Hills Stores Company, formerly Hills Department stores, was founded in 1957 by Herbert H. Goldberger with a single store in Youngstown, Ohio.
During his pioneering days in discounting, Goldberger became known as the first advocate of low, everyday pricing, without putting goods on sale. In 1964, Goldberger sold his chain to SCOA Industries, Columbus, Ohio. He remained as president of Hills until 1981, when his son, Stephen, succeeded him. He also served as senior vice president and director of SCOA until 1985, when he led a management buyout of Hills. Hills went public in mid-1987. In 1980, Hank was inducted into DSN’s Discounting Hall of Fame.
Hills Stores Company was headquartered at 15 Dan Road in Canton, MA. As of January 1998, the company operated 155 stores in 12 states, and had 8,553 employees. Hills was the nation’s eighth largest discount retailer. Hills had annual sales of approximately $2 billion and operated in 12 Mid-Western and Mid-Atlantic states, with a majority of its stores located in Ohio, Pennsylvania, West Virginia, Indiana and New York. The company’s goal was to be the store of first choice for the value conscious family by offering dominant merchandise assortments for Apparel and Home at Everyday Low Prices with responsive customer service/satisfaction guaranteed.
In November 1990, Stephen Goldberger resigned to “pursue other opportunities,” according to a Hills statement and was replaced as board chairman by Jack Brouillard.
Goldberger’s resignation from his one-time family business surprised some observers. He had been the chain’s president and CEO since 1981, and assumed the role of board chairman when his father died in 1987. While heading the chain, Goldberger is credited with Hills’ 1985 LBO from its former owner, the Shoe Company of America (SCOA), returning the firm to a publicly held company in 1987, and with the 1989 acquisition of 33 former Gold Circle stores.
Stephen Goldberger also had been a key player in several other changes: acceptance of credit cards, rollout of UPC scanning, scheduled opening of distribution centers beginning in ’91, and the introduction of a store refurbishment program with the debut of a new prototype in 1991.
Brouillard, a man described by a company spokesman as “a true leader,” had been the chain’s executive vice president and chief financial officer prior to his recent appointment. Thomas Lee, 46, Hills’ largest shareholder, assumed the CEO and board chairman positions.
Hills filed bankruptcy in February 1991, and reduced the store count from 214 to 151. The chain hired a new management team led by president and CEO Michael Bozic, closed 63 units, instituted a chainwide remodeling program, and built a new distribution center. Hills emerged from bankruptcy toward the end of 1993.
Hills’ financial woes date back to it’s 1985 leveraged buyout from the Shoe Corporation of America which saddled it with debt. The LBO was valued at $640 million. Debt mounted again in 1987 when Hills went public. The situation was further aggravated in 1989 when Hills acquired 33 former Gold Circle stores. A difficult economy followed by a recession in the early ’90s dealt the chain a crushing blow.
Hills president and CEO Michael Bozic resigned July 5, 1995 ending a tumultuous two-year siege for control of the regional discounter by Dickstein Partners, Hill’s largest stockholder. Bozic was replaced by Jack Smailes, formerly the company’s executive VP, GMM. During the long takeover fight, Dickstein openly questioned the ability of Hills to compete with larger competitors like Target and placed selling the company at the top of his “to do” list once he achieved control.
The new Hills board, led by Chairman Mark Dickstein sued the previous board of directors and its financial advisor for damages the chain incurred as a result of its management takeover. The lawsuit attempted to recover the $32 million in “golden parachutes” it paid outgoing executives, including former president and CEO Michael Bozic. The severance settlements were triggered by the change of management clause in the executives’ contracts.
Dickstein resigned his post Feb. 8, 1996 replaced as chairman by Chaim Edelstein, a former chairman of A&S Department Stores. Dickstein’s resignation as chairman was joined by that of Jack Smailes, president and CEO, who was replaced by Gregory Raven, who formerly served as chief financial officer of Revco Drug Stores. The 164-unit discounter then announced it would seek to acquire other regional discounters in the quest to become a larger, stronger operator.
It was a difficult two years for Greg Raven and Hills. Factors in the financial community were at odds with the chain’s lack of communication and their sales and earnings performance, and they were threatening tight credit terms if the situation didn’t improve by the year’s half point. Overall, sales and profits were down, and there was a lack of top executives from which to draw new ideas. The chain was without a chief merchant from January through July, when Raven picked Larry Angst, Hills’ women’s apparel chief, for the top spot.
Completely new systems were instituted. “We’re taking every system we have and throwing them away” Raven said. The new focus will be on merchandising systems, new financial systems, human resources, payroll, payables and eventually a new warehouse management system. A reset of the hardlines section was completed, which included lopping off 4 ft. from the end of the gondola runs to create a power aisle with pallet presentations of “good values.”
- “Hills is where to toys are!”
- “Hills is the Place for Kids.”
- “When you really need a low price, Hills has it every day.”
- “Hills is GREAT for Gifts.”
- “Christmas Wishes come true at Hills.”