Wigwam Stores Inc.

Wigwam Stores Inc. was a chain of discount department stores based in Seattle and operated across five states: Washington, Hawaii, Oregon, California and Arizona. The discount department store was a fairly new concept when Wigwam first store opened in 1946. Wigwam Stores, Inc. goal was to bring a wide array of products at a lower cost and keep an open family environment.

Founder

Homer Powell, owner, completed college as a history major at Northwest Nazarene College in Nampa, Idaho. He then went on to get his master's degree at the University of Washington with the financial opportunity of the GI bill, which allowed veterans to attend college.

Financially, times were particularly hard for Homer Powell. He held a steady job in Seattle working at the local YMCA. His pastor at the Nazarene church he attended gave him a tip on how he could earn an extra fifty dollars. Homer Powell was “all ears” and listened to his pastor’s proposition. The pastor suggested he buy army surplus, specifically refrigeration machines, and then sell them for a higher profit. Homer Powell never found the machines, but in trying to locate them, he found out aboutthe benefits a veteran could have through buying army surplus. So, Homer Powell decided to buy and sell army surplus.

History

After World War II there was an over-abundance of army surplus. The army sold many goods in bulk to try to offset the enormous cost of the war. As a college student Homer had no means of purchasing the surplus. He went to his basketball coach at Northwest Nazarene College to get a loan for his business venture. His basketball coach, Lloyd Adler, did not just gave him his first loan of $500 but became his first partner in business. He took the $500 loan and $500 of his own money and decided to purchase a $1000 worth of sleeping bags since he knew he could sell them quite easily without a huge risk. He sold them for about $11,000.

Homer Powell then got another tip. He found a sale of a war surplus plane in Texas. From Seattle, he and his brother-in-law and future business partner, Dallas E. Ortman, set out for Texas. When they got there they purchased a North American T-6 Texan trainer. Homer flew the plane back to Seattle Washington, and later flew around the country purchasing more army surplus goods. After his trip around the country he opened a makeshift store from a 150-foot-long (46 m) tent right across the street from the Boeing Company aircraft plant in Seattle. The makeshift store was an instant hit. Homer was making about $5000 a day in profit. At the end of the year the company’s net profit was 39 percent. While this store was operating in Seattle, Washington, his partner, Dallas Ortman, was running a similar army surplus store in Portland, Oregon. Homer Powell told him it would be a good idea to move up to Seattle and open up a second tent store in Seattle. Dallas loaded up about $6500 worth of goods and traveled up to join Homer. Adler, Homer’s basketball coach and lender, became a partner and the two invested another $6500 to combine with Dallas’ goods to make a second store. Now there were two locations in Seattle. Homer’s dream was becoming a reality. Wigwam became the name after their two original stores made from a large tent. A wigwam is a Native American dwelling from the Northeastern United States, typically domed in shape and containing only one room.

The business’s success did not waver but continued to grow, but Homer Powell and the partners knew that they could not just count on the army surplus to be there. They knew that one day it would run out since there was only so much army surplus. So, they decided to plan ahead and think of ways they could continue the Wigwam business. Homer Powell, from the beginning, always was the innovative thinker; so, he decided they needed to go towards retail business since it was most similar to what they had been selling in army surplus. Specifically he wanted to be a discount merchant, a relatively new idea in retail business. When they made enough profit from their tents stores they soon built large department stores with foundations, four walls and a roof. They made it this far without very much knowledge in business or marketing, but they knew if they wanted it to expand any further they would need some business expertise.

A woman named Lillian Titel was hired to do all the company’s buying. She previously was a merchant for Bloomingdale's. She was soon in charge of all of the buying that took place in the company. After years of work she was named at one time one of the top five female buyers in the nation. So after the hire of Lillian Titel, Wigwam moved from selling just army surplus to selling varied items. The stores are best described as being between Kohl’s department store and a K-Mart. The stores sold everything from power screwdrivers to men’s swimwear, which sold for ninety-nine cents.

Expansion

Soon store after store was being built in Seattle, and it was time to expand to another state. Marvin Shelby, a long time friend of the Powells, told Homer that Hawaii would be a great opportunity to expand to next. He felt that Wigwam would have few competitors and would have great success among the native population. Homer and the partners took his advice and opened up their first store in Hawaii one year before it became a state in 1958. Homer needed then a manager to oversee the whole Hawaiian sector of the company. He chose Marvin Shelby, who was the inspiration for the move in the first place. The store had even more success than it did in Seattle.

At Wigwam’s peak in Hawaii there were a total of 15 stores. Some of them were called Dodies, a local chain of department stores that Wigwam bought out. All the stores are filled with stories that add to the character of the company. The stores in Hawaii were a huge success among the local population, which is rare considering the resistance of Americanism throughout the state’s history.

