Tag Archives: community

Orchard Supply Hardware And The Mediocrity of Millionaires

Today I learned that the Orchard Supply Hardware store near me is closing.

Some 4300 people* are losing their jobs. A chain of growing and seemingly profitable hardware stores, serving well their communities, is being liquidated.

OSH, as it’s known, has 99 stores in California, Oregon and Florida. If you don’t live in those states, you may wonder why this matters to you. But it does.

For this is not about globalization, or low-skilled immigrants stealing 4300 jobs. Instead it’s Wall Street; it’s about a few rich guys who need to make their numbers.

When I talk about Dreamland, I often say that our opiate epidemic grew from our destruction of community, in many ways, all across America. The demise of Orchard Supply Hardware, announced last week, is the kind of thing I’m talking about.

OSH was a place where the community came, where people bought things with which they built their homes and yards.

The store had a rare combination in hardware these days: great customer service and smaller stores. That meant you could actually find the things you needed. This earned it $600 million in sales last year. OSH, which is owned by Lowe’s, was expanding.

OSH is a chain but people I know feel like it’s their local hardware store. I didn’t buy hardware anywhere else. With all the crappy chain stores and chain restaurants we Americans have to tolerate stomping all over our country, here was one that people actually wanted to shop in, and felt close to.

It seemed that behind OSH was a creative idea: position it as an alternative in a world where customers are moving away from big box stores they have to drive for miles to get to. Smaller stores, easier to get to, alert and knowledgeable staff.

Sadly, Lowe’s backed off this inventive positioning of OSH in July when it hired Marvin Ellison as CEO.

Ellison was the CEO of JCPenney. There, he ran the company into its worst quarter ever. In his last quarter, the company lost $69 million and its stock hit an historic low. In his three years there, JCP shares dropped by more than half. For that record, he was compensated with $10.8 million in cash and stock in 2017, then hired this year to revitalize Lowe’s.

You may wonder: What about that record makes this guy worth hiring anywhere?

You may wonder: What company looking to rebound in this retail environment would hire anyone from JCPenney?

Another question that may occur to you is, why does Lowe’s feel in such a hurry to boost its stock price? Well one reason, apparently, is that a big chunk of Lowe’s stock has been purchased by Bill Ackman, an activist hedge-fund investor, who is hankering for change and wanted Ellison.

Why anyone would listen to Ackman’s advice on business is an interesting question. His hedge fund has lost half its value in the bull market of the last three years.

Ackman is the guy pushing things to go fast at Lowe’s. And he’s the reason the former CEO, a guy with some long-term vision, was booted.

Here’s why: Ackman’s hedge fund once had $20 billion, but as investors have pulled out amid its poor performance, the fund now has only $8 billion. Of that, he’s betting $1 billion on Lowe’s stock to rise, and quickly, to staunch the investor exodus. (For more, watch this CNBC interview.)

Thus, Forbes wrote, “The Lowe’s clock is ticking. And with Ackman as the timekeeper, Marvin Ellison is a man in a hurry.”

First idea: liquidate a growing and seemingly profitable chain of stores and its 4300 employees. Double down on big-box retailing just as consumers are rejecting it.

Mind you, this has nothing to do with improving the long-term viability of Lowe’s as a business.

But I guess if I’d lost as much money as Ackman has, I’d be in a hurry to earn it back, too.

Still, you know, Ackman and Ellison might take a moment. Common folks are paying the price: the employees, the contractors and communities that rely on those stores.

In corporate America — as we’ve swooned over it, exalted it, praised its wealthy leaders for making themselves lots of money — the clear hunch I have is that, really, a lot of the fellows at the top are not that good. It’s mediocrity on parade a lot of the time, insulated from results, from any whiff of merit pay, and from the consequences of their failures, particularly as they are felt in towns across America.

I spoke to a guy at my OSH store who said he had worked for the company for 20 years. Here’s how he was told the news: On the afternoon of Tuesday last, company officials suddenly shut the store, escorted the remaining customers out, assembled the staff, and let them know their jobs were ending; the store was closing Oct. 20.

“Today you’re Orchard Supply Hardware. Tomorrow you belong to liquidators,” he said they were told.

Within a couple days, “Everything Must Go” signs were all over the store.

You may wonder: How is that okay?

