The Trials and Tribulations Of Family- owned Retailers
Multigenerational stores can maintain their heritage, but as each generation joins, there are pitfalls to navigate.
“The first generation starts the business, the second generation grows it, the third generation screws it up and the fourth rebuilds it.”
That was how Hill Stockton, owner and third generation operator of Norman Stockton in Winston-Salem, N.C., described the trajectory of many multigenerational specialty retailers. Although he was half-joking about his own impact on the men's specialty store that his grandfather started in 1909, his tongue-in-cheek comment nonetheless reflects the challenges many merchants face when seeking to maintain their family's retail heritage.
It was in 2010 after more than a century in business that Stockton made the decision to close the Norman Stockton store as a result of the recession and heightened promotional environment at the time, which made it nearly impossible for independents to compete.
But retail is in his blood and five years later, Stockton had a change of heart and reopened the family business. And in the fall of 2022, his son Richard Stockton made the decision to join the store, marking the fourth generation of family involvement.
“He has an open mind and a different taste level,” Hill Stockton said of his son. “And he's bringing in a younger customer.” Hill Stockton recalled that when he first got involved in the family business in the '80s, he began to bring in popular Italian brands — a decision that didn't sit well with his father. But he persevered and ultimately
“it really helped our business,” he said.
He's taking that lesson and applying it to Richard's suggestions on how to update the mix of the store that is a short walk from Wake Forest University. “When younger guys come in, they ask for Richard rather than me,” Hill Stockton said. “They want his opinion.”
Joining the family business wasn't a foregone conclusion for Richard Stockton. The 31-year-old had spent five years in medical sales and working for Enterprise Rent-a-Car, where he said he “learned customer service.” But because he had spent his life around retail operations, when he was looking for a career change in 2022, he immediately looked to the family business.
“My dad said, ‘Try it and if it doesn't work, no hard feelings,'” he recalled. But so far, so good. The younger Stockton has been accompanying his father to trade shows and showroom appointments to get a taste of “what's cool and new. Trends don't show up here in Winston first, but we want to keep up.”
At the same time, he will soon turn his attention to the company's social media and e-commerce presence. “We don't have an online store right now,” he said, “but we're in the process of getting one up and running.” He said parents of Wake Forest students will often stop by when they're in town and he's hoping to encourage them to continue to shop with Norman Stockton when they get home.
“I don't have the energy or the background for that,” Hill Stockton admitted. “That'll be his next big project and it should help our business.”
In addition, having his son involved also means that when he's ready to step aside, there's someone to pass the business to. “Hopefully one day I can retire and leave the store in good hands,” Hill Stockton said.
The experience of the Stockton family is not unique. There are many independent stores that boast multigenerational ownership. That includes Canada's premier chain, Harry Rosen, Philadelphia's Boyds, New York's Rothmans, Denver's Andrisen Morton and countless others. But perhaps the best known and most arguably the most successful family-owned business in the country is the Mitchell Family of Stores.
As the story goes, the chain was founded in 1958 by Ed and Norma Mitchell “with three men's suits, a coffee pot and a dream” in an 800-square-foot former plumbing supply shop in Westport, Conn. Over the years, the family added several other nameplates to its fold and today, the Mitchell family oversees a retail behemoth with eight luxury stores and annual sales in excess of $200 million. Their reach encompasses both coasts and includes Richards in Greenwich, Conn.; Marios in Seattle and Portland, Ore., and Wilkes Bashford in San Francisco and Palo Alto, Calif.
Bob Mitchell and his brother Russell — grandsons of the founders — serve as co-chief executive officers, and last summer, Bob's son Lyle took the plunge and came on board, marking the first of the fourth generation to be involved.
But unlike other retailers who are more seat-of-the-pants about bringing the next generation into the family business, the process at Mitchells is much more formal. As Bob Mitchell explained, anyone interested in joining has to have worked for another business for a minimum of five years — and performed well. He or she has to pass muster in interviews with the company's board of directors, cannot report to another family member and there has to be an open position, one is not created for the candidate even if their last name is Mitchell. They're required to work on the floor of one of the stores every Saturday, and the company also employs a family business consultant to offer counsel on how to manage the potential pitfalls of a multigenerational business. “There are clear boundaries,” he said.
