-48th in a Series-
Exit 17A, Johnson Avenue, El Cajon, California — Tilly’s and Home Depot
By Donald H. Harrison
EL CAJON, California – Near the intersection of Johnson Avenue and Fletcher Parkway stands the Parkway Plaza Shopping Center, in which the trendy tween-teen-20’s clothier Tilly’s is one of the tenants. Across the street at 298 Fletcher Parkway, a Home Depot outlet for fix-it-yourself homeowners sprawls. Home Depot and Tilly’s appeal to far different demographic audiences, but the stories of their Jewish founders have some similarities.
The older of the two enterprises is Home Depot, which was founded in 1979 in Atlanta, Georgia, by Bernie Marcus and Arthur Blank after they were fired from their jobs respectively as president and vice president for finance of the Handy Dan Home Improvement Centers, which were subsidiaries of Daylin corporation. Daylin’s president Sanford Sigiloff was the man who gave them the axe, prompting them to launch a career which would result in both Marcus and Blank becoming billionaire philanthropists.
Marcus fits the “rags-to-riches” mold that author Horatio Alger made popular in the late 19th century. The son of Russian Jewish immigrant parents, who lived in a Newark, New Jersey, tenement, Marcus earned money while attending pre-medicine classes at Rutgers University by helping his father to build cabinets. But he later said that his hope of eventually attending medical school was dashed when a Harvard University official said a payment—read that bribe — of $10,000 would be required to help Marcus circumvent Harvard’s post-World War II quota on Jewish students. So instead, he went into pharmacy.
He soon decided that he preferred working on the retail side of drug stores rather than behind the pharmaceutical counter. Eventually he went to work for Two Guys discount stores, managing the cosmetic departments of the various stores. More and more responsibilities came his way, until by the time he was 28 he was responsible for household appliances, sporting goods and ceramics, a portfolio said to represent some $1 billion in sales.
When he was hired by the Handy Dan Home Improvement Centers in Southern California, the company gained not only a top executive, but one with a very big heart. Influenced from an early age by his mother to give tzedakah, he got Handy Dan behind the cause of cancer research and treatment after an employee tearfully disclosed to him that he’d have to quit his job because of a cancer diagnosis. Shocked, Marcus contacted the City of Hope Hospital to ask if anything could be done for the employee. The patient was successfully treated, and Marcus organized some large fundraisers to help the City of Hope, which began its institutional life as a sanatorium sponsored by the Jewish Consumptive Relief Association.
After Marcus and Blank were fired, they sat down at a nearby coffee shop and figured how to use the large warehouse concept – popularized by Fedmart and Price Club founder Sol Price – in the home improvement business. The two men recognized that shoppers who wanted to fix up their homes needed to shuttle from paint store to hardware store to appliance store. They decided that the tickets to success were large warehouses featuring low prices, one-stop shopping, and personnel who could demonstrate to customers how to execute do-it-yourself projects. With the help of New York investment banker Ken Langone, they raised the money for their first store in Atlanta, a location they said they chose because of that city’s favorable business climate and its huge international airport.
When the first Home Depot store opened, customers didn’t exactly rush to its doors. As the story is told, Marcus and Blank had their children hand out $1 bills to any perspective customer who would go inside and look around. Two years after the 1979 opening, Home Depot went public, initially selling its shares on NASDAQ and in 1984 expanding to the New York Stock Exchange. The company expanded operations to Canada and Mexico, and now has approximately 2,250 outlets.
Marcus had found in Blank a partner of similar upbringing. He and his older brother Michael had grown up in a one-bedroom apartment rented by his parents Max and Molly Blank, in Queens, New York.
Max operated Shelly Pharmaceutical, a small mail-order business, which was taken over by Mollie after Max’s early death. Through hard work, she made such a success of the company that Daylin purchased it. After Arthur graduated from Babson College in Wellesley, Massachusetts, he worked as an accountant with Arthur Young and Company, and after joining his mother and brother, transitioned from Shelly Pharmaceutical to Daylin. Initially, he became president of a pharmaceutical division consisting of Elliott’s Drug Stores and Stripe Discount Stores, but after Daylin sold that division he moved to Handy Dan to work under Marcus. Handy Dan had $155 million in revenues the day that Sigiloff fired Marcus and Blank in what since has been described as a corporate power play.
