Control the Controllables'

Control the Controllables'

An energetic new division president for Beall's knows the department store chain has succeeded by knowing the Florida consumer. She also knows the economy and competition present serious challenges.

RETAIL by Mark Gordon | Managing Editor

With a resume that includes running a division of one of the largest retailers in Texas by the time she was 30, it would be hard to consider Lana Cain Krauter soft when it comes to business principles or accomplishments.

Yet going soft is what redefined Cain Krauter's career.

At least it did in 1997 when, as a senior executive with Sears, Cain Krauter led a marketing team that came up with the Softer Side of Sears slogan. For a billion-dollar global department store chain known more for its real man stuff such as Die-Hard car batteries and Craftsman tools, the slogan was both provocative and timely.

"Here we were doing this little apparel business that no one cared about," recalls Cain Krauter. "It was a rally point [and] a pivotal ad for the company."

But even greater than the short-term boost at Sears that followed the ad campaign was the lesson in speaking to the customer that Cain Krauter learned from that experience.

It's a lesson she would take to her next three retail industry executive posts, which, like Sears, all included a turnaround component: As president and chief marketing officer of Knoxville, Tenn.-based clothing chain Goody's Family Clothing; as an executive vice president in charge of the $5.3 billion men and children's apparel unit of JCPenney's; and as of April, as president of the 86-store retail division of Beall's, a Bradenton-based department store chain.

It's a career that has twice landed Cain Krauter in the Power 100 for retail executives, a list published by industry trade magazine DNR News.

Says Cain Krauter, of the softer Sears campaign: "It taught me a lot about how important it is to talk to the customer with humor and self-efficacy."

Cain Krauter, 56, will now have to keep those lessons on front-window display. Eight months into her Beall's job, one she knew would be full of challenges, she's facing even more potential difficulties. That is, now she's not only facing the prospect of multiple and fortified competitors, she's doing it an economy significantly worse than when she took the job.

So much so that Cain Krauter's boss, Beall's chief executive Steve Knopik, considers the current downturn to be the worst economy in 50 years, a crisis only heightened by being in Florida, where he says "the economic picture is clearly among the worst of any state."

Big dollars are also at stake in Cain Krauter's role running the department stores, known internally as BDS. While the parent company, Beall's Inc., doesn't break out financial figures by division, in total it's one of the largest companies on the Gulf Coast, with about $1.3 billion in 2008 revenues. Company executives are hesitant to project 2009 revenues, citing the volatility of the economy and the retail industry.

Florida lifestyle

Cain Krauter's first move since she was hired was to rethink the front entrance of all of the stores. Says Cain Krauter: "The most important thing in my mind is when a customer walks into our front door, what does he or she see?"

In years past, a customer's entrance was framed by what Cain Krauter called big barge like structures, selling mostly home products. "It was big and blocking," says Cain Krauter.

Now the greeting spot is a set of five mannequins, which change themes every month. Purple was the color of the month for women recently, for instance, while men were dressed in teal.

Cain Krauter then went through the entire store, tweaking some sections while making bigger changes to other areas. In her first eight months, she has also invited representatives of a dozen or so of the store's most prominent brands to come to Bradenton, to work on product placement and drive sales.

And the accessories department, once a mishmash of jewelry, handbags and scarves, was redone, with an emphasis on less is more. "We were overstocked," says Cain Krauter. "Now we are carrying less and doing more business."

On a bigger picture scale, Cain Krauter is learning the internal parts that make Beall's tick. A big one, for example, is that unlike some other department stores, Beall's essentially has two major sales seasons - one for the holidays and one for spring, when Florida's population expands with snowbirds and visitors.

In practice, that means Beall's has to be nimble with its inventory, ready to change things quickly. Cain Krauter is taking that into account as she follows the long-held theme at Beall's: The store sells Florida better than any of its competitors.

It's a philosophy that has come into greater focus lately, especially as Menomonee Falls, Wisc.-based Kohl's opens more stores on the Gulf Coast. "Let JCPenney's and Kohl's have the tailored clothing business and let them have a contemporary woman's sportswear business," says Cain Krauter. "We really want Florida to understand that we know them like nobody else does."

That confidence is rooted in something Cain Krauter learned from a mentor at JCPenney's: "Control the controllables." By that, Cain Krauter learned that in retail there are many different moving parts that make a store go, but the key is to focus on the things you can have real control over.

Passionate career

Knopik is one of several retail executives, both inside and outside of Beall's, that are confident Cain Krauter is the right person at the right time to be put in control of the company's department stores. "She's got merchant's personality," says Knopik. "She's always thinking about who's doing what and who's selling what."

