Entrepreneurial

Grocery magnate learns from personal failure

By Reuters Staff
August 11, 2010

The following is a guest post by Stew Leonard, founder of Stew Leonard’s, the Connecticut-based grocery and wine retailer with upwards of $300 million in annual sales. His recent book, “Stew Leonard: My Story,” details the challenges and triumphs in building a company and legacy that his children would inherit. The views expressed are his own.

My son Stew Jr. delivered a bit of news at his college graduation that almost broke my heart: He had been recruited by Price Waterhouse, the big accounting firm, and decided to work for them instead of joining the family business.

Despite our disappointment, my wife Marianne and I felt he had earned the graduation present we had chosen for him: a round-the-world tour. It was 1977, and at $2,500 just for the airline ticket alone, it was an expensive gift. But it turned out to be a wonderful investment.

On one of the flights, from Katmandu to Cairo, Stew sat next to an Indian businessman. The fellow proudly told Stew all about his family business, one that went back several generations. When Stew told him that he had chosen not to follow in my footsteps, the fellow was convinced that Stew was making a mistake.

Stew began to have second thoughts, and later that day he called us from Cairo to tell us that he had told Price Waterhouse he had changed his mind. He was going to make a career of the family business instead.

In the early years of building our business, Marianne and I hoped that our children — Stew, Tom, Beth and Jill — would someday choose to work at our store and we knew that would be more likely if it was fun for them. So every night when I came home for dinner, I told them exciting stories of the events of the day. Even if things hadn’t been great that day, I made it sound like fun: The chickens getting loose on Route 1, a huge display of cereal boxes falling like dominoes, the new baby calf we had just added to our little farm, the children’s friends I’d seen in the store that day. Each night they waited to hear my stories, the excitement, and the news.

Luckily, the strategy worked. In addition to Stew Jr. joining our business and eventually becoming our chief executive, Tom built our operation in Danbury, Connecticut, Beth brought her love of French culture and food to focus on baking, eventually starting the largest in-store scratch bakery in the country, and Jill, the youngest but always determined to have a place in our business, set her sights on shaping and developing our team.

TAX FRAUD CONVICTION

Our family business, like many, faced great challenges over the years, the greatest being a personal tragedy as well. In 1993 I pleaded guilty to federal tax (evasion) charges and was sentenced to 52 months in a minimum-security correctional facility. Suddenly, the job of running our business belonged to my children.

Stew Jr. was under pressure to show our banks and suppliers that our business was solid, that we would be able to pay the IRS fines and penalties, to pay our suppliers and to continue to serve our customers with the world class products and service we had become known for.

During that time not only did Stew, Tom, Beth and Jill keep the company on solid footing, they helped it to grow in tremendous new ways that I would have never dreamed of. Tom struck out on his own, opening Tom Leonard’s in Richmond, Virginia; Stew Leonard’s grew to three stores and began planning a fourth; wine stores were opened and sales tripled to $300 million a year. And my 13 grandchildren, who were growing quickly and beginning to consider college and careers of their own, were starting to show interest in our business. Of course I hoped they would all choose to come to work for Stew Leonard’s, but I also knew that they needed to find a path of their own, just as their parents had done.

Now when I go to Stew Leonard’s I see many of our 13 grand kids working there — from shucking oysters in the seafood department to serving customers ice cream cones to helping to plan parties in our catering department and I see their paths beginning to form, smiles on their faces and bright ideas blooming in their minds about how they will put their mark on Stew Leonard’s, helping to make it bigger and better than ever before.

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