Wigwam Stores Inc.
Wigwam Stores Inc. was an American chain of discount department stores based in Seattle that operated across five states: Washington, Hawaii, Oregon, California and Arizona. The discount department store was a fairly new concept when Wigwam's first store opened in 1946. Wigwam Stores' goal was to bring a wide array of products at a lower cost and keep an open family environment.
Founder
Homer Powell, the owner, completed college as a history major at Northwest Nazarene College in Nampa, Idaho. He earned a 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 $50. 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 about the benefits a veteran could have through buying and selling army surplus and decided to do so.
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 Powell 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, gave him his first loan of $500 and became his first partner in business. He took the $500 loan and $500 of his own money and purchased 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.
Powell then 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, went to Texas and purchased a North American T-6 Texan trainer. Powell 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 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. Powell told him it would be a good idea to move up to Seattle and open up a second tent store in Seattle. Ortman loaded up about $6500 worth of goods and traveled up to join Powell. Adler, Powell’s basketball coach and lender, became a partner and they invested another $6500 to combine with Ortman's goods to make a second store. Now there were two locations in Seattle. 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 continued to grow, but Powell and the partners knew that there was only so much army surplus. They used the profit from their tent stores to build large discount department stores.
Lillian Titel was hired to do all the company’s buying. She had been a merchant for Bloomingdale's. She was soon in charge of all of the buying that took place in the company. She became at one time one of the top five female buyers in the nation. After Lillian Titel was hired, 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
Powell and his partners followed the advice of Marvin Shelby and expanded to Hawaii where Wigwam would have few competitors, opening their first store in Hawaii one year before it became a state in 1958. Marvin Shelby was hired to oversee the Hawaiian sector of the company. 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. 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 used innovative methods to bring in business. In the Hawaiian stores, the company would have carnivals in the parking lot. On a few occasions there company brought 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 who wanted to break a world record. He wanted to see if he could talk on the air without falling asleep for two entire weeks. 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
Near the end of 1960, Wigwam expanded to Arizona, another young state. But the state already had a business named Wigwam, which wanted $15,000 for the rights to the name. The partners of Wigwam decided that the name was not worth that much 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 expansion. The company made an initial public offering in the strick market in 1970. Wigwam sold 250,000 shares at ten dollars a share as an “over the counter stock” that was not traded on the larger stock exchanges such as the New York Stock Exchange.
Becoming a public enterprise has its advantages and disadvantages. Wigwam Stores, Inc., receive the capital it needed to expand to more stores, houses and office buildings, but along with thed 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 and one of the original partners, Adler, wanted Wigwam and its sister department stores to open all seven days of the week, including Sunday, which had also always closed for the Christian tradition of Sabbath. 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 buy Adler out of the company. Powell decided to sell the entire Hawaiian and Seattle sectors of the company to find the buyout. 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 sale of many stores, Powell 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, and took charge of the California division of Malcum’s, Webb’s, and Wigwam stores.
Titel became President and CEO after the proxy fight in 1975, the buy-out of Adler and the sale of the Seattle and Hawaiian divisions. The company's 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. No-one was hurt, but the damage cost the company millions of dollars. The Glendale store was one of the more profitable stores left. Soon after, Titel stepped down from the 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 considerable profits with the remaining partners and shareholders.
The Wigwam strikes always closed on Sundays, and never sold cigarettes or alcohol because these items didn't represent the beliefs of Powell.