Crowley, Milner & Company

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Crowley, Milner & Company

2301 West Lafayette Boulevard
Detroit, Michigan 48216-1891
U.S.A.
(313) 962-2400
Fax: (313) 962-2529

Public Company
Incorporated: 1909
Employees: 1,300
Sales: $105.9 million (1996)
Stock Exchanges: American
SICs: 5311 Department Stores

Crowley, Milner & Company is the owner and operator of ten different specialty department stores throughout the eastern half of Michigan. The company retails moderately-priced apparel items for men, women, and children, as well as home furnishings and linens, electronics, and cosmetics. Crowley’s stores carry the company’s own line of products, while also supplementing that merchandise with other brand names such as Alfred Dunner, Bugle Boy, Coach, Haggar, Lee, Levi Strauss, Liz Claiborne, and London Fog. The majority of Crowley’s stores are located in or near Detroit, with the remainder located in suburban Flint. The company also owns and operates numerous Steinbach Stores in the eastern United States, which were acquired in 1995.

The Early Years

Crowley, Milner and Company was created in 1909 when Joseph J. Crowley, his brothers William and Daniel, and William L. Milner joined together to save a struggling department store in Detroit called Partridge and Blackwell. Joseph Crowley had spent the previous few years working as a credit manager for Detroit wholesaler Burnham Stoepel, a job which often required that he help reorganize struggling ventures. His brothers had joined him in 1902 to form the Crowley Brothers Wholesale Dry Goods Company. Meanwhile, Milner was operating the W.L. Milner Department Store in Toledo, Ohio, a company that was a regular customer of the Crowley Brothers’ enterprise.

After leaving Burnham Stoepel to fully focus his energy on Crowley Brothers, Joseph Crowley was approached by an executive of the Central Savings Bank of Detroit about the Partridge and Blackwell opportunity. The company was a specialty retailer teetering on the edge of bankruptcy due to organizational problems that were exacerbated by the recession in 1907. Crowley agreed to take over the struggling company on the condition that his two brothers and Milner join him in the endeavor. They all agreed, and in 1909 Crowley, Milner and Company was incorporated as the successor to Partridge and Blackwell.

Crowley, Milner & Co. immediately set about the task of positioning itself as one of Detroit’s highest quality retail operations. In the early 1900s, Detroit was regarded as one of the country’s most beautiful and affluent cities, and Crowley, Milner & Co. catered to this image. The store was stocked with luxurious clothing and gifts, much of which was imported from Europe, as well as a fancy full-service restaurant and one of Detroit’s best grocery stores. The newly-refurbished store soon enjoyed a great deal of success, which in turn helped the real estate business in the area surrounding the store. In less than ten years, the Crowley, Milner & Co. store had been expanded in size and was the largest department store in Michigan.

Unfortunately, the company’s success was marred when Milner was killed in an automobile accident while traveling to his original Toledo store in 1923. Not only did the company lose its president and merchandising expert, but his 42 percent interest in the store was sold by his family. Without Milner, the store eventually came to be known as Crowley’s, but the company has retained its full name to the present day. Joseph Crowley succeeded his friend and partner as the company’s president, but the loss of full control of its holdings hit the company hard for many years thereafter.

Further damage was done to the company by the stock market crash in 1929, which caused a recession that was devastating to the retail industry. Sales the previous year had reached $39 million, which was the company’s highest recorded annual income since its inception almost 20 years before. In 1929, however, sales plummeted to approximately $10 million. Customers simply were not buying things unless absolutely necessary, as the depression had depleted the resources of families and businesses alike. Gone were the frivolous spending frenzies of the 1910s, and Crowley, Milner & Co. struggled to stay afloat.

Post-Depression Rebuilding Efforts

It was not until 1937 that the Crowleys regained a majority control of their enterprise. Following Joseph Crowley’s death, his widow repurchased the lost shares and once again gave the family a more than 50 percent interest in the company. That year, Crowley, Milner & Co. was just beginning to rebound from the worst effects of the depression, and regaining a majority control of the company’s holdings was especially helpful to its recovery.

