Our panel of Industry Experts and authors of CSG Through The Ages, brings you this year’s series: Recession Busters

Businesses need vision, strategy, and the right leadership to find success even in a tough economy.

Using the vast CSG database of historical data and inside knowledge of each industry, our expert panelists have followed the trends for the last decade and selected the Top 10 companies in each segment that survived the recession.

Each month we reveal a top company that weathered the storm. We will examine what they did, how they did it, and where they are going in the future.

The Michael Kors collection was first introduced in 1981. Since then the namesake designs have rapidly grown into a global luxury lifestyle brand. Over the years, what started as an American luxury sportswear brand expanded into an accessory, footwear and apparel company with a presence in 74 countries. There are currently 188 Michael Kors and 100 Michael Kors Outlet stores in North America.

Michael Kors merchandise is also sold in high-end department stores such as Bloomingdale’s, Bergdorf Goodman, Lord & Taylor, Neiman Marcus, and Saks Fifth Avenue. Many celebrities have worn Michael Kors designs, including Michelle Obama who wore a Michael Kors black sleeveless dress in her first term official portrait as First Lady. In 2013, Mr. Michael Kors was selected for The Time 100, the magazine’s annual list of the 100 most influential people in the world.

Michael Kors has recently increased its focus and offerings to men. One floor of its soon-to-open Manhattan flagship store will only have clothes aimed at men and the company will also launch a new cologne for men next month. But make no mistake; the company is still all about handbags and accessories. Approximately 77 percent of the company’s sales come from this category. Shoes add 10 percent, and another 13 percent of revenue comes from apparel.

Some investors fear that the company is trying to do too much too fast. Michael Kors sells pricey goods that solidly fall in the luxury category, but also plays to the masses with a more affordable line. It has over 600 stand-alone stores globally, yet wholesale accounts for half of its business because of 1,700 dedicated sections in department stores.

In the meantime, the public company continues to prove its critics wrong. The Michael Kors brand has grown sales by more than 20% in each quarter since 2011. In terms of sales at Michael Kors stores opened more than a year, the company has beaten expectations for the past 10 quarters. The company’s last announced fiscal year-end sales were over $1.3 billion, a 40% increase over the previous year.

Thus far in this series on recession busters, we have featured two of the top three national dollar store chains, Family Dollar and Dollar General.  Current dollar store events have created a situation in which it is almost incumbent on us here at Chain Store Guide, to immediately report on the third member of this recession busting, national dollar store triumvirate, Dollar Tree.

Actually, the recent announcement proclaiming the agreement between parties for Dollar Tree’s $8.5 billion purchase of Family Dollar, pretty much puts an exclamation point on Dollar Tree’s confirmation as a retailer that has excelled throughout these recessionary times.  As Dollar Tree’s exercise in growth continues, we now see a quietly, powerful retailer in a David-like position, acquiring the larger (financially and in total locations) Family Dollar chain.

A few months ago this space featured this industry’s first recession buster profile, a portrait of the many successes of Family Dollar, in spite of the recession.  Here it was noted that Family Dollar was a prime example of how the top dollar chains grew to thrive during the recession, as a result of what turned out to be recession busting planning, about a decade before the recession became an economy killing reality through much of the modern world.

It was then that many national, regional and independently-based dollar retailers began to invest in fixtures and equipment to offer greatly expanded varieties of groceries, focusing on unprecedented offerings of perishables and eventually organics.  These dollar retailers also began to alter merchandising plans to increase presentations of national brands at the expense of private label goods.  Later, as the much of the nation was unknowingly approaching the recession, successful dollar stores were reengaging private label plans, as they found their growth had forced CPG companies to offer superior private label quality and values, or be shut out of the increasingly popular and essential dollar store front.

