DSF: Tell us about yourself, and how you got introduced to retail.
JR: I grew up on the east coast mostly in the state of Virginia, and ended up going to the University of Virginia. I actually left college twice to work for an entrepreneur, a startup guy in Old Town Alexandria, VA. I initially worked for this guy – he owned a tennis management and consulting company – as the manager of a tennis shop in Old Town Alexandria, and then when I went back to UVA. After leaving school a second time, I ended up becoming his right hand man as part of his growing startup that offered tennis management and retail to tennis facilities mostly on the east coast – health & fitness clubs, country clubs, and community tennis and swim clubs. We would basically supply the pro, stock the pro shop, and that kind of stuff. That was when I really got introduced to retail.
DSF: You ended up going back to UVA for both your undergraduate and graduate degrees. What were your majors while there?
JR: Both my undergraduate and graduate degrees were in speech communication.
DSF: Tell us about your stellar career prior to your time at Kohl’s.
JR: When I first got out of graduate school, I started in traditional, department store retailing in 1978. I started with Gimbels in Milwaukee, Wisconsin doing mostly store line management, although I also did some buying. In 1983, I got a call to join Macy’s in New York. I moved my family to the east coast to work in the city, lived on Long Island, and was the assistant store manager to the largest store in the world – Herald Square on 34th Street. Coming into that situation was amazing. I have a lot of very fond memories. It was the year that Cabbage Patch dolls hit the market, and I was in charge of the toys department. Soon thereafter, I became the store manager out in Long Island. Long story short, I was with Gimbels for five years, and then with Macy’s for eight years.
In 1985, I went to Dallas to open up the Macy’s at the Dallas Galleria as the store manager. So, by 1987, I was the group Vice President of all of the Texas and Florida Macy’s Stores. Then kind of a neat thing happened. In 1988, we ended up buying the Bullock’s Department Store group in Los Angeles. I got promoted to be the Senior Vice President and Director of Stores for Bullock’s. I moved the family from Dallas to Los Angeles and was there for three years.
I left Macy’s in 1991, and joined the Hudson’s Bay Company, where I became the Executive Vice President of the Bay Stores up in Toronto.
DSF: So, tell us how you made it back to Milwaukee to join Kohl’s.
JR: In 1993, I returned to the US, and tried to start up my own company. At that time, I had limited funds, and I learned about capital formation and business planning and that kind of stuff. That had limited success, and I kept getting pitched by a headhunter to join Kohl’s Department Stores and come back to Milwaukee because I had ties to Milwaukee.
I really wanted to get out of traditional department store retailing. I just didn’t really think there was much going on there. But in 1994 I was convinced by a head-hunter to head back to Milwaukee and become part of a niche retailer called Kohl's that was trying to wedge themselves between Target and a traditional department store like Macy's. The lure of getting stock options in a fast-growing company was also attractive to me. So I moved the family again back to Milwaukee, and started with Kohl’s as a Regional Director of Stores. I then eventually became the Executive Vice President of Kohl’s and was in charge of store administration, opening stores, and that type of thing. I opened up our new markets, including the Washington, DC market, Charlotte, NC, Kansas City, MO, and lastly, I opened up the 33 Caldor Stores in the Tri-State area of New York, Connecticut and New Jersey in 2000. That was the last big group of stores that I opened.
DSF: Tell us about your rise through the company.
JR: It wasn’t a meteoric rise, that’s for sure, in the six years I was with Kohl’s. I reported to who ended up being the CEO of the company, and we were growing so fast that over time I just assumed more responsibility. About halfway through, I did assume the additional responsibilities of picking up store administration. Store administration was overseeing new stores and overseeing all budgets, expense management, customer service, and a lot of the store line oversight. That got me a lot more involved in terms of the financials of the company and really understanding those.