The Home Depot partners became beloved businessmen and philanthropists in Atlanta. Marcus collaborated with former U.S. Secretary of State George Shultz to help establish the Israel Democracy Institute, a think tank to promote democracy in Israel. He also donated $3.9 million for the fight against anthrax poisoning to the Centers for Disease Control and Prevention.
Similar to the way he became involved with cancer research at the City of Hope, Marcus responded to the needs of an employee with an autistic child, and created the Marcus Institute, which operates a 16-acre campus for research and treatment of autism. The center has expanded into treatment of patients with brain injuries and neurological disorders, including Alzheimer’s.
Returning from a trade mission to Israel, Marcus was sitting on an airplane with then Georgia Gov. Roy Barnes. Marcus expressed an interest to the governor of doing something for the customers in a state where he had such a successful career, and perhaps to find a way to help Atlanta attract tourists who would stay in hotels, eat in restaurants, and thereby contribute to the economy.
The governor suggested a range of projects, including a symphony, but Marcus said that the customers who engage in do-it-yourself projects to fix up their homes were less likely to go to the symphony then to go to some attraction, such as an aquarium. By the time the plane landed, the idea of creating the world’s largest aquarium was sketched out. Marcus said he did not want any public money, but would like the project to be fast-tracked in the review process. That it was, and the Georgia Aquarium today occupies 604,000 square feet, houses 10 million gallons of water, and boasts a 30-foot deep exhibit tank measuring 284 feet by 126 feet. An estimated 100,000 animals are on display at the aquarium.
As Marcus had hoped, the aquarium energized Atlanta’s tourism economy. The Civil Rights Museum, the College Football Hall of Fame, and the World of Coca Cola soon located nearby.
Blank, meanwhile, was far from inactive. After succeeding Marcus as head of Home Depot, Blank purchased the Atlanta Falcons football team and later added to his sports interests the Georgia Force (an arena football team), and PGA Tour Superstores. He also purchased the Mountain Sky Guest Ranch in Montana.
Of significance is the fact that every Home Depot store, as a matter of company-wide policy, is supposed to adopt some charity or non-profit organization and to help make the world a better place. Comparing the idea to the Jewish concept of tikkun olam, or repairing the world, Marcus once exulted, “I turn them into Jews.”
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Across Fletcher Parkway in the Parkway Plaza Shopping Center is one of the many outlets of Tilly’s, initially co-founded as the “World of Jeans and Tops” in 1984 by Hezy Shaked, a former officer in Israel’s Navy, and his then-wife Tilly Levine.
According to corporate biographies, the couple worked their way from the East Coast to the West Coast of the United States, with Shaked taking various jobs along the way. One of them was at a garage, where their living quarter was under a staircase, he has said.
After arriving in Orange County, California, Shaked was attracted to the swap meet phenomenon, where for a small fee to the swap meet operator people may set up tables and from them, throughout the day, sell many varieties of goods. Hezy loaded up on clothing, at first bringing a few items for sale, and later buying and selling by the truck load.
Soon he had accumulated enough profits – and sufficient savvy into what kinds of fashions will sell – to open his first store in Los Alamitos, California. “Success,” noted his wife, “didn’t come on a silver platter. We worked seven days a week for seven years.”
Eventually, Shaked renamed the stores “Tilly’s” after his wife, which name the chain keeps today notwithstanding their divorce in 1989. Levine, in fact, remains involved with Tilly’s; her title being director of vendor relations.
A typical Tilly’s store measures approximately 7,900 square feet – large enough to command two or even three spaces in a typical shopping center. The company went public in May 2012, raising $124 million through its initial public offering of stock.
Selling clothing, shoes, and accessories for such activities as surfing, skateboarding, snowboarding, motocross and other sports, each store attracts a variety of shoppers who want such trendy brands as Levi’s, Quiksilver, Ugg, Vans and Tilly’s own house brands. The company keeps up with the ever changing fashion preferences of teens and young adults through research that includes ongoing interactions on such social media as Facebook, Instagram and Twitter.
Shaked also has become involved with various philanthropic projects, none more important than Tilly’s Life Center (TLC) created by his ex-wife who, in a program known as “I Am Me,” seminars with teens about such issues as bullying, drugs, eating disorders, self-esteem; forgiveness; acceptance, and suicide.
As of July 2015, Tilly operated 214 stores in 33 states. Shaked has expressed the hope of surpassing 500 stores by the Year 2022.
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Harrison is editor of San Diego Jewish World. You may comment to donald.harrison@sdjewishworld.com
–Dorothea Shefer-Vanson, Mevasseret Zion, Israel