Who Was Larry Montgomery? What Was He Known for?

Larry Montgomery (1948-2019) is finest often called the CEO and Chair who drove the enlargement of Kohl’s from a Midwestern chain right into a $16-billion nationwide retailer with 1,000 shops. To drive such huge coast-to-coast progress, he led the speedy and regular build-out of Kohl’s brick-and-mortar footprint, averaging 100 new shops per yr throughout his tenure as CEO from 1999 to 2008. He additionally served as Vice Chair, Board of Administrators (1996-2000) and Chair of the Board from 2003 till his retirement in 2010.

Schooling and Early Profession

Born in Grand Rapids in 1948, Montgomery mentioned his ambition as a younger man was getting out of Michigan. After incomes B.S. in Arithmetic at Ferris State College in Michigan, he achieved that purpose by launching a retailing profession that finally spanned the U.S.

Earlier than becoming a member of Kohl’s in 1988, Montgomery spent 16 years (1972-1988) in govt positions at different retailers in Michigan, Minnesota, and Indiana. Throughout his first decade at Kohl’s, Montgomery served as Senior Vice President, Director of Shops (1988-1993) and Government Vice President, Director of Shops (1993-1996).

First Decade at Kohl’s: Taking Market Share from Rivals (1988-1998)

From the time Montgomery joined Kohl’s beneath then-CEO Invoice Kellogg in 1988, he was on the chief crew that launched one of the aggressive expansions in retail historical past. Throughout his 5-year tenure in his preliminary position as Senior Vice President and Director of Shops (1988-1993), he drove huge gross sales progress: from $388 million in 1988 to $1 billion in 1992. After supporting Kohl’s IPO and emergence as a public firm in 1992, he was promoted to Government Vice President and Director of Shops in 1993 and Vice Chair of the Board of Administrators in 1996.

In 1998, throughout Montgomery’s tenure as Vice Chair, Fortune known as Kohl’s “the very best retailer you have by no means heard of,” citing the truth that heavyweight opponents like Sears and J.C. Penney had been sitting up and taking discover of the high-growth trajectory of their Midwestern rival. Not solely had Montgomery and his crew exceeded a goal of 20%-per-year gross sales progress introduced in 1992, however “constant double-digit same-store gross sales progress” was proof that Kohl’s wasn’t growing income solely by including shops—they had been taking market share from opponents by growing retailer gross sales in mature markets. For instance, from 1997 to 1998, Montgomery and his crew elevated comparable-store gross sales by 10%—considerably higher than Wal-Mart at 6.1% over the identical time-frame.

Second Decade at Kohl’s: Coast-to-Coast Retail Growth (1998-2008)

Within the 7-year time-frame from the IPO in 1992 to 1999 (one yr after Montgomery was named CEO), he and his crew had quadrupled revenues from $1.1 billion (1992) to $4.56 billion (1999). Over the following decade, Montgomery grew the Kohl’s chain from 213 shops in 22 states (with annual gross sales of $4 billion) in 1999 to 1,000 shops in 48 states (with annual gross sales of $16 billion) in 2009.

Strategic Imaginative and prescient Throughout the Enterprise: From Infrastructure to Vogue

A lot of Kohl’s spectacular success via the 2000s has been credited not solely to Montgomery’s strategic imaginative and prescient but in addition to the extremely disciplined and efficient working methods that he developed and carried out throughout the enterprise.

As a hands-on CEO and Chair, Montgomery understood all of the nuts and bolts of the infrastructure wanted to handle the large-scale enlargement of a retailer like Kohl’s, together with all of the logistics of provide chain and distribution facilities. On the merchandising facet of the enterprise, he additionally understood that central to the success of his coast-to-coast build-out was attracting a broader buyer base outdoors of the Midwest—and that known as for a significant vogue improve to trendier nationwide manufacturers. To make that occur, he had his crew negotiate offers with nationwide designer manufacturers beforehand discovered solely in shops–a few of whom had been at first reluctant to think about working with a discounter.

100 New Shops Per 12 months: Inconceivable-to-Repeat Efficiency

Throughout his 10-year tenure as CEO of Kohl’s, Montgomery led the speedy and regular build-out of Kohl’s brick-and-mortar footprint, averaging 100 new shops per yr from 1999 to 2008, when he turned management over to his successor, Kevin Mansell. Within the retail business, the unprecedented scope and scale of the expansion he led was credited to “a sure working imaginative and prescient and self-discipline that Larry delivered to the occasion…not all people might have introduced that enlargement off as efficiently and as easily as he did.”

Montgomery’s Distinctive Mannequin for Hybrid Division-Low cost Shops

In defiance of typical knowledge within the retail business, which says shops should model both as shops or as discounters (by no means each), Montgomery maintained Kohl’s distinctive standing as a hybrid retailer by focusing his senior crew on Kohl’s goal buyer: middle-income households who need each worth and elegance in a handy, clear, easy-to-navigate retailer with absolutely stocked cabinets and ample parking. To offer a high-end, low-cost procuring expertise for Kohl’s prospects, he prioritized a multi-pronged technique to drive gross sales within the distinctive mannequin he designed: the hybrid department-discount retailer:

Worth, Availability, Main Market Efficiencies: Montgomery was one of many first CEOs within the business to reap the fee advantages of concentrating shops in main markets to drive supervision, logistics, and distribution efficiencies—he even used helicopters to check site visitors patterns and scout out the very best areas. To make sure Kohl’s might value merchandise decrease than shops, Montgomery’s crew was additionally disciplined about controlling inside prices, from self-service footwear to centralized checkout. To make sure that merchandise had been at all times out there for buyers, he was rigorous about workers sustaining in-stock positions on all merchandise.

High Nationwide Manufacturers: In contrast to house-brand discounters like Goal and private-label shops like J.C. Penney, Montgomery and his crew negotiated merchandising relationships with high nationwide manufacturers beforehand discovered solely in {discount} shops: Levi’s, Nike, Lee, Reebok, Krups, Champion, Dockers, Jockey, and so on.

Comfort, Cleanliness, Lighting: By finding shops in stand-alone areas as a substitute of procuring malls, Montgomery made certain that Kohl’s prospects had straightforward in-and-out entry to shops. He was additionally vigilant about well-lit parking tons and retailer cleanliness, in and out.

Racetrack Design: Relatively than comply with the traditional retail technique of attempting to maintain buyers within the retailer so long as potential, Montgomery believed that Kohl’s prospects would spend extra money if they may store extra rapidly—and it will be a far much less irritating procuring expertise. By designing a retailer structure modeled on a racetrack, he ensured that prospects might simply stroll previous all retailer merchandise, as a substitute of attempting to hunt for merchandise in a disorganized retailer structure.

Media Promoting and Grand Openings: Each time Kohl’s entered new markets, Montgomery launched fastidiously coordinated media promoting blitzes—about all the things from reductions, parking, and types to strollers—upfront of grand openings with full fanfare.

The Backside Line

A lot of Kohl’s success has been credited not solely to Larry Montgomery’s strategic imaginative and prescient but in addition to the extremely disciplined and efficient working methods that he developed and carried out throughout the enterprise. His progress technique delivered unmatched leads to the notoriously robust retail area.

When Montgomery took the helm as CEO in 1999, the Kohl’s chain had 213 shops in 22 states, with annual gross sales of $3.7 billion. When he stepped down as Chair in 2009, Kohl’s had nearly 1,000 shops in 48 states, with annual gross sales of $16.4 billion.

In defiance of typical knowledge within the retail business, which says shops should model both as shops or as discounters, Montgomery maintained Kohl’s distinctive standing as a hybrid department-discount retailer.