Though the only single price retailer of the big three national dollar chains, Dollar Tree had subscribed to these same merchandising plans and investments as its brethren and achieved similar successes which resulted in an unprecedented growth spurt.  As the recession hit, most dollar retailers found themselves with a vastly increasing customer base, as even long-term affluent consumers found themselves conserving ever more precious dollars.  Dollar Tree has typically populated its stores in somewhat more prosperous neighborhoods than other national dollar retailer chains and thus likely had a leg up on the recessionary competition.

As noted however in our recession buster piece on Family Dollar, while this retailer had thrived and grown cleverly and most energetically during the recession, Family Dollar was then beginning to experience a bit of trouble in paradise.  Quarterly financials were deemed disappointing by Wall Street, so much so that the company fired its prominent President, COO, once thought to be heir to the corporate throne, Michael Bloom.

Shortly after this first recession busters piece was published, Family Dollar announced a strategic closing of 379 ‘underperforming locations.  This announcement came after opening 474 locations a year ago and being on track to open 500 during the current fiscal year.  On announcing the round of closures, analysts wondered why, what was thought to be well run company would suddenly discover it required a massive round of closings, when any company should be focusing on improving poorly performing stores on a regular basis and weeding out the hopeless ones out on an as needed basis.

This news, combined with a couple of big-time investors, including Carl Icahn, pushing to capitalize on profiting from a possible sale of the company, have led to the actions of the proposed Dollar Tree acquisition.  The transaction itself is not due for completion until next year.

While many of the recent headlines on this story would indicate that this is already a done deal, a series of tough government regulators and powerful shareholders still have to approve.  Dollar Tree CEO Bob Sasser referred to this deal as a ‘transformational opportunity’. No doubt he already has plans as to how to merge his single price chain with the very different extreme value price points of Family Dollar.  Welcome to success, Dollar Tree.

General Nutrition Inc. has experienced tremendous growth over the past decade, accumulating double-digit annual gains in both sales and store count. Today however, the company is going through tremendous change in the executive suite: announced August 5^th, longtime employee Joe Fortunato has been replaced effective immediately by senior retail executive Michael Archbold as CEO. Most recently, Archbold was head of Talbots, and previously he was President and COO of Vitamin Shoppe, a key competitor of GNC.  Fortunato was a nearly 25-year employee with GNC, holding various executive positions including President and CEO for the last eight years. Clearly, his departure signals a major change in the identity of the company moving forward.

While Fortunato’s outing seems primarily related to recent financial figures (consecutive quarters of profit declines), as well as large decrease in the company’s stock price, as a whole GNC performed very well under his leadership. Since 2008, total company sales have increased by 51%, while globally there are now over 8,700 franchised and company-owned locations. Domestically, there are over 6,500 locations, including a unique franchise agreement with Rite Aid of 2,232 store-within-a-store concepts.  In 2011, GNC completed the year’s most successful initial public offering, besting more touted names such as LinkedIn and Groupon.  Throughout the past decade, the company has remained successful by diversifying its revenue among retail, franchising, and manufacturing/wholesale; GNC has a large presence on the web and concentrates primarily on dietary supplements, sports nutrition, and vitamins.  In addition, the American population’s increased focus on healthy living and fitness has helped propel the company throughout the recession. With a new CEO in office, GNC figures to continue focus on the strength of its retail network as well as its unique positon in the marketplace; however, changes will surely be on the way to help buoy financial results.

Anyone that has followed Albertsons history will know it has not had a straight and narrow path to the top. Since opening in 1939, it has had successful highs, severe lows, and is now working its way back to the top. After almost a decade of troubling times; primarily, Albertsons has returned to power throughout the recession through acquisitions and re-uniting its brands. While the past 75 years have been a whirlwind of ups and downs, in the end it can be considered one of the most successful grocery stores in the US.