Here’s Ellison: Lowe’s is “developing plans to aggressively rationalize store inventory, reducing lower-performing inventory while investing in increased depth of high-velocity items. Exiting Orchard Supply Hardware and rationalizing inventory are the driving force behind the changes to Lowe’s Business Outlook.”

So they’re going to stock stuff that sells well. Brilliant idea.

But why does that mean OSH must close? Why not sell it to someone who actually gives a damn about Americans and their communities, and who has the creativity and energy to run such a company?

(NOTE: A Lowe’s spokeswoman emailed me this morning (8/29) with this response to the columns, saying that OSH was not profitable:

We are working hard to make this transition as smooth as possible for our associates and our customers.  We will be retaining our associates through the store closure process and are encouraging them to apply for open roles at Lowe’s stores, where they will receive priority status. Associates will receive job placement assistance, and we will be providing eligibility for severance. 86 percent of Orchard locations are located within 10 miles of a Lowe’s store.

The decision to exit Orchard was based on the need to focus growing our core home improvement business and deploy our capital to more profitable projects. Orchard’s 2017 earnings before interest and taxes (EBIT) was a -$65 million on sales of approximately $605 million.*)

Instead, Marvin Ellison, escaping JCPenney, decided within less than two months to close 99 stores and lay off 4300 people.

All because? Well apparently Bill Ackman has lost a lot of money in bad investments.

As I’ve traveled the country, I’ve learned that the cost of losing Main Street has been incalculable – yet we bow to the free market as if we have no choice. That’s what’s happening here.

The good news? Lowe’s stock price has gone up a few bucks – so I guess we can all breathe easier.

This move will harm Lowe’s in the long run. I know sales are going online, but hardware will always be different. Customers need that contact with sales staff who know their stuff. Even contractors say that. (See a video about contractors’ opinions on OSH closing.)

OSH formed in 1931. Many years later it was bought by Sears, whose glory days were well behind it, looking to spruce up its home-improvement position. Owned finally by a hedge fund, Sears apparently did what Sears is now known for as a hedge-fund property – it muddled through. (Read an LA Times story here.)

Finally, it spun the company off, but not before saddling it with enormous debt. Naturally, that debt crushed OSH into bankruptcy within two years. This is how Business Insider described it:

“In 2005, Sears Holdings – by then run by hedge-fund guy Eddie Lampert – announced that it would extract a special dividend of $450 million out of OSH, and that OSH would borrow the money to pay this dividend.

“In January 2012, in typical private-equity manner, the now heavily indebted OSH was spun off to the public; 18 months later, in June 2013, OSH, buckling under this debt that Sears Holdings had put on it, filed for bankruptcy.”

In bankruptcy, OSH was bought in 2013 by Lowe’s, which, under then-CEO Robert Niblock, did some great things. Above all, it remodeled OSH stores. Funny what happens when you invest as if for the long run. The staff now seemed motivated. The store came to life; so apparently did the chain. In Pasadena, it became one of the city’s biggest sales-tax generators

Until that day in July when OSH’s parent company hired a guy from JCPenney at the behest of a hedge-fund owner losing money in a bull market.

You may wonder at it all.

If so, here’s a petition to make yourselves felt. Please share it, and this article, if you like it.

  • (Correction: I originally noted the number of OSH employees as 5400. A Lowe’s spokeswoman informs me that the correct number is 4300 and I’ve made that correction throughout.)

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Filed under Business, California, Southern California

Planting Portsmouth, Ohio

Portsmouth, a small town I wrote about in Dreamland, has been slowly rebounding from years of economic decline and drug addiction.

That’s a remarkable thing. For it was Portsmouth – on the Ohio River — that led the way into our national opiate-addiction epidemic. The town was where the Pill Mill – sleazy pain clinics prescribing massive amounts of pills to almost anyone for cash – was born.

With the town blasted by this huge supply, and the sense of community shredded by job loss and more, widespread pain-pill addiction was a fact of life in Portsmouth by the end of the 1990s.

But a lot has happened since then. The town, each time I return, seems slightly more energetic, more invigorated, more about positivity and less about dope’s inertia and fatalism. A recovery culture has taken hold there that’s exciting to watch.

Not that all the problems are behind Portsmouth, Ohio. But there’s another story now competing with the “let’s get high” culture that gripped the town for so long. I wrote about the beginnings of this at the end of my book – the small clues of rebirth: new gyms, a coffee shop, lofts, refurbished buildings and more.

