(2 of 2)
Into the Midwest. Nor are bigger operators immune from pressures, as Korvette's experience plainly shows. Though Founder Eugene Ferkauf revolutionized retailing with his approach to discounting (TIME cover, July 6, 1962), Korvette's haphazard management was not equal to its ambition of simultaneously upgrading merchandise, adding new services and expanding the New York-based chain into the midwest. To check his chain's decline, Ferkauf last year merged into apparel-making Spartans Industries (which has promised the Federal Trade Commission to sell its own 96 Spartan-Atlantic discount stores) and turned over the reins to Spartans Chairman Charles Bassine.
Korvette's is still making no money on its furniture operations, but Bassine insists that the long-ailing string of 61 Korvette supermarkets is finally in the black. Even so, he is considering selling off the food stores in hopes of streamlining operations. Last week Bassine announced that Spartans' overall sales during the year ending July 31 were almost $1.2 billion—virtually unchanged from 1966—with Korvette's accounting for $600 million of the total (excluding supermarkets). Spartans' earnings slipped slightly, to a slender $7,100,000. Instead of continued expansion, Bassine's most pressing task is to do something about wafer-thin profit margins at existing stores. It is significant that along with Korvette Herald Square, he has added only one other store in 1967.