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CASE 6.docx

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Department
Administrative Studies
Course
ADMS 1010
Professor
All Professors
Semester
Fall

Description
CASE 6: FROM THE GREAT DEPRESSION TO THE CHALENGE FROM SIMPSONS- SEARS THE GOOD YEARS - Timothy Eaton became a retail giant who transformed the nature of the retail business in Canada o Selling primarily low priced ware and attire  Policies: cash only; one price system (eliminate bargaining); and guarantee of goods satisfactory (or money back) - 1884, laughed soon to be famous catalogue th - 1890’s, had buying offices in London and Paris and in the 20 C, opened went national opening in rapidly growing cities like Winnipeg - 1907, John Craig Eaton opened factories in Montreal, Hamilton, and Winnipeg; buying offices in Europe, US and Japan; Mail order departments in Saskatoon, Regina and Moncton between 1916-1919 - Robert Young takes over (after Craig’s death in 1922) - Manufacturers appreciated the high volume business from Eaton o Sell goods to Eaton at a discounted price  When the Great Depression hit, sales drop at department stores  With reduced sales, fixed expenses = put pressure on profit margins  Tried to reduce turnover by reducing prices • Needed manufacturers to accommodate their low prices = forcing them out of business  Independent retailers couldn’t compete  Lower wages H. H. STEVENS AND THE PRICE SPREADS INQUIRY - Critiques large department stores because of their mass buying of huge departments and other chain store organizations, and the use of this power in the destruction of smaller retailers and crushing of the manufacturer who will not accept price dictation of the mass buyer o Eaton challenges the minister with a press release - When the inquiry turned to Eaton, they looked at their financial records (public for the first time) o Employees were making less then minimum wage o R.Y. Eaton saw this as ‘sinful’and must never happen again (CEO’s were critical on areas where profits exceeded 1-2%) CHANGING OF THE GUARD: JOHN DAVID EATON - Entering WW2, retail sales rebounded - End of the Depression brought 60% increase in sales - Growing middle class (returning vets) - Eaton bought Spencer’s o Changed everything overnight = changed to the Eaton ways - More people moving outside of the city o Shift in demographics ACHALLENGER EMERGES (1950-4) - 1950 Simpson president, E
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