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Show GRIMM DETERMINATION Building a multimillion-dollar enterprise probably would be enough success for most business executives. But Weber State alumnus Thomas R. Grimm has a higher standard. “Succeeding means more than financial gain,” says Mr. Grimm, the founder of Price Savers Wholesale Inc. “It involves the way you treat people and how well those people succeed while they work with you. If you’re the only success story in your organization, you may actually be a failure.” No matter how success is determined, Mr. Grimm, 46, seems to measure up. Under his guidance, Price Savers evolved in five years from a single outlet in Utah to a chain of 17 wholesale warehouses in five states. The business became the sixth-largest wholesale club operation in the United States. It also was rated one of the most successful. When Mr. Grimm and his fellow investors sold the business to Pace Membership Warehouse Inc. last December, Price Savers employed more than 3,000 people nationwide and produced annual sales of $850 million. “At that point, we did the best thing we could possibly do for our company and our people,” Mr. Grimm says. “We sold the business.” With the sale, Pace Membership Warehouse, a subsidiary of K Mart, became the fourth-largest wholesale-club chain in the nation. The sale also benefited Price Savers. “The deal made good sense for our employees,” Mr. Grimm says. “It secured the future for many of them. | think that’s real success.” Mr. Grimm got a late start on his own road to success. Working full time to support his wife and two children, he had to extend his college career at Weber State beyond four years. By the time he graduated with a business management degree, he was older than most of his classmates. Mr. Grimm made up for lost time when he entered the business world. He worked in retail management for several discount chains outside Utah. Then he returned to Salt Lake City to manage general merchandise for Grand Central stores. Finally, he left Grand Central to focus on a new business phenomenon—wholesale membership clubs. The concept was pioneered by a Californian who opened a San Diego membership warehouse called Price Club in 1976. Warehouse membership clubs were still in their infancy when Mr. Grimm began investigating the business in 1983. They accounted for less than | percent of all U.S. merchandise sales. Mr. Grimm visited Price Club, Sam’s Warehouse Club (a Wal-Mart subsidiary) and Pace Membership Warehouse outlets. At each stop he discovered great opportunities as well as significant weaknesses. “Most operators had the right attitude,” Mr. Grimm explained, “but they weren’t providing the right mix of merchandise. They weren’t cleaning up their buildings, either. I decided to put more effort and sophistication into the warehouse concept.” Mr. Grimm took his ideas to Seattle-based Pay ‘n Save, where he won financial backing for the first Price Savers warehouse in South Salt Lake. By 1990, Price Savers was averaging $50 million in annual sales in each of its 17 warehouses. Meanwhile, most larger chains were struggling to break even at $35 million. “We were consistently ranked second in industry sales,” Mr. Grimm says. “Once in a while, we'd be nip-and-tuck for first.” Price Savers was “the innovator among warehouse clubs,” Mr. Grimm says. “We taught the industry a lot about how to clean up its act and how to stock the right merchandise. We created the concept of quality in the industry.” Mr. Grimm remained at the helm of the warehouse chain through two major ownership changes. in 1985, Pay ‘n Save sold Price Savers to Kroger Supermarkets of Cincinnati. Four years later, when Kroger was threatened with a hostile takeover, Mr. Grimm and a management group purchased the warehouse chain’s assets. Last year, Mr. Grimm and his partners received a merger offer they couldn’t refuse. It came from K Mart through its Pace Membership Warehouse chain. “We had very talented people capable of bat- tling against anyone,” Mr. Grimm says. “But K Mart was spending $440 million a year for expansion in this industry. They could have made it very difficult for us.” Mr. Grimm and the company’s board of directors agreed that it would be best for Price Savers to turn over the business to someone with “deep pockets.” Pace Membership Warehouse stepped forward with the right offer. “Price Savers made a lot of money for several different groups of people,” Mr. Grimm says. “I’m very proud of that. We spent a great deal of time working with our people to create an environment in which they could succeed.” Price Savers was absorbed by the Pace chain with minimal inconvenience for customers and employees, Mr. Grimm says. The Price Savers warehouses officially became Pace outlets in August. Some 50 employees were transferred to Pace corporate headquarters in Englewood, Colo. About 60 new employees were hired to operate fresh produce departments added to the chain’s Utah warehouses. Mr. Grimm says he has a new company now — Part II, Inc. — that will soon enter the merchandising marketplace with a new concept that promises to be “exciting and fun.” Meanwhile, Mr. Grimm says, he plans to remain active with the platform committee of the Utah Republican Party and on business-school advisory panels at Weber State, Westminster College and the University of Utah. The purpose of those academic boards is to help academic leaders better prepare young business-school graduates for real-world challenges, he says. “When I finally got out into the business world I wasn’t as well prepared to make a living as I thought I was,” Mr. Grimm says. “But I was able to adapt quickly because I had a good, solid education from Weber State. “Through the advisory panels, we try to keep young graduates from being caught by surprise as I was.” |