Venture Stores: The Forgotten Midwestern Giant

Let’s go back to a time when retail was much more diverse, when Walmart and Target were just another fish in a greater pond, and Kmart was king. Let’s go back to 1962. Today, I’m talking about the Midwestern-based Venture Stores discount chain…

John Geisse

John Geisse, a WWII veteran, had retired as a lieutenant commander and worked his way up the ladder to Senior Vice President and General Merchandise Manager at the Dayton Company – known for subsidiaries at the time that included Hudson’s, (later) Marshall Field’s, and the Dayton’s department stores themselves. Geisse developed and pitched the concept of upscale discount retailing. Dave Babcock, who was VP of Personnel at the time, and had been with the company since the early ’50s, recalls that “[John] had looked at the early discounters and decided there was a place for an upscale discounter. His first thought was to get financing and open his own chain.” [1] However, Dayton was able to offer the capital he needed if he developed it in-house, so that’s what he did. Babcock was actually the first non-family member to hold his position at Dayton, until his departure shortly afterward.

Together with late founder George Dayton’s grandson Douglass, Geisse co-founded and launched Target Stores. The first location opened on May 1, 1962, and put his concepts on full display. Sam Walton wouldn’t launch his Wal-Mart Discount City stores until July, so Dayton and Geisse were truly ahead of the oncoming rise of discount retail. By 1968, Target would soon expand into Missouri, with two new stores opened in Saint Louis. That same year, Geisse would resign from Dayton. He and other Target executives disagreed over expansion strategy, some favoring a market dominance plan over shotgun growth. The Minneapolis Star Tribune said in Geisse’s 1992 obituary that he left “when he was passed over for the top job.” [1]

The May Company

The May Company, a Saint Louis-based company which, at the time, was known for chains such as Hecht’s, Kaufmann’s, and Famous-Barr – which the May company founded with the 1911 merger of their own Famous Shoe & Clothing Co. and the William Barr Dry-Goods Company. May Co. saw massive growth during the fifty-years prior, with several acquisitions of stores and chains. By the time Target entered the St. Louis area, May was in an antitrust settlement with the Department of Justice, under which, they were unable to acquire any more retail chains.

1968 would mark profits at $1 billion, the highest in the company’s history, however, the next year would see a drop to around $36.2 million. [2] The debut of Target and the popularity of Kmart put them in a position where they couldn’t simply buy into the rising discount trend but had to raise profits. They needed an internalized concept.

The Founding Fathers

When Dave Babcock, now The May Company’s Executive Vice President, learned that Geisse had resigned, he got in touch with him and got him involved in May’s conceptual conundrum. Starting a new discount retailer was going to be a big job and, with his experience developing and rolling out Target nationally, Geisse was the obvious man for the job. The two met to discuss the idea in depth, with both being true innovators in their respective areas of retail business, the plan would be set up for success. John then made a presentation to May’s executive committee and, after some deliberation, the group would decide to go ahead with the concept, called Venture Stores. Heavily modeled after Target, and other chains like Kmart, Wal-Mart, and the discount model pioneer, E.J. Korvette’s.

Venture is Ready to Compete

The first Venture store opened in 1970 in the Overland suburb of Saint Louis, on Page Ave. The site is currently a Home Depot. Venture was given a very recognizable black-and-white logo, which could rival the stark, solid red Target logo now dotting America’s shopping centers. The interior actually featured somewhat of the opposite; once inside, customers were met with a colorful burnt orange color scheme. Locations would also feature a small café area that sold food like hamburgers and pizza, as well as popcorn and Icee drinks.

This first location was extremely successful, and Venture would open 20 more by 1976, by which point they had around ten locations in Missouri, four in Kansas, and six in Illinois. May then purchased 23 Turn-Style locations from Jewel Food Stores and converted them to Venture, and they would grow to over 40 locations in the Chicago area, competing directly with local Zayre (later Ames) stores.

“May’s strategy was relatively straight forward. Venture would purchase inventory in bulk at reduced prices. It would sell the goods in a store environment that, compared to department stores, was austere and low budget. By emphasizing self-service, volume sales, and a small operating budget, the store would be able to appeal to consumers by offering low prices.” [3]

Geisse Leaves Venture

That same year, John Geisse would leave Venture Stores and later joined Indianapolis-based Ayr-Way Stores, where he would take over as chairman, and turned the company around from the brink of bankruptcy. He then started a consulting firm, with his close friend Sam Walton and Wal-Mart Stores as his principal client, along with the Ames Department Stores, among others. In 1982, Geisse founded his third chain: The Wholesale Club, which would offer memberships to business owners at low prices and sell goods to them in bulk, co-creating the “membership warehouse” industry; serving as the inspiration behind Sam’s Club, which was started the next year. He grew the chain to around 22-stores before Wal-Mart would absorb them into Sam’s in 1991.

Discount retailing became extremely competitive, but under the leadership of Julian Seeherman, the chain would see large growth during the late-70s and throughout the ’80s. During the U.S. Recession of the early ’80s, lowered consumer spending became an issue. Industry consolidation became a problem as well, with Wal-Mart and Kmart buying up competition to raise profits. This would push Venture to accept a lower price margin and, while the rise competition pushed chains like Korvette’s into bankruptcy, Venture would thrive as they became the lowest cost discounter in the country. [3] With all these regions being blasted with Venture’s “Save With Style” ad campaigns, they had become a Midwestern staple.