The Wigwam Company was always trying to come up with innovative ways to bring about business. In the Hawaiian stores, the company would have carnivals in the parking lot. The company even on a few occasions would bring in elephants and other exotic animals to entertain the customers. Wigwam advertised on every medium possible. They ran television and radio commercials. The company placed ads and coupons in newspapers where their stores were located. They also advertised in magazines when possible. One of their more unusual ways they used to publicize the company was in Hawaii when they hired a local radio disk jockey that wanted to break a world record. He wanted to see if he could talk on the air without falling asleep for two entire weeks. Homer Powell opened one of his stores in Honolulu to him where he could broadcast. This way the local population could participate in breaking the world record by helping him stay awake while he was locked in the store during and after store hours. With the help of Wigwam he was able to break the world record.

Poast Trading

In 1960, Lillian Titel and others suggested that Wigwam should open its own distributing company to cut costs for Wigwam. So that same year they opened Poast Trading. “Poast” is an acronym for each of the partners at the time: Powell, Ortman, Adler, Shelby, and Titel. Poast trading was a financially lucrative move.

Further expansion

After the huge success in Hawaii, Wigwam was able to expand even more. Near the end of 1960, Wigwam took on a new state. Arizona was similar to Hawaii since it was a very young state, so there was much opportunity. It seemed like the perfect next step for expanding the company, but there was a problem. The state already had a business with the name of Wigwam, which wanted $15,000 for the rights to the name. The partners of Wigwam got together and decided that to carry the name to the state of Arizona was not worth that amount so they decided to call the Arizona store chain “Totem”.

The expansion soon made its way into Southern California. At the peak of the southwest division, the Southwest had 25 stores between the two states. In California, the stores that Wigwam took over were Malcum and Webb’s. The group decided to keep the names of both stores. There were also some department stores with the name of Wigwam opened in the Golden State. Shortly after Wigwam moved to the Southwest, the business needed more capital to continue the high rate of expansion. The answer was the stock market. The company went public in 1970 through an IPO. Wigwam initially sold 250,000 shares of stock, originally sold at ten dollars a share. The Wigwam stock was an “over the counter stock” and was not traded on the larger stock exchanges such as the New York Stock Exchange. Wigwam’s official business name was Wigwam Stores, Inc., after it became public.

Becoming a public enterprise has its advantages and disadvantages. Wigwam Stores, Inc., did receive the capital it needed to expand to more stores, along with houses and office buildings, but along with the capital came shared interest in the company’s future. In 1975, there was a proxy fight within the company, in which shareholders of a company vote on the company’s decisions, so the stockholders have a voice in the company. Many of the major investors along with one of the original partners, Adler, wanted Wigwam and its sister department stores to open all seven days of the week, including Sunday, which in past was always closed for the Christian tradition of Sabbath. Homer Powell was a strong Nazarene, a denomination of Christianity, and did not want to have his company opened on Sundays. So, the other four partners decided to eradicate the problem and buy Adler out of the company. In order to do so, they needed to sell many stores to raise enough money to make the buyout. Powell decided to sell off the entire Hawaiian and Seattle sectors of the company, which made an enormous amount of profit and the partners easily bought out Adler. By that time, Homer Powell was ready to step down as president of the Wigwam business and soon retired.

End

In 1976, one year after the proxy fight and the major sell-off of the Wigwam stores, Homer moved to Phoenix and still had influence in the company. He mainly oversaw the Phoenix division after he stepped down as president. Lillian Titel, who was present throughout the company’s history, was the main merchant of the company. In the company's heyday, she was executive vice-president in Seattle. She then moved to California, where she still resides today, and took charge of the California division of Malcum’s, Webb’s, and Wigwam stores. Then she became President and CEO after the proxy fight in 1975, and the buying out of Adler and the major sell-off of the Seattle and Hawaiian divisions. It was under her control that the company faced one of its biggest disasters. The company already had sold many of its stores, and now its main stores were in California and Arizona. In 1977, one of the largest remaining stores, measuring about 150,000 total square feet, burned to the ground in Glendale, California. The fire destroyed everything in the store. Luckily, no one got hurt, but the damage cost the company millions of dollars. The Glendale store was one of the more profitable stores left. This blow left the company in a bad situation, with hopes of rebuilding the company to its height of success in the 1960s and early 1970s. Soon after, Lillian Titel stepped down from her presidency. Monty Ortman, manager of the Arizona division and son of Dallas Ortman, took the job. He soon sold the rest of the company and split the profits with the remaining partners and shareholders. They made a considerable amount of profit when the sold the remaining parts of the Wigwam company. Through the strong leadership of family and friends, a strong family tradition persisted through the company’s history. One notable fact is that not one Wigwam department store or sister store opened on a Sunday. The Wigwam also never sold cigarettes or alcohol because these items didn't represent the beliefs of Homer Powell. Homer Powell lived a full life. He stuck to his values and had an even to his final days. He died two days before Easter in 2006.

References

• “History of the Hawaiian Islands.” Hawaiian School Reports. 2003. Island Options. 19 April 2008 [1].