He's Got Plans For Hecht's What Does Ceo Want? Production

Posted: September 10, 1995

Irwin Zazulia likes the word productivity.

And, when it comes to the 14 John Wanamaker stores that Hecht's acquired last month, productivity tops the chief executive's to-do list.

"We want to do more business," he said. Then, being a productive fellow, Zazulia went straight to the numbers.

The average annual productivity in a Wanamaker store, he said, hovered around $120 in sales for every square foot. By the same measure, each Hecht's store, he said, produces an average of $218.

Including the Wanamaker stores, Hecht's, a division of May Department Stores Co., of St. Louis, operates 62 stores in a crescent stretching from Fayetteville, N.C., to Allentown, with its strongest presence around Washington and Baltimore.

When Zazulia talks productivity, he doesn't stop with the bottom line. Even store fixtures - shelves, racks and anything else that holds, hangs or displays merchandise - have to be productive.

Last week, Zazulia walked the aisles of his shiny Towson, Md., store and proudly pointed out a stand that took up about the same amount of floor space as an upright piano but could hold 200 pairs of blue jeans in several tiers.

"We believe in a powerful assortment of merchandise," Zazulia said.

But Zazulia has more than racks for Levis on his mind. Now, with the ink barely dry on the legal papers selling Wanamakers to the May Co., it's Zazulia's job to build the retailing dynamo's business in the Philadelphia region. And he's already got a powerful assortment of plans:

* Over the next 3 1/2 years, Hecht's plans to spend $175 million upgrading the stores - at least six - beginning in January with the Montgomery and Oxford Valley mall stores. Each will be remodeled with major upgrades in quality and decor, and with some nonselling space converted into sales space. ''Those two stores offer us very good opportunities in growth," said Zazulia.

* Hecht's is already looking for other locations in the area. "We're looking to expand," Zazulia said. "We're coming into Philadelphia to do well."

* All the stores will get, as soon as reasonably possible, "tone-ups," which include minor repairs, new paint and fresh carpeting as needed.

* The Jenkintown store, which at one point had been offered for sale by Woodward & Lothrop, will continue to operate. "Initially, we're going to look to make Jenkintown work. There's a lot work to do there," he said.

* The Center City, Christiana and King of Prussia stores are not on any immediate list for remodeling or major repairs, Zazulia said, discounting any notion that the Center City store would be reduced from its five floors of selling space.

* Hecht's has not yet sold the Harrisburg store it bought but is not operating. Strawbridge & Clothier had sought to buy that store from Woodward & Lothrop. Zazulia would not comment on the store.

* Hecht's is "trying to decide right now" whether to continue to operate the furniture clearance center in the basement of the Northeast Philadelphia store, Zazulia said. Merchandise there is now being liquidated. Hecht's did not acquire John Wanamaker's freestanding furniture store in Wilmington. ''That's not our business. We're not running a specialty store," he said.

* And last but not least, $6 million of that $175 million in remodeling money will be spent immediately to buy those Hecht-style "productive" store fixtures.

"When you walk through a Hecht's store, the geography, the look and the presentation, the signing will be consistent. But in Philadelphia, you have to give me a couple of weeks," Zazulia said. "Most people haven't slept."

No wonder.

A little over a month ago, May acquired 14 Wanamaker and three Woodward & Lothrop stores in a dramatic courtroom bankruptcy auction. The deal closed Aug. 28. Since then, Hecht's management and buyers have been working to integrate the stores' systems.

"It's like a whirlwind," said Nancy Chistolini, Hecht's spokeswoman. ''It's exciting but at the same time, you keep thinking: 'What do we do next?' "

Zazulia is no stranger to store acquisitions. The chain has nearly tripled,

from 21 to 62 stores, since 1980, when he became chief executive. But this is the largest single acquisition, requiring the most complete metamorphosis in the least amount of time.

Walking through the store last week, Zazulia seemed undaunted by the task.

Bending to pick up a crumpled piece of paper, stopping to refold a Ralph

Lauren shirt or pointing out the latest fashion trends (animal prints, denim, corduroy), he talked about his ideas for stocking the Philadelphia stores.

"I think there is a big opportunity in sportswear - female and men," he said. That means that Philadelphians can expect to see much more Nautica, Tommy Hilfiger, Timberland and Polo in the stores - all displayed on those ''productive" fixtures.

Zazulia pointed out Hecht's private labels: Valerie Stevens at the high end, Amanda Smith for moderate goods, and Karen Scott at the lower end. Marsh Landing is a more casual, sporty product in the Timberland vein. Hecht's private-label goods will be phased in as Wanamaker private labels, such as the Potomac Collection, are sold off.

About 12 to 13 percent of Hecht's business is private label, meaning goods designed and manufactured exclusively for one retailer and marketed under a name created by the retailer.

To find out what Philadelphians want to buy, Hecht's will continue its practice of sending out 350 surveys per month, per store.

"We pride ourselves in giving the customer what she wants, when she wants it, and at a fair price," he said.

Zazulia, 54, began his retailing career at Stern Bros. in New York after graduating from Rutgers University in 1963. His first job as an executive trainee was to work a "white sale" of linens and sheets while his boss went on vacation.

"When he got back, he took me into the stockroom and he gave me a compliment of how well I had kept the stock," Zazulia recalled over lunch last week. "It was one of the highest compliments I ever got."

No retailing hopscotcher jumping from chain to chain, Zazulia says his second store job was at Hecht's, which he joined in 1971 as a divisional merchandise manager of ready-to-wear. Zazulia rose through the ranks, becoming executive vice president in charge of merchandising in 1976.

He's been president and chief executive for 15 years and has seen 10 of his former executives go on to be presidents or chairmen of other May Co. divisions.

Zazulia said he loves his work. "I enjoy being with people," he said. "I enjoy the challenge of running a business."

Watching customers move around him in Towson last week, Zazulia remembered the week he spent in the Stern's mailroom as part of the executive-training program.

"They used to have one of those clocks where the minute hand would move back a little and then jump ahead," he recalled. "That was October 1963. That's the last time I ever looked at the clock."

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