RETAILING: Sale of the Century

As it rumbles toward court-ordered liquidation next month, W.T. Grant Co. has taken on a bustle that belies its status as the second biggest bankruptcy (after the wreck of the Penn Central Transportation Co.) in U.S. history. The once giant retailer, now reduced to 155 stores, mainly in the Northeast (down from almost 1,100 nationwide five months ago), is conducting the sale of the century—and the going-out-of-business sale of all time. Goods are moving briskly at discounts of up to 60%, as bargain-hunting customers snap up everything from towels to television sets.

The Grant store in Jamaica, Queens, a borough of New York City, is typical. In one day last week, hundreds of customers picked over stacks of bedspreads, curtains and fabrics, overturning racks and pulling merchandise from display windows. Litter left behind keeps a night cleanup crew busy. “We can’t control it,” says Manager Bill Gebbart. “It’s a disaster.” But not for sales. Normally, the store rang up $5,000 in business during a typical day; now, says Gebbart, it is doing ten times that.

Since Grant filed for reorganization under federal bankruptcy law last year (TIME, Oct. 13), the Los Angeles firm of Sam Nassi Co.. which specializes in liquidating bankrupt retailers, has been overseeing the sales. Nassi, 54, himself a former discount retailer (whose first liquidation was of his own store), says that the object of the dismantling is to “get the most money out as fast as you can.” Apparently, he has been doing just that for Grant. Before they closed their doors, the remaining Grant stores in the West, South and Midwest moved some $235 million worth of goods.

Impulse Buying. Nassi’s techniques begin with shrill broadcast and print advertising that promises huge discounts “on every single item, in every department, no exceptions!” Next comes “instore development”: garish sale signs are displayed in windows; merchandise counters are removed to make way for extra cash registers. The emphasis is on cash-and-carry and self-service. Fabrics are precut to more marketable sizes, clothing is clustered by size instead of type to encourage impulse buying (sportswear and fancy dresses are mixed together). Finally, liquidators mark additional discounts on such seasonal items as greeting cards, chocolate Easter eggs and summer furniture.

Public-address systems are used to announce 15-minute “mini-sales” every couple of hours. The stress is on urgency. Says Gary Mintz, who is running the liquidation for Grant in New York: “A customer doesn’t come in with a shopping list. He comes in for the value. An out-of-business sale represents the bargain of a lifetime.”

The sales end next week: before they do, discounts could run to 80%. Then what is left will be auctioned off to other retailers and trade merchandisers. Grant has already vacated its 53-story Manhattan headquarters building. By mid-April, the 70-year-old Grant, once a thundering rival to F.W. Woolworth and S.S. Kresge, could well be no more.

Grant’s Chairman Robert Anderson, appointed in 1974 to arrest the chain’s decline, had hoped to use the protection of bankruptcy laws to build a “new Grant’s” consisting only of the Northeastern stores. They were to sell clothing, household goods and furniture, and steer clear of the high-priced air conditioners, refrigerators and television sets that proved to be the company’s Achilles’ heel. So confident did Anderson appear at one point that he told one of his managers: “There will be a 1976.” But the store’s creditors thought differently, and began pressing for liquidation. Grant owed $640 million to banks alone. No matter what Anderson did, the banks reasoned, Grant would wind up still deeply in the red, forcing creditors to settle for even less on the dollar than they will get from the liquidation.