Along that line, the folks of Portsmouth – 500+ volunteers – get together this Saturday to wash, repaint, redo their downtown in something they’re calling Plant Portsmouth.

They’ll be painting light poles, scraping and painting all the curbs, replacing 120 streetlights, and more. “None of this has been done in 20 years,” said Jeremy Burnside, an attorney in town who got the idea started.

They’ll also be planting plants as a way of signaling the town’s rebirth.

Burnside’s hoping to set a Guinness World Record for the most people planting plants simultaneously.

(Folks — please send me photos from the day and I’ll post them here and on social media. #plantportsmouth)

Organizers have raised $75,000 from local businesses to pay for supplies. That itself is a sign of how locally owned businesses are now growing in Portsmouth. None of that money came from the chain stores and corporate fast-food restaurants that have dominated the town’s economy since things began to go bad in the early 1980s and the shops on its main street closed. (Btw, I bought a couple t-shirts, inspired by Dreamland and the community pool that was the source of my book’s title, from a company called 3rdand Court that began in downtown Portsmouth. Check them out.)

The antidote to opiates is not naloxone. It is community. I say this often in my speeches when I’m traveling around the country. We Americans have isolated and fragmented ourselves in a million ways – this in poor areas and in wealthy areas.  That left us vulnerable; it left us dangerously separate and disconnected from each other – strange to say in this time of technological hyper-connectivity.

The final expression of all that is our national epidemic of addiction to opiates – the most isolating class of drugs we know.

Rebuilding community (in a million different ways) is crucial to fighting it, I believe.

I’m glad to see Portsmouth leading the way on that, too.

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Filed under Dreamland, Drugs, The Heroin Heartland

Librarians and the Beauty of Surprise

On National Read Across America Day, I’d like to give thanks for local public librarians.

I find one of the great things to do is walk into a library and see what they’ve displayed as book suggestions. Mostly, what I love is the surprise. These books are almost always something interesting, quirky, something you hadn’t thought to read, or even ever heard about.

For writers, I think this is an essential endeavor. Reading widely, I’ve found, is so important. Putting yourself in the way of all kinds of ideas, people, modes of expression.

The library is where I find that. Mickey Spillane novels, nonfiction about municipal governance, biographies of some Japanese artist. I once read part of a book about the history of the word “Okay” because it was on display at my local library and the history of the word hadn’t occurred to me.

I don’t always finish these books – sometimes I take a brief excursion through them, is all.

But is it so worth it to stop in and see what’s on display!

My latest chance I took was on John Banville’s Time Pieces, which is an excellent piece of writing about Dublin, partly about his childhood, and some other stuff. I will finish that.

But I’m grateful that this community asset is available to me. So keep it up librarians, and many thanks for what you do!

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Filed under Culture, Writing

Community and CEOs

Folks who have heard me speak know that that community-building behavior by CEOs is something I admire and long for more of, nowadays particularly. Jack Brown, CEO of Stater Bros. Markets, is now my
hero.

A story in today’s LA Times reports the death of Mr. Brown, though folks in Southern California will recognize his comstater-brospany as a household brand name. We lived near a Stater Bros. Market when we were growing up and shopped there all the time.

Sadly, before his death, I was unaware of Brown’s story, of his philanthropy and decision to not move the company HQ from its base in San Bernardino, a tough town that didn’t need any more companies leaving. He founded the Boys and Girls club of San Bernardino and the Children’s Fund of San Bernardino.

Too often CEOs have their own wealth lining in mind. I’m reminded of the behavior of the CEO of Wells Fargo, who oversaw a lot of unethical stuff, then fired the mid-level folks who were allegedly ordered to perpetrate it, then retired with a $124 million paycheck.

The story of U.S. capitalism over the last generation or two is replete with guys behaving in this way. Shredded communities are the result. So is, if you ask me, our national opiate epidemic.

Communities, seems to me, are built by many people. But an important part of that are the decisions made by company owners and managers. Those decisions can crush, or enliven, a community. Too often, in the recent history of our country, it’s the former.

Sounds like Jack Brown retired fairly wealthy for doing the right thing. That’s the way it should be.

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Filed under Southern California, The Heroin Heartland

Good Day in Chillicothe

In Chillicothe, Ohio, the way I understand it, school janitors are heroes.

