On the surface, at least, business and government appear to be moving into a new cooperative era. For example, we are seeking ways of shoring up depressed heavy industries for battle in the international marketplace.
Trade protection for American businesses and direct government assistance are among the tools being employed in this new effort, with central economic planning being done in Washington. Free enterprisers in corporate board rooms wouldn't want to admit us much, but a form of socialism appears to be evolving with their support.
One exception, to date, is the nation's retail industry. If you thrive in a cut-throat, survival-of-the-fittest business environment, you might consider opening your own store or going to work for a retail chain. There are no government bail-outs and you are on your own.
The latest example is Korvettes Inc., which began a retail revolution three decades ago with its discount retailing. Today, Korvettes is fading from the picture.
Washington's retail landscape in recent years has been littered with failed businesses -- the Kann's and Lansburgh department stores, Giant Food's department stores and retail catalogue operations, and Drug Fair's jeans stores are among the prominent examples.
When W.T. Grant was forced into bankruptcy in the largest retail business flop in history, no effort was made to keep the firm alive despite store locations in most congressional districts and a list of employes almost as long as that of Chrysler Corp.
The fact that government decides to aid some businesses and not others is a measure, in part, of pressure-group politics. But the example of Korvettes also is a chapter of a larger story about how trends in the retail business are changing much more rapidly than at any time in history.
Customers are dumping retail stores from their shopping trips as frequenty as they discard out-of-fashion blouses or shirts. The truly successful retailers must possess an uncanny ability to spot new ideas and trends that will succeed. Otherwise, failure is evident virtually overnight.
"The sweeping social changes of the past decade have dramatically changed not only the family household unit, but the work force as well. More than ever, retailers will have to monitor closely the effect of these changing lifestyles and attitudes on consumer needs and wants," retail analysts from the Chicago-based Harris Trust and Savings Bank observed in their 27th annual retail study published recently.
Apparently, Korvettes management failed in their monitoring efforts. Retailers specializing in discount pricing of limited product lines took away some Korvettes customers on one flank while national chains moved into mass discounting and stole other Korvettes customers with lower prices. The once-distinctive Korvettes identity in the marketplace began to blur, and shoppers went elsewhere. The New-York-based chain, which operated 50 stores when the year began, did not make a profit in the past two years and listed an operating loss of $18 million last year.
Today the chain has 29 stores, but 14 of those will be closed by Christmas, including four major outlets in the Washington area. The final act of the local Korvettes show may start next weekend with liquidation sales of remaining merchandise.
All Korvette stores were closed earlier this month for inventory in the wake of a transatlantic financial confrontation. The Agache-Willot Group of France purchased Korvettes in 1979 for $31 million from Arlen Realty & Development Corp., but later conceded that it had been a bad investment.
Now Sam Nassi Associates, a retail liquidator who also sold off the W.T. Grant merchandise following that bankruptcy, has been hired to conduct final sales. Spokesmen for Nassi said the Washington stores will be closed for good once remaining merchandise is sold.
David Bernstein, a Nassi vice president, said Korvettes employes are being asked to report for assignments today, and that Nassi hopes to open the stores by the end of this week or the start of the following week. Negotiations already have started on leasing the four Korvettes locations here.
Reportedly, K mart Corp. is interested in the Korvettes site on Rockville Pike. You may remember K mart's old name, S.S. Kresge, operators of the five-and-dime store chain. Kresge changed its business drastically in the past decade and was rewarded with a tremendous growth in sales volume, partly at the expense of firms such as Korvettes, which stayed the same.