By 1985, Venture had a fleet of over 50 stores, most in the Chicago and Saint Louis metro-areas. Over the next 5 years, they would open around 6 stores a year. While Venture outlets were mostly focused near urban areas, they began to push the concept for suburban super-centers and would broaden their selection to carry more clothing and other soft goods.

In a $2.2 billion merger, May would acquire Associated Dry Goods, which controlled brands such as Lord & Taylor, L.S. Ayres, Stix, Baer and Fuller, and Caldor, which consisted of around 100 stores in the Northeast. May would pull two of Venture’s top executives to run the chain, however, they wouldn’t suffer without them. That year, Venture would expand into Kentucky and by 1990, operated around 80 stores in eight states. [3]

To the surprise of many, May would sell off its discount divisions, with a bigger foothold in Chicago with the acquisition of Lord & Taylor, they didn’t really need Venture as much as before. They would abandon Caldor and spin-off Venture into its own private organization. Being sent off with sizable debt, some believed that Venture would suffer out of May’s control, while others said that the chain would finally be able to freely expand, no longer being chained down while May focused on their department stores. I believe that it could have been beneficial had Venture been able to expand more rapidly, under the protection of May, but in their current position, it would prove to be dangerous.

Seeherman, now CEO of the reassembled Venture, would continually add stores as he aggressively expanded the chain into Texas, their ninth state, opening 11 new stores there and boosting their total store count to 104. He would streamline company operations, outlining initiatives that Venture needed to obtain to stay competitive and drive costs down; one was to upgrade warehouse and distribution operations with new technology — and Venture sales would soar to $1.8 billion in 1992. But, while sales would rise, the rate of improvement would slow, and competition would threaten their success.

The Fall of Venture

In 1993, while Venture was focused on expansion, they lost their grasp on their core markets. Target and Wal-Mart would both expand into Chicago, with the former opening 11 stores in one day. Although most customers in the area still preferred Venture, the three would gradually chip that away. Going into ’94, Kmart’s presence had grown to 60 stores in the area, compared to Venture’s 39. They’d fall short of projections and the company reported dismal profits that year, which would begin a downward spiral. Despite this, they continued to grow ambitiously and would spend hundreds of millions in construction and renovation, and would plan to open 10 stores annually throughout the ’90s, most of which would be in Texas. Venture would also begin selling their properties and then leasing them back.

Robert Wildrick would step up as chairman and CEO and would lead the company as they made a last-ditch effort to modernize over 90 of their stores with a re-branding to make themselves able to compete with leading companies like Kohl’s, which modeled the upscale discount concept well. They also changed their slogan from the iconic Save With Style to “See What’s New For You!” and later “See What a Little Money Can Buy.” Wildrick described this as a movement to “…a new format [focusing] on offering an assortment of high-quality home, family, and leisure merchandise at low prices…” [4] Focus on clothing and removal of consumable products would see a large drop in-store traffic, this would be cited as one of their biggest mistakes, as well as not being competitive in advertising.

It was clear that the Texas expansion was a big mistake and Venture would sell the stores to Kmart and would close their Texas distribution center. Wildrick dismissed any rumors of bankruptcy and insisted that the company could still turn things around, but their debt said otherwise. The company’s net-worth plummeted and initiatives to boost sales didn’t pan out. Their market dominance was tied strongly to their pre-built discount empire, and they just didn’t innovate enough before these issues became so prominent.

Finally, Venture would enter Chapter 11 bankruptcy, and attempt to operate under a smaller number of stores. However, these efforts wouldn’t help heal the chain — the damage was done. On April 27, 1998, they would announce that the company would be closing all operations. The remaining Venture locations would subsequently be taken over by Kmart, ShopKo, Kohl’s, and Burlington Coat Factory — and some locations, to this day, would remain abandoned.

Final Words

The Venture Stores had their place in their era and, heck, if management had stayed competitive and took a more rapid expansion approach earlier, they could very well still be a major discount player today. Where they’d innovated before, they’d let a lot crumble in the long run. In the early days, they truly were ahead of Kmart and other chains, but they just didn’t stay relevant. For John Geisse, he died of a heart attack in 1992, at the age of 71. He was really a legend and innovated in the retail world many times over. Right up there with friend Sam Walton.

Citations

[1] (n.d.) John Francis Geisse (1920-1992). Retrieved from Geisse.org: http://geisse.org/JohnFrancisGeisse.html

[2] (n.d.) What Us Grow: The May Company. Retrieved from Pressbooks: https://pressbooks.ulib.csuohio.edu/lets-go-shopping/chapter/watch-us-grow-the-may-company/

[3] (n.d.) Venture Stores Inc. History. Retrieved from Funding Universe: http://www.fundinguniverse.com/company-histories/venture-stores-inc-history/

[4] Gazdik, T. (1998, January 26). W.B. Doner Is Among Those Venture Owes. Retrieved from AdWeek: https://www.adweek.com/brand-marketing/wb-doner-among-those-venture-owes-39285/

[5] Dave (2010, November 30). Save At Venture…Save With Style!. Retrieved from Pleasant Family Shopping: http://pleasantfamilyshopping.blogspot.com/2010/11/save-at-venturesave-with-style.html

[6] Rossen, J. (2019, August 28). 15 Surprising Facts About Target. Retrieved from Mental Floss: https://www.mentalfloss.com/article/67428/14-things-you-might-not-know-about-target

Alex Nuelle, 2020

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