and the creation of a nonfoods warehouse system in Columbus for the entire chain.
In addition, he said, Big Bear has benefited from Penn Traffic’s new low-price advertising campaign, featuring red and yellow tags in the stores.
Consolidation in the grocery industry over the last 10 years made Big Bear’s independence unlikely.
"No one could predict what could happen," Jampole said, "but it’s pretty clear Big Bear as an independent company would have had a hard time competing and has an easier time competing as part of Penn Traffic."
Supermarket chains and other retailers have been moving toward centralized management, says Mark Husson, a supermarket analyst for J.P. Morgan in New York. American Stores buys national brands for its Acme stores from its Salt Lake City headquarters. Wal-Mart also has centralized its buying and management.
"You can get much better prices, and you can buy in bulk," Husson said.
The layoffs, part of a restructuring announced by Penn Traffic May 13, end a 63-year history of Big Bear as Central Ohio’s only locally grown and managed chain. Four other units of Penn Traffic in New York and Pennsylvania also lost local management and support staff in the centralization of the company.
In 1934, Big Bear founder Wayne Brown opened the first full-service supermarket in the Midwest on Lane Avenue near Ohio State University. By the late 1980s, the company had annual sales of more than billion.
But as a publicly traded company with more than 80 percent of its stock owned by banks and other institutional investors, Big Bear could not stave off a buyout of the company in 1989, Knilans said.
When Penn Traffic bought Big Bear in 1989, Knilans and Vogel had three years remaining on their contracts, but said they gladly left when Hirsch offered to buy them out. Both said they declined to buy shares of Penn Traffic, then trading around a share, but trading at .38 a share at the close of May 13.
"He’s a banker, not a retailer," Knilans said.
Breech was a district manager for Big Bear when Knilans and Vogel left the company.
"He is one of the finest men I’ve ever worked with," Vogel said of Breech. "To treat a talent like that and not be able to use it, it really upsets me."
For Vogel, who started as a carryout boy at a Big Bear in Lancaster in 1950, the company he knew ceased to exist several years ago.
"I said a long time ago: It was Big Bear in name only," he said. "The signs up there say Big Bear, but it’s not the Big Bear the customers knew."
Breech said Big Bear was among the top 10 grocery chains in the late 1980s, but it and the other grocery chains Penn Traffic acquired in recent years have floundered.
"What’s really wrong with them is they have too much debt. When your number-one focus is how to pay the mortgage, it changes the way you do business," Breech said. "There’s no trick to this business. You just have to sell groceries."
Image by TheeErin
Ins Loan loans great lakes lowest debt consolidation loan
http://bit.ly/hvoUHg – by cegipozazady (Fuck With The )
Stretch Workout | Credit Repair Facts: A Few Pointers On How To Avoid Being Ripped-off When Selling Gold Jewelry ยท… http://goo.gl/Lj6t1 – by creditdebtweb (credit debt web)
Debt Consolidation Home Equity Loans – Are They Right For You? http://bit.ly/i3o3IG – by Maddie84071 (Maddie Intermill)
Slash Your Debt: Save Money and Secure Your Future -- Winning debt consolidation
 | US $4.97 (0 Bid) End Date: Thursday May-17-2012 12:25:32 PDT Bid now | Add to watch list |
Debt Consolidation 101 NEW by Kathleen Marie
 | US $25.74 End Date: Friday May-18-2012 20:55:16 PDT Buy It Now for only: US $25.74 Buy it now | Add to watch list |
Debt Consolidation Service Business Plan - MS Word/Excel
 | US $11.95 End Date: Saturday May-19-2012 16:16:16 PDT Buy It Now for only: US $11.95 Buy it now | Add to watch list |
Related posts: