Dive In Retail: Away from the limelight, little sign of commitment

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The retail industry’s diversity record came under fire in the NAACP’s Economic Reciprocity General Merchandising Industry 2003 Report Card. Retail is the second-largest industry in the United States, employing more than 23 million Americans and generating more than $3 trillion in sales annually. Eleven percent of businesses owned by African-Americans are in the retail trade, according to the most current U.S. Census figures. However, 53 percent of African-American-owned businesses provide services, many of which are applicable to the retail industry.

The NAACP’s report card, which gives retail a failing diversity grade, is part of the organization’s Economic Reciprocity Initiative that annually measures corporate America’s commitment to people of color. It was the initiative’s first analysis of the general merchandising industry. With the spending power of African-Americans at $687 billion in 2003, and estimated to reach $921.1 billion by 2008, the report seeks to “provide customers with the tools for empowerment, enabling them to make educated decisions about where to spend their dollars in the general merchandising industry,” the NAACP says.

For this article, TNJ focused on the top 10 publicly traded retail companies headquartered in the New York-New Jersey area. The University of Georgia’s Selig Center for Economic Growth projects that for 2003, New York will rank No. 1 among the 10 states with the largest African-American markets, with an African-American buying power of $65.5 billion. The companies on TNJ’s top 10 list are ranked according to their 2002 revenues, as published in Crain’s New York’s 2004 Book of Lists. While the NAACP report surveyed companies for their activity in employment, vendor development and contracting, advertising and marketing, community reinvestment and philanthropy, TNJ concentrated on diversity activity in senior management and vendor contracting, given the demographics of the magazine’s readership. The reporters were instructed to obtain information on each company’s diversity program and its annual spending with minority vendors, as well as the name and position of the highest-ranking African-American in each company.

Toys “R” Us Inc.

One on the world’s largest toy retailers, Toys “R” Us in Wayne, N.J., boasts six divisions, including Babies “R” Us, Kids “R” Us and Imaginarium. In 2003, the company reported total sales of $11.57 billion with 1,500 stores worldwide. With full-year revenues of $11.3 billion in 2002, it is No. 1 on our list of the top 10 retailers in New York-New Jersey.

According to a company spokesperson, Toys “R” Us has had a “diversity type” program in place for at least 15 years that includes diversity training. The program is administered by the human resources department. Melinda Maluga, director of human resources and corporate campus and diversity, is not “authorized to conduct interviews,” the spokesperson said. Asked to name the highest-ranking African-American on staff, the spokesperson said Toys “R” Us does not reveal the ethnic breakdown of its staff to the public, only to government agencies upon request.

Great Atlantic & Pacific Tea Co.

From its beginnings in 1859 on Vesey Street in Manhattan selling tea and spices to a mostly immigrant clientele, the Great Atlantic & Pacific Tea Co., now based in Montvale, N.J., has morphed into the giant A&P supermarket chain, with more than 645 stores and 11 other retail banners, including Waldbaum’s and The Food Emporium in the United States, and Dominion and The Barn Markets in Canada. It also has its own product brands: America’s Choice, Master Choice, Health Pride and Savings Plus, Equality, Master Choice, Body Basics and Basics for Less. Sales from operations in both the United States and Canada total some $11 billion annually.

At press time, the company had not responded to our request for an interview or information. Listed on its Web site, however, is the booklet, “Code of Business Conduct & Ethics.” The section headed “EEO and Discrimination Laws” reads: “The company requires strict adherence to its policies and the laws regarding Equal Employment Opportunity and discrimination in the workplace.”

There was no information on the company’s relations with minority vendors in the business conduct and ethics code. The section titled “Relationship with Suppliers” notes that the company encourages “good supplier relations.”

Barnes & Noble Inc.

Opened in 1917, literary leviathan Barnes & Noble is the largest bookseller in the world, with more than 600 locations. In addition, it owns 195 B. Dalton bookstores across the country. Annual sales in 2003 were $5.3 billion. “Barnes & Noble has a diverse work force. As a matter of company policy, we recruit and employ booksellers of all ethnic backgrounds, without bias to gender, sexual orientation, color, creed, disability,” Mary Ellen Keating, senior vice president, corporate communications, told TNJ. “In fact, Barnes & Noble was one of the first employers to offer domestic partnership coverage.”
Keating noted that the company has “a very strong Latino work force” in New Jersey and in Nevada, with 80 percent of the entire work force in its warehouse facilities Latino. Sixty percent of the entire work force is female. “The employment population in our stores reflects the communities we serve,” the spokesperson said.