To ensure communication among the family members, they hold a meeting every Tuesday and twice a year, the entire clan goes on a retreat. That includes spouses and children over the age of 14 who may or may not be involved in the operation of the business. “That's the only time it feels like a family, everything else is business first,” Lyle Mitchell said.
In the case of the 29-year-old Lyle, he had worked at an investment bank for two years before joining Tapestry in the finance division. He got his MBA at Columbia Business School and then decided to join Mitchells. “I didn't anticipate joining the family business right out of business school,” he said. “But I always knew the family business was unique and it became more clear to me that I wanted to get to work with my dad and uncle.”
He acknowledged that working for Mitchells was a bit of an adjustment, but he quickly embraced the trust and common goals evident in a family business. “We're in it for the long haul,” he said.
Bob Mitchell, who worked at Sports Illustrated before joining the family business in 1991, added: “People like to focus on the negatives of working with family, but there are also the joys. There are a lot more pros than cons and even when
things are terrible, you're all in it together.”
He admits that not everyone always agrees on every decision, but because each family member has a distinct role to play, it works. “When you don't have strong governance, that's when the pitfalls happen.”
Although the Mitchell family remains a force within the company, Bob Mitchell pointed out that it is essential to give non-family members the opportunity to be invested in the business as well. The chief men's merchant, for example, is Dan Farrington who has been with the company for 32 years. “The family can give their opinion on something, but Dan makes the final decision on buying,” Bob Mitchell said.
Lyle is working closely with his uncle setting budgets, figuring out how to make the stores more profitable, increasing efficiency and also pondering what other stores the company may ultimately open or acquire.
Having strong governance such as that exhibited by the Mitchells is important to any family-owned business, said Dan
Frosh, a senior adviser at the Cambridge Institute for Family Enterprise in Massachusetts. Frosh works with businesses in a variety of fields to help families with succession planning, how to pass ownership, how to prepare the next generation to be strong contributors and how best to ensure family unity.
“Those are always the challenges when you're bringing the next generation in,” he said.
In any multigenerational business, there are two different systems at work — and sometimes they can be at odds. First is the family unit with its unconditional love and support, but what's the best way to achieve ambitious goals when that is mixed with business? The answer: planning and establishing boundaries, he said.
Whenever a new family member joins, the already-established members first have to ensure they have the necessary qualifications so as to avoid the perception of nepotism, he said, and they need to be intentional on how that person will develop so they establish credibility.
“One of the strengths [of a multigenerational business] is that a lot of family values come into the business,”
Frosh said. “But the next generation also has a new way of thinking that can challenge the status quo. So it often works really well until it doesn't.”
He applauded the Mitchells “more formal” approach, saying it “tends to work better in the long run,” but not every company is willing or able to go down that road. “Most businesses fall somewhere in the middle,” he said.
Another potential pitfall is when the older generation refuses to step aside. Frosh said that with people living longer these days, it often extends the amount of time the next generation has to wait before they can lead. “And sometimes you see an entire generation passed over because by the time the older generation is ready, it's too late. It's a real issue.” He recommended that families be open to discussing a reasonable succession plan so that both the older and younger generation understand the timing.
And he also recommended that any family business bring in an “outside perspective” to help them navigate the issues. “Only 13 percent of family businesses make it to the third generation,” he said. “So it makes sense to invest some money in planning and structure rather than waiting for things to explode and then cleaning it up.”
In the case of Rothmans, there were no explosions when Ken Giddon's son Will joined the New York-based specialty store chain. The business was founded by Harry Rothman in 1926 with a pushcart on the Lower East Side and soon after, became a pioneer in the discount men's clothing field by buying excess merchandise from manufacturers and selling it at low prices. When Harry passed away in 1985, his grandson, Ken Giddon, was tasked with closing the store.
“It had become an old man's store — it was outdated,” Giddon said. “I was supposed to go to MIT for business school — before I started selling pants, I was smart,” he said with a laugh, “and my parents asked me to help liquidate it.” But after getting immersed in the business, Giddon realized there were a lot of things he liked about menswear retailing. So after nine months, he reopened.
Five years later, his brother Jim joined him and today, Rothmans operates a flaghip in New York City and two units in Westchester.
The store is no longer a discounter and it now offers far more than just racks of suits — it has become known for introducing new vendors and emerging brands in a wide array of categories.
“We never take ourselves too seriously and we're always looking at how we should change and evolve,” Giddon said.