While I was in retailing, I had a lot of bumps up, but I also had some setbacks as well. It wasn’t a piece of cake in my time with the Hudson’s Bay Company. The business was very tough, and I ended up deciding to leave and come back to the States. So, it wasn’t without trials and tribulations. Particularly in the 70s and 80s, it was a great time to be in retail because there was so much growth. It was more challenging in the 90s, but obviously, I was fortunate to hitch my wagon onto one of the hottest retailers in the United States in the 90s, and that was Kohl’s Department Stores. I was able to take advantage of stock options.
I make a point to say to people that you can never get rich just based on a salary. You really need to get an equity position either in a startup, or stock options within a company. Because if it’s all about salary, as your salary goes up, your nut gets bigger. It’s not like you can’t live a great life, but to really get true financial freedom, you really have to take some risks and be open to the idea of taking an equity position, either starting a business, investing in a business or getting in a position where your net worth can appreciate due to stock option appreciation.
DSF: Tell us about what you did after that and how you got started in entrepreneurialism and angel investing.
JR: I then left Kohl’s and corporate mainstream in the Spring of 2000, and was lucky because Kohl’s had three stock splits in 48 months in the late 90s. If you look at Kohl’s stock, it has really done nothing since 2000. However, from 1994-2000, for anybody that had stock options, it was a great ride! It gave me the financial freedom to break away and do some other things. That’s what I did.
I was in Milwaukee, had broken away from corporate mainstream, and became what’s called an angel investor in startups. As I began to get the word out that I was interested in investing in startups, it became apparent to me that Milwaukee did not have an organized angel network where high net worth individuals would get together on a regular basis to vet deals, make decisions and that kind of stuff.
In the summer of 2000, I got a bunch of guys together in my living room, and over several meetings we formed the first angel network in the area called Silicon Pastures. We basically set it up so we would look at two deals every month and it was an opportunity to network but also to make investments. You try to play the percentages when you get into this space – you want to develop a portfolio of companies as opposed to putting all your eggs into one basket obviously since it’s so high risk. In fact, 85% of all new businesses go bust eventually, and we were just trying to play the percentages. I was very involved in the early stage venture capital community in the Midwest from 2000-2003, running Silicon Pastures, and looking at hundreds of deals every few months. It was very active and a lot of fun, but also grueling because I was trying to negotiate the best terms and manage them.
DSF: Talk a little about a few of the companies that you personally invested in actively on your own.
JR: At the same time I was doing Silicon Pastures, occasionally I’d see a company that I
really liked and wanted to make an active investment and get involved in the management of the company, instead of a passive investment. Probably my biggest success there was in the Fall of 2000, when I invested in these two young guys who had some experience in selling Halloween costumes in malls during the seasons, and they wanted to try to sell costumes on the internet. Since I had retail experience, and I thought this was really interesting, I wanted to become the lead investor and chairman of the board. We started it in 2000. The name of the company is BUYSEASONS, Inc. and the main web site that we developed was buycostumes.com. Starting in the Fall of 2000 until the Fall of 2006 when we ended up selling, it went from about 0 to $50 million in revenue. We sold the business to Liberty Media out of Denver in late 2006 for $60 million, and it was obviously a homerun for everybody. It was one of those stories of a startup doing well.
However, I have had my share of total clunkers as well. I’ve had more than my share of startups that have gone bust, or that have been treading water. I have one now that I am involved in that has been going on and on and on. It’s not always a success in this space, but when they’re good, they’re great.
Around 2003, I handed the baton to some other people to lead Silicon Pastures, and starting in 2005, I have really kind of pulled back a bit. I am more in a semi-retirement mode, although I am currently the chairman of a new startup called ModernMed. We are in the concierge physician space, trying to deal with the problems of offering high levels of customer service with their family physician. The web site is www.modernmed.com. We are beginning to convert existing doctors who don’t want to deal with the crazy way it’s all been set up now, where you have to wait for days to get an appointment, the appointments are 9 minutes long, etc. This company is more of a same-day appointments and better service model.