Foot Locker Inc.

New York-based Foot Locker Inc., the world’s largest retailer of athletic footwear and apparel, in 2003 had a work force of more than 45,000 and more than 3,600 stores in 16 countries. Its brands include Champs, Lady Footlocker and Baby Footlocker. In March, Foot Locker reported full-year sales ending Jan. 31, 2004, of $4.8 billion, up from $4.5 billion the previous year. Matthew D. Serra, chairman and CEO, says capital expenditures of $165 million are planned for 2004, and include the opening of 110 new stores.

A company spokesman acknowledged receipt of TNJ’s request for information on diversity policies, but no further contact was made up to press time. In its Code of Business Conduct, Foot Locker says it is committed to maintaining an environment free of discrimination based on race, color, religion, gender, age, sexual orientation, national origin, disability “or other factors that are unrelated to our legitimate business interests.”  Fair and lawful human resource policies and practices are applied “in all aspects of employment, including recruiting, hiring, evaluation, training, discipline, career development, compensation, promotion and termination,” the code says. Marc Williams, senior national brand director for Champs Sports, a division of Foot Locker, is one of the few African-Americans in the athletic wear sector in charge of national retail marketing, advertising campaigns and sponsorships. The selection of suppliers, contractors and professional services providers is based on “merit and business-related criteria,” the code says.

A Selig Center report, “The Multicultural Economy 2003,” shows that Blacks spend a higher proportion of their income on shoes than any other ethnic group.

Bed Bath & Beyond Inc.

No. 5 on TNJ’s top 10 list, Bed Bath & Beyond is a nationwide chain of superstores selling predominantly better-quality domestics merchandise and home furnishings. As of Nov. 29, 2003, there were 569 Bed Bath & Beyond stores operating in 44 states and Puerto Rico. Fiscal 2003, ended Feb. 28, 2004, was the company’s 12th consecutive year of record earnings. Net sales for the year were $4.478 billion, an increase of approximately 22.2 percent from the prior fiscal year, the company reports.

Up until press time, no one had responded to TNJ’s request for information and an interview. A statement on the Union, N.J., company’s Web site, outlining its “commitment to equal opportunity and diversity,” focuses exclusively on employment and the work environment, noting that Bed Bath & Beyond “celebrates” diversity. Vendor relationships are not mentioned.

Tiffany & Co.

Internationally renowned Tiffany & Co. retails, designs, manufactures and distributes fine jewelry, timepieces, sterling silverware, china, crystal, stationery, fragrances and accessories. Founded in 1837, the company boasts 100 stores in the United States and overseas. Tiffany’s mission, according to the company’s official statements, is to be “the world’s most respected jewelry retailer,” which explains a key component of its growth strategy: expanding its channels of distribution in important markets worldwide.” For the full year ended January 31, 2004, net sales rose 17 percent to $2.0 billion and net earnings increased 13 percent to $215.5 million. Retail sales in the United States, which represented 47 percent of 2003 net sales, rose 16 percent to $948.9 million in the full year. Tiffany chairman and CEO Michael J. Kowalski estimates 11 percent to 13 percent growth in net sales and 12 percent to 15 percent growth in net earnings for 2004.

A spokesperson for the company says Tiffany’s has no formal program for diversity. A Code of Conduct on the company’s Web site “embodies rules regarding individual and peer responsibilities, as well as responsibilities to the Company, the public and other stakeholders “ and does not address diversity.

Ann Taylor Stores Corp.

A leading specialty apparel retailer for the professional woman, Ann Taylor operates 651 stores in 43 states, the District of Columbia and Puerto Rico. The Ann Taylor brand is marketed under Ann Taylor, which caters to the successful, relatively affluent career woman, and Ann Taylor Loft, an “upper moderate” priced category for “value conscious women with a more relaxed lifestyle both at work and at home.” The company’s net sales totaled just over $1.5 billion in fiscal year 2003, ending Jan. 31, 2004, up 15 percent from approximately $1.4 billion in fiscal 2002. Total store count at the end of fourth quarter 2003 was 648, comprising 354 Ann Taylor stores, 268 Ann Taylor Loft stores and 26 Ann Taylor Factory stores.

At press time, Ann Taylor’s public relations department had not spoken to TNJ regarding a request for information on its diversity policies, although a reporter was informed earlier that the request had been forwarded to that department. No mention is made of diversity on the company’s Web site. In its “Values and Practices” statement, however, the company declares a commitment to “helping people be at their best.”

A telephone call from someone who identified himself only as an administrative assistant said the company “is in the process of developing a diversity training program as we speak.”

Duane Reade Inc.

At Duane Reade Inc., the largest drugstore chain in the metropolitan New York City area, minorities make up 14 percent to 20 percent of the senior staff, says Jim Rizzo, vice president of human resources and administration. Lisa Johnson, director of recruitment, is the highest-ranking African-American, with responsibility for hiring management pharmacists and filling general positions. While the company does not administer a specific diversity program, it actively recruits from the diverse population in the city, Rizzo says. White employees account for 44 percent of workers with the remaining 56 percent drawn from other ethnic groups. Rizzo said Duane Reade solicits the help of inner-city social programs for recruitment and the company’s buyers work with minority suppliers, though not as part of a special program.

At the end of 2003, the company owned 241 stores and recorded sales of $1.4 billion at the end of fiscal 2003 (Dec. 27, 2003).

Finlay Enterprises Inc.

One hundred and seventeen-year-old New York-based Finlay Enterprises Inc. is the largest operator of leased fine jewelry departments in stores in the United States, operating, as of Feb. 1, 2003, in 1,011 locations nationwide with average annual sales of close to $1 billion. Host stores include The May Department Stores Co., parent of Filene’s, Hecht’s and Lord & Taylor; Federated Department Stores, parent of Bloomingdale’s and Burdine’s; Saks Inc., Marshall Field’s, Belk, Dillard’s, Bon Ton, Gottschalk’s and Elder Beerman.

Finlay’s buyers, according to an official statement, “focus on sourcing product, searching the market and working with the vendor community to buy or create appealing new merchandise at attractive price points.” Section XI of the company’s Code of Business Conduct and Ethics, entitled “Discrimination and Harassment,” expresses a commitment “to providing equal opportunity in all aspects of employment.”

The company’s senior officers are listed on its Web site as Arthur E. Reiner, chairman and CEO; Joseph M. Melvin, president and COO; Leslie A. Philip, executive vice president and chief merchandising officer; Bruce Zurlnick, senior vice president and CFO; Edward Stein, senior vice president and director of stores; Jim Giantomenico, senior vice president and chief information officer; and Joyce Manning, senior vice president of human resources. A return phone call directed TNJ to Ms. Manning, but she was unavailable for comment up till press time.

Village Super Market Inc.

Village Super Market, which owns 23 ShopRite stores, is a member of the cooperative Wakefern Food Corp., the largest retailer-owned food cooperative in the United States, with 2003 revenues topping $6.6 billion. Based in Elizabeth, N.J., Wakefern’s 38 member companies own and operate more than 200 ShopRite supermarkets in New York, New Jersey, Connecticut, Pennsylvania and Delaware, and employ more than 40,000 people. “Wakefern provides its members merchandising, distribution, and other services, including diversity training, at its ShopRite University,” says Karen Meleta, manager, corporate communications and media relations.

“Wakefern trains its managers, from entry level associates to their senior executives, in awareness and skills training that addresses issues surrounding sexual harassment, managing cultural diversity, and addressing the needs of various cultural groups,” she says.

Wakefern’s highest-ranking African-American is Ernest C. Bell, vice president, human resources and corporate planning, followed by William Britton, manager of staffing and diversity, Meleta says. She adds that Wakefern also does business with minority vendors for all its divisions, including meat and produce, and offers specialty products such as Sylvia’s Soulfood products, and “foods traditionally known to appeal to an African-American palate.”