Then three years ago, Ken Giddon's 26-year-old son Will joined the family business and holds the position of director of business development. Last fall, he spearheaded the opening of a new department at the company's Union Square flagship called Rothmans Next.
“Will is the fourth generation, but we missed one,” his father said. Before joining the family business, Will Giddon had worked in the entertainment field in Los Angeles for two years but returned home during the pandemic. It was then that he realized that right in front of him was “a rare opportunity — there's almost 100 years of history and I can be a part of growing it,” the younger Giddon said.
Since it opened, Next, with its assortment of new, less expensive brands, is attracting some younger shoppers, Ken Giddon said, and the shop has led to some positive online reviews as well. Some of the brands introduced at Next have also infiltrated the mix at the larger store. “We've gained a lot of insight into where the future of the business is going,” Will Giddon said.
But while Will Giddon's initial project has met with success, his father and uncle made it clear when he joined that he would be reporting to Rothmans longtime general merchandise manager Lacy McAngus, not them. “He's overseeing
Next, but he still reports to Lacy,” Ken Giddon said. “Just because your last name
is Giddon doesn't mean anything; you have to earn your stripes.”
In addition to finding younger-skewed brands, Will Giddon is also helping Rothmans' online presence. “I'm pretty savvy but it's striking the innate ability between someone Will's age and my age,” Ken Giddon said. “I have the benefit of generational knowhow,” his son said. “I come in with the ability to translate things in a new way.”
Bringing Will on board is also part of the master plan for Rothmans. “I always keep my eye on the future,” Ken Giddon said. “As Wayne Gretzky said, ‘Don't go where the puck is, go where the puck is going to be.' And I have a little less of a sense today of where the puck is going to be. No matter how good you are, you can't replace a younger eye.”
A similar scenario is being played out in Philadelphia at the city's top luxury store, Boyds, where the fourth generation of the Gushner family has become integral to the business. Boyds was founded in 1938 by Russian immigrants Alexander, Albert and Ben Gushner, who opened a store selling cigars and sundries and eventually men's shirts, on Market Street. Today, its flagship is located in Center City Philadelphia and it also operates a suburban outpost in
Wayne, Pa., that opened in 2022. Kent Gushner, Alexander's grandson, runs the business and his sons Alex and Andrew are also firmly entrenched, with Alex focusing on men's merchandising and Andrew on marketing and branding.
Last fall, Andrew was instrumental in creating and executing an extensive campaign to celebrate Boyds' 85th anniversary, complete with special themed products, events and a special logo.
Andrew Gushner, who was a legal studies major and had worked on the e-commerce team at Bergdorf Goodman, made the decision to join the family business four years ago. “I was keeping the law school option open if I didn't want to join the business,” he said, but seeing his father's work ethic and passion for what he did firsthand convinced him to take the leap. “My dad would have supported me if I wanted to be a doctor or a lawyer, but my brother and I are the fourth generation and to end the legacy that my family created would be a shame.”
He admits that being in retail has its share of highs and lows, but he's proud every day of the choice he made. Looking forward, he's convinced of the long-term viability of the brick-and-mortar space and believes there's a possibility to eventually open additional Boyds units somewhere in the immediate vicinity. He also hopes to increase the size of the Wayne store to create a “more serious store in the suburbs.”
Kent Gushner said he views it as a “blessing” to have both of his sons join him in the business. “Most fathers aren't lucky enough to have [that opportunity,] particularly when their children grow up and go out into the world. It has always been my dream, my lifetime and career goal, to perpetuate a legacy that means the world to me and is the source of my main inspiration day in and day out. Alex and Andrew's contributions are multifaceted as they continue to respectfully ‘push the envelope,' approaching the business through the eyes of their generation, which I believe is imperative for the business to remain relevant in the future. Secondly, their mere presence in the business creates a sense of stability and an eye to the future which provides assurance of stability to the staff which, as I am getting older, might otherwise start to question their career security.”
He said his sons' “commitment and passion” are “genuine and not something that has to be forced upon them. Having said that, they are still in the earlier stages of working in and learning the business, the uncertainties of life, and…I don't see myself stepping back for at least the next 10 years, so turning the business over to them is not in the foreseeable future.”
Lindsay Morton Gaiser of Andrisen Morton in Denver has a more exact succession plan. The daughter of cofounder David Morton, she spent much of her formative years at the store. Although she went to college to get a degree as a financial analyst, she never lost her love for the fashion business.