Many kids are growing up in families of addicts and have no place to go, their home studded with neglect and jagged edges; so they hang around after school. There, janitors have befriended them, bringing them food, IMG_1525giving them a sober adult to talk to and a calm place to hang out.

My family and I spent Thursday in Chillicothe, a southern Ohio town (pop. 21,000) bedeviled, as so many are, by the opiate-addiction epidemic.

I spoke all day long – a radio interview at 6:30 am, meetings with three groups through the day, and a 7 pm public talk at the Majestic Theater, the oldest (1853), continuously operated theater in America. Yet by the end I wasn’t exhausted; I was instead exhilarated by theCHILLICOTHE STUDENTS electric, intense response of people I met.

That’s how it’s been everywhere lately.

Writing Dreamland wasn’t arduous; it was engrossing. But it was also about a tough topic in which the worst of human behavior was on display. So I’m thrilled to see towns like Chillicothe using the book to come together, form alliances, leverage talent, talk about this problem in a way that hasn’t happened before, and do something hopeful.

Heroin seems to be having the opposite effect in Chillicothe that it has on users. If heroin isolates addicts into self-absorption and hyper-consumption, the drug also seems to be bringing people together to fight against it. I see this elsewhere as well and that’s encouraging. I know the problem is big. A new sporting-goods store delayed its opening in Chillicothe for months, I’m told, because it couldn’t find enough workers that could pass a drug IMG_1514test.

I wish I had a better answer to those who asked what to do about families where drug addiction is now generational, where the grandparents on down are using, where great-grandparents are raising their grandchildren’s kids. Kentucky Gov. Matt Bevin, the day before in Louisville, told me that his state is on the verge of losing an entire generation, swallowed up in a morass of dependence, unemployment and now opiates. Kentucky has more able-bodied, working-age people who aren’t working than those who are, he said. That feels scary.

Heroin, it seems, is the final nausea to afflict small towns and rural communities already crushed by the farm crisis, downsizing, outsourcing, the loss of local retail, depopulation, and more. It seems that heroin has IMG_1591pushed many places to a life-or-death moment.

Knowing that, though, I also can’t help but recognize the energy I’ve been encountering in the people I meet.

In manufacturing, as I understand it, innovation happens through immersion in the work, people knowing the production process so well that together they find new, small, better ways to improve on how to make something.

Fighting heroin, I believe, is the same. When people come together, work together, knowing their community and its problems, when they leverage their talents and energies, the solutions specific to that place will emerge. I believe that.

And just as manufacturing processes improve incrementally, in small steps, so this problem has no sexy silver IMG_1592bullet, I suspect, but will be best fought with a combination of tiny efforts, many partial solutions, none of which is perfect, but together amount to something powerful. That’s good. Haven’t we had enough, after all, of the one sexy solution to solve all our problems: Didn’t `one pill for all people and every kind of pain’ do enough damage?

While I was writing Dreamland, people seemed to work in isolation, cut off from each other. Parents of addicts seemed hidden, silent. That’s the biggest change I’ve seen. People have now started talking about this issue, forming new alliances, comparing notes.

In Chillicothe, we stayed in the Carlisle, a beautiful brick building, restored after many years empty due to a fire. A hospital group decided to move into downtown and refurbish the building, believing apparently that it served the community best by being part of the revival of its core. The Majestic Theater will soon get a renovation. Luckily, the town never tore down its old beautiful brick buildings, which are being repurposed. New retail businesses are opening downtown. A t-shirt shop sells shirts of companies that have left town. My daughter now has a shirt proclaiming “Chillicothe, Ohio.” So the town seems to be rebounding, even as it battles this debilitating scourge. Maybe that’s the story – complicated, and not easily or neatly told.

I want to thank the people of Chillicothe for so hospitably welcoming my family and me. Thanks to Hudson Ward, at the Carlisle.

Thanks especially to Nick Tepe, the county’s head librarian, for organizing folks to bring us to town. Librarians ought to be playing exactly this kind of role in communities, and Ross County, Ohio seems to be blessed with a talented one.

Next, I’m heading to Knoxville, for the International Tuba and Euphonium Conference. And from there to Springfield, IL to speak to a conference of that state’s rural hospitals.