It's that intellectual curiosity, combined with her boundless energy and her ability to get to the root cause of a problem, that made Cain Krauter such a good boss to work for, says Debbie Harvey, a former Beall's executive who also worked under Cain Krauter at Goody's.

"Lana is an incredible executive," says Harvey, now president and chief operating officer for Cocoa Beach-based retailer Ron Jon Surf Shop. "She is very good at getting people to move in her direction."

Cain Krauter replaces Conrad Szymanski, a longtime Beall's executive who moved over to run the company's 470-store outlet division in July 2007. From then until the company hired Cain Krauter in April, Knopik led an executive committee that oversaw the department stores.

Knopik says he took his time in conducting a national search for a division president, as he had several items on his wish list he considered to be too important to compromise on. That list included finding someone who grew up in the merchant side of the retail business, not operations or finance and selecting a candidate who could fit into Beall's folksy yet focused culture.

And Cain Krauter hasn't disappointed. "She's done a terrific job of making a lot of progress in a pretty short period of time," says Knopik. "She's definitely earned her keep around here."

Cain Krauter also brings a familiar entrepreneurial sprit to Beall's, a company founded in Bradenton by Robert Beall, Sr. in 1915, originally as a dollar store selling mostly dry goods. The senior Beall's son and grandson later took on leadership roles in the company, building it up from that first store in a series of methodical decisions.

As opposed to gradually finding her way like that, Cain Krauter discovered her entrepreneurial drive in an instant as a 17-year-old, growing up in a small town near Austin, Texas. That's when her father, who had a series of entrepreneurial jobs, from running a dry cleaning store to buying cotton for mattress makers, died unexpectedly.

The financial struggles her family went through in the proceeding years were an epiphany for Cain Krauter. "I decided that I would always have a career and protect myself personally and not rely on anyone else for my livelihood," says Cain Krauter. "I would be self-reliant and pursue a career that I was passionate about."

Top mentors

At first, that passion was interior design, a job she picked up at a custom bridal shop near Austin soon after graduating from the University of Texas. After a few years, the store promoted her to buyer, a new and exciting world that Cain Krauter fell in love with. "What young girl wouldn't like to go to New York and look at all the pretty clothes?" asks Cain Krauter.

That job led to a half-a-dozen or so more retail jobs, almost all of them in the moderate priced retail segment Beall's is in. In fact, one of her first executive jobs was with Houston-based Specialty Retailers, the parent company of a chain of retail stories in Texas under the Bealls name, which has no connection to the Florida Beall's.

By 1997 Cain Krauter was at Sears, which was in the midst of an internal character identity struggle that spilled over to sales. The store was stuck between its tough guy image and being a department store with broader appeal.

In addition to the Softer Side slogan, Cain Krauter says her eight years at Sears was valuable because of her mentors. It's a group that included Bob Mettler, a well-known national executive who now runs Macy's West and Arthur Martinez, the onetime chairman of the company, credited by many for temporarily staving off bankruptcy.

Like those executives at their own stores, Cain Krauter has bold plans for Beall's. While nothing is official, that could include leading an expansion of the department store division outside of Florida, which would be a company first. She also plans to build on steps she's already taken.

"What we have done in six months is amazing," says Cain Krauter. "I love the speed and entrepreneurship of what we are doing."

REVIEW SUMMARY

Businesses. Beall's, Bradenton

Industry. Retail

Key. Company hired Lana Cain Krauter, twice named as one of the top 100 executives in the retail industry, to run its department store division.

More tough times?

Bradenton-based retailer Beall's has long pitched the idea that it sells the Florida lifestyle better than anyone else. But don't look to chief executive Steve Knopik for a ray of Florida sunshine to brighten the gloomy economic outlook.

Indeed, the outlook at Beall's, especially for the first two months of 2009, is so tough that Knopik declines to even offer an annual sales projection. The company reported about $1.3 billion in 2008 revenues.

"Business in Florida will continue to be very difficult in 2009," says Knopik. "Consumer spending is scaling back because I think consumers are realizing they need to start saving more and spending less. I don't see that situation correcting itself in a jiffy."

Executive Tips

Lana Cain Krauter, hired as president of the department store division of Bradenton-based retail chain Beall's in April, is now part of a 93-year-old company. In addition to the business challenges of her new position, Cain Krauter has had to find her way in a new company culture.

Here are some of her tips for other executives taking on a leadership role in an established company:

It's not about you, says Cain Krauter. "It's about the culture of the company," she says, "and how you enhance, retain and lead a high performance team."

Empower others. "Great leadership," Cain Krauter says, "is achieved through empowerment of others to accomplish strategic goals."

Continuously focus on the customer by being innovative. "Never get comfortable with the status quo," says Cain Krauter.