When Joseph Crowley passed away, the presidential position was filled by his son, Daniel J. Crowley, who acted in that capacity for the next 20 years. His business strength was in the field of accounting, which was helpful as the company attempted to rebuild its financial stability. Also, he was an effective manager who possessed the ability to choose a quality staff, to whom he delegated a good deal of the company’s operations.

One of Crowley’s new staff members who took on an integral role in the redevelopment of the company’s business was J.D. Runkle. After spending a short time as a college instructor in the field of business administration, Runkle came to Crowley, Milner & Co. as its general manager. He held weekly meetings for the company’s management team, utilizing chalk and a blackboard to preach the importance of store policies, procedures, and goals. The company’s employees came to refer to him affectionately as “The Professor,” and his efforts combined with the direction provided by Daniel Crowley to lift the company back to its standing before the depression had hit.

Runkle was a no-nonsense manager who demanded only the best from his staff. In fact, the company’s present-day mission statement, which emphasizes the refusal to “accept anything less than first-rate performance,” was derived directly from his influence. Much of the company’s success throughout the years of World War II, which involved the rationing of materials and control of pricing, can be attributed to the firm management provided by Runkle and Crowley. Following the war, the company continued to prosper under their direction until the mid-1950s. When Crowley left the company, Runkle succeeded him as president.

Retail Expansion: The 1950s Through 1980s

The 1950s marked a period of rapid expansion in Detroit, both in the population and in the infrastructure. Expressways were constructed to connect the city with the surrounding towns, and suburban Detroit was born. As access between the suburbs and the city improved, downtown retailers began to open satellite branches in nearby communities. Runkle saw the growth potential that new branch stores would offer Crowley, Milner & Co., and began planning for expansion. He retired in 1954, though, and the introduction of branch stores was actually completed by his successor, James H. Chamberlain.

In late 1959, the first new store was opened in West Dear-born, Michigan. The store was a 100,000 square foot unit comprising three stories and was located in a shopping center called Westborn. The store was almost immediately successful, and soon thereafter another unit was opened at the site of another major center of activity in Detroit. This store was one-third the size of the second, but nonetheless, its retail success soon paralleled that of the other two.

Entering the 1960s, Crowley, Milner & Co. decided to try its hand at operating stores located in two of the many new indoor shopping malls that were popping up throughout suburban Detroit. New locations at Livonia Mall and Macomb Mall opened on the same day in late 1964, both of which were the largest enclosed shopping facilities in the country at the time. The Crowley’s stores were the largest stores featured in each of the malls, and both became prosperous and helped the company gain greater recognition and exposure throughout eastern Michigan.

Chamberlain died of a heart attack soon after the mall locations were opened, and his presidency was followed by that of Robert E. Winkel. When Winkel inherited the company, it was composed of five stores throughout metro Detroit, which were soon joined by three more when Crowley, Milner & Co. purchased units from Demery’s Inc. in 1972. Shortly thereafter, another Crowley’s unit was constructed in a shopping mall in Sterling Heights, Michigan, and was opened in late 1975.

All of the company’s branch locations continued to experience great success, but the original store downtown began to suffer as Detroit did the same. Over the years, that store’s sales figures had been declining, and actually reached the lowest point in the company’s history in 1976. The following year, the store was closed and the building was demolished. One chapter in the company’s history was closed, while many others were just being opened.

By 1980, two more Crowley’s stores were opened in regional shopping malls in the Detroit metro area. Although both stores achieved substantial success, the location at Arborland Mall was closed three years later because its developers had decided to turn it into an off-price shopping center. Crowley’s had traditionally been an upscale marketer of high-quality items, and the company decided that the mall’s change in focus did not match the image that Crowley’s wanted to maintain.

Company Perspectives:

“We cannot accept anything less than first-rate performance in merchandising, operations, in the training of our people and in the creativity of our advertising.”

In 1984, after having led the company to heightened success for 20 years, Winkel retired from his post and was followed by Robert B. Carlson. Carlson immediately initiated the addition of a tenth store in Southfield in 1985, and then two more in Burton and in Westland a year later. Also in 1986, a unit was opened near Flint, Michigan. This move drew some concern and criticism from analysts, who believed that Crowley’s may have been extending itself beyond its true sphere of influence in the Detroit area. While the Flint unit was marginally less successful than its Detroit siblings, it achieved decent sales and within five years was doing quite well.

