Leon Levine, retail contrarian who founded Family Dollar, dies at 85

Leon Levine, a college dropout who in 1959 emptied his bank account of $3,000 to found Family Dollar, growing it from a single store in downtown Charlotte into one of the country’s most successful discount retail chains, died April 5 at his home in Charlotte. He was 85.

His death was confirmed by Thomas W. Lawrence III, the president of the Leon Levine Foundation, who did not cite a cause.

Mr. Levine, running Family Dollar alongside relatives and later his son, competed with malls and big-box stores in building a Fortune 500 company that landed his family on Forbes magazine’s list of the richest Americans, with a net worth of $1.4 billion in 2015.

When Mr. Levine retired as chairman in 2002, Jim Hance, then the chief financial officer of Bank of America and a Family Dollar board member, called him “a giant in the retail industry” with a “track record equaled by few companies.”

Mr. Levine’s approach to retail was contrarian.

As malls and big-box discounters such as Walmart and Kmart began popping up in America’s suburbs during the 1960s, Mr. Levine focused on lower-income neighborhoods in cities and rural areas, selling family staples such as batteries, socks, underwear, toiletries and makeup at steep discounts.

Family Dollar stores were small — never more than 8,000 square feet — so shoppers could zip in and out.

“There’s a convenience factor,” George R. Mahoney Jr., the company’s senior vice president, told Business North Carolina magazine in 1987. “You can see the entire store when you walk in, and there are no long lines at the checkout counter.”

Customers also didn’t need to drive a half-hour to buy Kleenex. Retail market analysts likened Mr. Levine’s strategy to 7-Eleven.

“Family Dollar is to Walmart what the local 7-Eleven is to the supermarket,” retail analyst Linda Morris told the Associated Press in 1993.

Mr. Levine stayed intensely focused on lower-income neighborhoods. To identify communities for expansion, he visited grocery store parking lots, where he would search for splotches of oil — a signal that residents in the area drove old cars and didn’t have a lot of money for repairs. The more oil, the better.

He was equally crafty in keeping costs down. Stores were minimally staffed, sparsely decorated and he was a brutal negotiator with suppliers. On visits to their showrooms, Mr. Levine would wait until nobody was inside. Then he would walk in and say to the sales representative, “I see business is slow, what can I help you with?”

By 1984, Family Dollar had 850 stores in 17 states. Sales were $341 million a year. Expansion quickened. In 1989, the chain grew to more than 1,500 stores. By the mid-2000s, Family Dollar had more than 5,000 locations and sales topped $5 billion.

Eventually, Walmart’s brutal low pricing caused strain on Family Dollar’s business, as it struggled to match the big-box retailer’s prices and global supply chain.

There was also internal company strife, with several of Mr. Levine’s family members, including his son, leaving the company after boardroom battles over strategy.

Competitors also emerged, including Dollar General, which bought Family Dollar in 2015 for $8.5 billion.

Leon Levine was born on June 8, 1937, in Wadesboro, N.C., and grew up in Rockingham, a town about 70 miles southeast of Charlotte. His parents owned a small department store called the Hub.

When he was 12, his father died of a heart attack, leaving him and his brother Sherman to help their mother run the store. Leon took his new responsibilities seriously. At age 15, he had business cards printed on which he identified himself as vice president.

His mother taught him about customer service and inventory.

“I learned a lot about business and people in that store,” he later said. “You quickly learned the customer is the most important person.”

While attending Wingate College (now a university), Mr. Levine and his brother started a company that made bedspreads. Another brother, Alvin, had moved to Charlotte to open a discount store called Pic ’N Pay. In 1959, Mr. Levine and his brother sold the bedspread company and went to work at Pic ’N Pay.

Mr. Levine knew he was never going back to college. He also knew he wanted a business for himself. Having heard about a retailer in Tennessee selling everything for less than $1, Mr. Levine decided to slightly innovate on that concept. With $3,000 — all the money he had in the bank — Mr. Levine opened the first Family Dollar in downtown Charlotte, selling everything for less than $2.

(The everything-for-less floor eventually rose, with inflation and competition, to $17.99.)

Mr. Levine married Barbara Leven in 1958. She died in 1966 from breast cancer. A second marriage ended in divorce.

Survivors include his third wife, the former Sandra Poliakoff, whom he married in 1978; two children from his first marriage, Howard Levine and Lori Sklut, both of Charlotte; a daughter from his third marriage, Amy Dawson of Charlotte; 11 grandchildren; and two great-grandchildren.

After he retired, Mr. Levine spent the rest of his life giving away his vast wealth, providing hundreds of millions of dollars for scholarships, hospitals, museums and Jewish organizations.

Mr. Levine and his wife rarely gave interviews, but in 2004 they agreed to speak with a Charlotte Observer reporter.

There weren’t any major revelations about his life, though the reporter noted that Mr. Levine sometimes wondered how successful he would have been had he graduated from college.

Also, he liked good deals on groceries, which he bought at Costco.

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