The Life and Legacy of Sam Walton, Founder of Walmart
Sam Walton, founder of Walmart—one of the world's largest corporations—and one-time richest man in the world left an estimated $100 billion fortune to his wife and four children when he died. Known as Mr. Sam, Walton was an Eagle Scout, served as an Army captain during World War II, was an avid hunter and outdoorsman, and lived humbly. He had a hard-charging, demanding style, often starting work at 4:30 a.m. Walton was an innovator in business growth, discount retailing, supply chain management, and business financing.
In this profile, we will examine interesting facts about Walton, his educational background and foray into the discount retailing sector.
Sam Walton was born on March 29, 1918, to Thomas Gibson Walton and Nancy Lee Walton near Kingfisher, Oklahoma.
Sam Walton passed away April 5, 1992, at the University of Arkansas Medical Sciences Hospital in Little Rock, Arkansas.
Sam attended the University of Missouri where he was elected senior class president. To pay the tuition bill, he worked as a lifeguard, waiter, and maintained a newspaper delivery route of 160 customers. Following graduation, he aspired to attend the Wharton School of Business at the University of Pennsylvania, but quickly found he couldn't afford it. Instead, he took a job as a manager trainee at J.C. Penney in Des Moines, Iowa. Today, the at the University of Arkansas bears his name.
After his 18-month stint at J.C. Penney, Walton knew he wanted to go into retailing. He began reading everything he could on the subject and visiting different stores. While still operating his Ben Franklin franchises, Walton approached Herbert Gibson, founder of an already-successful discount chain in the south, to discuss the possibility of a partnership. Rebuffed for having too little capital, Walton decided to go it alone from scratch.
The first opened in 1962 in Rogers, Arkansas. Originally, stores were located within a day's driving distance from the company's distribution center to ensure almost instantaneous restocking. Sales increased from $313 million to $1.2 billion during the 1970 to 1980 period while the number of stores increased 8.5 fold. Much of this increase came from bank debt, which was largely paid off with the proceeds of the company's 1970 initial public offering.
In 1991, Walmart surpassed Sears, Roebuck & Company to become the country’s largest retailer. Sears fell to third place after Walmart and Kmart. In that same year, as the country was mired in an economic downturn, Walmart increased sales by more than 40 percent.
Supply Chain Brilliance
Walton's supply chain was so efficient he would order a product and have it sold in three days while only having to pay his vendor every thirty days. This rapid inventory turn continues at the company today.
Technology & Walmart
Sam Walton's brilliance was evident in the way he had the company embrace technology. In the early 1980s, the business was one of the first to utilize to automate the inventory process. In 1983, the business spent tremendous amounts of capital on a private satellite system that could track delivery trucks, speed credit card transactions, and transmit audio and video signals, as well as sales data.
In more recent years, Walmart has introduced online ordering with free pickup and mobile apps. Today, Walmart is one of the largest companies in the world, with a market capitalization of more than $275.8 billion as of November 2018.
- Walton opened his first store, a Ben Franklin franchise, in Newport, Arkansas, on September 1, 1945, after his wife insisted she would not live in a town of more than 10,000 people. In less than two decades, he owned 15 of the franchised stores.
- Even after becoming a billionaire, Walton drove a pickup truck and wore clothes from his own discount store, Walmart.
- In 1984, Walton bet his store managers they could not earn a pretax margin larger than 8 percent. He said if he lost, he would dress in a grass hula skirt and floral shirt. They did. He lost. He did.
Mr. Sam's Legacy
From the Walmart website:
Sam Walton died in 1992, shortly after receiving the Medal of Freedom, but his legacy lives on. To this day, Walmart remains a leader in the retail industry. We are committed not just to expanding the business to better serve our customers, but also to improving the communities we serve through our efforts to constantly improve what we do and how we do it, and through the impacts we're able to achieve through the Walmart Foundation. Through this daily dedication to our business and our customers, we honor Mr. Sam.