In the end of the 1980s, Crowley, Milner & Co. underwent two significant changes. First, its second branch store–and one of its most successful–was closed in 1987. The unit’s lease had run out, and the property owner wanted to segment the building and bring in new businesses. Crowley’s was invited back, but was offered only a portion of the space it had once inhabited. Management felt that downsizing that store location would not benefit the company, and rejected the new lease offer. The following year, Carlson was promoted to the newly-created post of chairman of the board, and the company appointed Andrew J. Soffel to serve as president. Previously, Soffel had been acting as vice-president and chief operating officer.

The 1990s and Beyond

At the turn of the decade, Crowley, Milner & Co.’s sales declined slightly. The company began making moves to recapture its customer base and raise its yearly revenue to the level that had been achieved in the past. First came the introduction of a prototype men’s clothing store in Farmington, Michigan. Sales there were strong, and the company discussed plans to introduce more similar stores in the future. Also, Crowley’s instituted a “Frequent Buyer” program at all of its stores, as a method of getting customers to come back again and again. The program kept track of each customer’s monthly purchase amounts, and then the stores issued gift certificates based on each person’s sales figures.

Initially, the Frequent Buyers program was a huge hit with customers. By mid-1992, there were approximately 55,000 participants and new members were being added at a rate of about 3,000 each month. Unfortunately, however, the company’s yearly sales figures continued to drop, with the 1992 figures almost $10 million less than those of 1991. Crowley, Milner & Co. began aggressively searching for a merger partner that was large enough to help the company expand. It was management’s opinion that long-term growth for the Crowley’s chain would come through acquisition of some type, with the most likely scenario being an acquisition by another party.

Near the end of 1992, the company tried to expand its reach to Lansing, Michigan’s capital city, opening a specialty store for women there that was similar to the men’s store in Farmington. The store was unsuccessful, however, either due to its location or to its design. Some felt that the Farmington store, which carried only men’s items, had been successful because men appreciated a store in which they could quickly and easily locate the merchandise they sought. Women, on the other hand, typically liked a department store which had merchandise for everyone under one roof. Some speculated that the women’s-only Crowley’s in Lansing may have suffered for that reason, while others once again cited the difficulty in expanding to a locale which was unfamiliar with the Crowley’s name.

In January 1993, Soffel retired from the company and was followed by Dennis Callahan, who came to Crowley, Milner & Co. with over two decades of experience in retail. One of his first tasks was to sign a revolving loan agreement with Schottenstein Stores Corp., which provided Crowley, Milner & Co. with money to resume payments to its creditors. The company then implemented a new workforce management computer software system, as a means of saving money on the tasks of tracking employees’ work time and attendance. The program was called Smart Scheduler. Another change that came in 1993 was the close of the Westland store, which had been struggling. The Frequent Buyers program was cut at the end of the year.

In 1994, sales began to increase once again, and the company announced its first profitable quarter in almost five years. Callahan continued to rebuild the company’s financial stability, through such moves as the acceptance of a new working capital loan agreement with Congress Financial Corporation, which replaced the previous agreement with Schottenstein Stores Corp. Also initiated was a two-for-one split of the company’s common stock that spring.

Sales in 1995 rose to $109.9 million, and the company made moves to purchase department stores previously owned and operated by Steinbach Stores, Inc. of Columbus, Ohio. Steinbach’s stores were spread throughout the northeastern United States, in New York, Connecticut, Vermont, New Jersey, and New Hampshire. Entering the end of the decade, it was clear that Crowley, Milner & Co. was committed to rebuilding what had once been a great dynasty in the Detroit area. The company was actively seeking out new endeavors throughout eastern Michigan–and with the Steinbach acquisition, throughout the eastern United States–that would help increase profits and aid in expansion. These continued efforts would undoubtedly position the company for future growth and success, as long as the retail environment remained strong.