Albertsons history begins in 1929 during The Great Depression. Joe Albertson decided to drop out of college in order to go into the grocery business because he believed that no matter what, people will always have to eat. Ten years later he opened his own grocery store in Boise, Idaho called Albertsons. It was considered “Idaho’s largest and finest food store”, and had the philosophy that it would always “give the customer the merchandise they want, at the price they can afford, complete with lots of tender, loving care.”  By the 1960s the company had over 60 stores and had decided to partner with Skaggs Companies, Inc. in order to bring expertise in both drug and food retailing. Between 1970 and 2000, under the leadership of Warren McCain, the company had its largest period of growth. Even after a recession at the beginning of the 1980s, the company boasted 13 consecutive years of increasing sales and by the end of the 1990s it had acquired the American Stores Company and operated over 2,400 stores. After the acquisition, the company began experiencing decreasing profits and decided to make an outsider with no grocery experience CEO. Lawrence Johnston’s hiring resulted in the loss of 1,300 administrative and corporate jobs, 12 divisional offices, 165 stores and the company being taken out of the New England, Memphis, Nashville, Houston, and San Antonio markets.

In 2006 the company took a turn for the worse and Albertsons LLC, was formed. The assets of Albertsons, Inc. were sold to SUPERVALU, CVS, and Cerberus Capital, and the company was taken off the NYSE.  Albertsons then became New Albertson’s, Inc. (owned by SUPERVALU) and Albertsons LLC (owned by Cerberus Capital). Between the years 2006 and 2012 hundreds of stores were closed, sold, renamed, and rebranded. Finally, on January 10, 2013, it was announced that all of the remaining SUPERVALU owned Albertsons were being sold to Albertsons, LLC, bringing all of the Albertsons stores back to one owner. Since then Albertsons has acquired United Supermarkets LLC and it is in the process of acquiring all of the Safeway stores.

Today the company has over 1,100 stores, $22 billion in sales and was named #1 on NRF’s Hot 100 Retailers list. Seeing that it began as a result of the Great Depression, survived the recession in the 1980s, and has now come out on top during the current recession, the company was an obvious choice for the recession buster and has proven that it can withstand almost any obstacle.

While many fast causal chains took a hit after the 2008 recession, one sandwich chain refused to raise the white flag and continued its march with a brown bag and a red Sharpie in hand. Founded by Jeff Sinelli in 2003, Which Wich started with only one location in Dallas, TX. Which Wich has approximately 300 units in 37 states and eight international locations in Mexico, Panama, Guatemala, Qatar, Bahrain, Kuwait, Lebanon, and United Arab Emirates.

For those who are familiar with the Sinelli name, Which Wich’s success is no surprise. In 1998, Jeff developed Genghis Grill, a Mongolian barbecue concept, which grew to 11 units in five states in five years. Jeff sold the concept in 2003 to focus on revamping the disappointing sandwich market by creating Which Wich. (Genghis Grill has gone on to open 90+ locations.)

With an innovative and interactive ordering system, Which Wich customers can order one of the 50 varieties of customizable submarine “wiches” by marking their selections with a red Sharpie on menu-labeled brown bags. Such wiches range from the company’s signature sandwich Wicked (loaded with five meats and three cheeses) to Thank You Turkey (a shout out to Thanksgiving with turkey, stuffing, and cranberry sauce) to Elvis Wich (peanut butter, bacon, honey, and banana) to vegetarian options not yet famously named.

In an interview in 2009, Jeff insisted that Which Wich’s success is due to being priced right. By offering a custom sandwich, a bag of chips, a drink, and even a fresh-baked cookie for under $10, Jeff believed that this value-priced formula will survive regardless of the economy, and he was right.

Which Wich has had an extraordinary growth spurt since its founding just 11 years ago primarily from franchising, and the company shows no sign of slowing down.  During the recession years, the company achieved almost 450% growth in restaurant locations. The majority of the company’s growth has come from within – all of the company’s franchisees are multi-unit owners.  As of May 2014, Which Wich projected 87 openings within the next fiscal year and continues to accept franchising opportunities worldwide.