Meanwhile, Chillicothe had an annual street fair going while we were there, known as The Feast:

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Filed under Dreamland, Drugs, Storytelling, The Heroin Heartland

Pope Francis, Community and Heroin

I’m speaking at Notre Dame University today, the day that Pope Francis gave his beautiful talk to Congress.

What struck me about his speech was not just what he said, for we’ve heard some of that before, though it never gets old. But what struck me most was the way he said it: softly, slowly, building each idea logically on the last.

We live in an era of bombast. It is everywhere. It’s not just Donald Trump, who personifies it, in my opinion. It’s loud-mouthed, poorly spoken athletes on ESPN. It’s crank screechers on 24-hour news and talk raIMG_3652dio. Reality show bimbos. It’s the babble of unimportant breaking news that takes up so much space on newspaper websites. The constant yammer on Facebook about stuff that is really personal and ought to be kept that way. We never get a minute to ourselves, it seems.

Of course, our national politics is infected with it. Congress appears incapable of doing anything but taking one extreme or the other. Talking points – that’s an interesting concept. “Talk to us about X…” is another – just open your mouth and start talking, implying that thought doesn’t need to occur first.

Thus it was so therapeutic to walk along the quiet paths of the school’s campus and listen to Pope Francis use terms like “cooperation,” “union,” “community.” It was sweet to hear him talk about the monk Thomas Merton.

These themes – or the lack of them in our civic life – are integrally wrapped up in why we have so much heroin abuse in America today.

I believe we’ve spent decades destroying community, mocking and clawing at the girdings of government that provide the public assets and infrastructure that we took for granted and that make communal public life possible. We exalted the private sector, and accepted the free market as some infallible God and thus allowed, encouraged even, jobs to go overseas.

We seemed to fear the public sphere. Parents hover over kids. Alarmed at some menace out in public, they accompany their kids everywhere they go. It all seems connected to a fear of pain, an idea that we can avoid pain, avoid danger.  As a country, meanwhile, we have acted as if consumption and the accumulation of stuff was the path to happiness.

We’ve built into our suburbs an isolation that we called prosperity. Added to that mix was the expansion of technology that connects us to the world but separates us from our next-door neighbor.

We wound up dangerously separate from each other – whether in poverty or in affluence.

Kids no longer play in the street. Parks are under-used.

Why then do we wonder that heroin is everywhere?

Heroin turns every addict into narcissistic, self-absorbed, solitary hyper-consumers. A life that finds opiates turns away from family and community and devotes itself entirely to self-gratification by buying and consuming one product – the drug that most makes being alone not just all right, but preferable. It is the final expression of values we have fostered for 35 years.

I believe more strongly than ever that the antidote to heroin is community – doing things with neighbors in public in a way that once came quite naturally.

That’s why I also loved Pope Francis’s speech. He seemed to be touching on the stuff that troubles us as a country most deeply  – and for which heroin is just the latest, though perhaps most potent, symptom.

And he did so quietly, softly – which I hope meant that people heard him more clearly.

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Filed under Dreamland, Drugs, Global Economy, Los Angeles

Another Family Steps Up – D.J. Wolanski RIP

Another family has stepped up to acknowledge in an obituary that a child has died of a heroin overdose.4318752_300x300_1

Daniel Joseph “DJ” Wolanski, of Mahoning County in Ohio, died April 20. Read his obituary.

It must be so difficult for this family to come forward and say this publicly. But this scourge has spread because so many people before them have kept quiet, allowing the rest of us to imagine that the problem really isn’t as bad as it has become.

So it’s important to acknowledge the courage of those who do step up, speak publicly.

The obituary reads….

“Over the course of DJ’s life, he made many bad decisions including experimenting with drugs. Unfortunately, his five year addiction and battle with heroin took over. His family and friends truly loved him and tried everything from being supportive to tough love as he struggled with his own inner demons and heroin. …

“DJ often talked about the growing number of friends that he had lost to this destructive drug and how it destroyed families. They used to say it takes a community to raise a child. Today, we need to say that it takes a community to battle addiction. Someone you know is battling addiction; if your “gut instinct” says something is wrong, it most likely is. Get involved. Do everything within your power to provide help. Don’t believe the logical sounding reasons of where their money is going or why they act so different. Don’t believe them when they say they’re clean.”

Profound words – the way to attack a drug that turns every addict into a silo, a loner wrapped in a cocoon – is through community.

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Filed under Books, Drugs, The Heroin Heartland, Uncategorized