DSF: What makes for a successful startup in your opinion?
JR: It’s a great question. In real estate, it’s always location, location, location. In startups, I’d say it’s more management, management, management. I’d much prefer investing in a B idea or technology with A management than the other way around. You just have to have to develop a good management team that gets it and which understands work ethic, which is a challenge these days. I sound like an old fart, but that is a real challenge.
DSF: What helped you make the decision to join the chapter of Delta Sigma Phi on campus?
JR: When I went to UVA, I never thought about joining a fraternity. It just wasn’t in my wheelhouse. When I started during rush, the house was about as eclectic a group of people than you could imagine. I was a politically moderate long-hair that wore Izod shirts and khaki pants, and we had such an eclectic group of people at the house. We had a great mix of guys. I was the rush chairman and was social chairman for two years, so I was involved in the house, which was great and a lot of fun. I have very fond memories of the house, and was attracted because it was not a cookie cutter group of guys.
DSF: What made you decide to write your book – The Rise and Stall of Kohl’s?
JR: When I left Kohl’s in the Spring of 2000, I looked around and no one has ever written a book about Kohl’s. Back in 2000, there was a book about Wal-Mart, Nordstrom and other successful retailers. I thought that since no one had ever done it, I was going to do it. I had kept a lot of articles over the years about the success of Kohl’s, kinda my version of scrapbooking, and I thought that I could really put something together that wasn’t a kiss and tell or anything. So, I started writing this thing.
The original title was “Staying off the Radar Screen – the Rise of Kohl’s Department Stores” because at the time we were really trying to keep low off the radar screen. I wrote the book, and we were really close to publishing it through a company called John Wiley & Sons, but they said “we’re interested, but there’s two things. One is we really want the author to have a platform like a tv or radio show where they can help push the book.” I said that’s not me. I don’t have that. I’m just a guy writing a book from an interesting perspective. The second thing they said was that “this is very important to us - we just published a book on Walgreens and Walgreens agreed, and if we did this, Kohl’s would have to agree to sell the book at point of sale at all of their registers.” I said that there was no possible way. That was not the culture of the company. The book is not a kiss and tell, but there is some controversy in there. So, long story short, the thing kinda fizzled. I did it kinda for the hoot, but also because it would be fun to make some money. After getting into it though, I realized that it’s nearly impossible to make money writing a book unless you are a John Grisham or Stephen King. I put it on the backburner, and then after a few years, I started to finish it up and post it online at my blog –www.jeffrusinow.com. I have received a great deal of positive responses from current and former executives at Kohl’s, and it has been a great experience.
DSF: What is the most important thing that has made you successful?
JR: Two things. The first is work ethic. I picked up a very strong work ethic from my parents and uncle. That helped me through the good times and the tough times. I was very driven towards achievement and success. The other part was a willingness to take risk. The willingness to extend beyond the idea of a job just being something with a salary is big.
DSF: What are some other things you like to do in your spare time?
JR: My favorite pastime is birding. I have been into bird watching since I was a kid, and I keep a life list, and just enjoy going out there and birding particularly during migration. I enjoy going to a place to get a new bird on my list. I keep track of what’s called an ABA list – birds that are mostly seen in the continental US, Canada and Alaska. I don’t go all around the world, but my main focus is just birding in the US.
I’m also trying to reconnect with my kids. I was the quintessential workaholic you know, going back to my work ethic, and I am at a point where I am trying to work on all of that. I do like to golf as well.
My startups also keep me busy, in addition to serving on the Board of the Wisconsin Humane Society, and a couple other non-profits like that.
DSF: What are some pieces of advice for other Delta Sigs to be successful?
JR: Be open to new frontiers and be open and willing to take risk. The thing about work ethic is that being super-driven has consequences, so you have to weigh work ethic and the potential consequences of that.
Read Jeff’s thoughts on numerous topics on his blog at www.jeffrusinow.com. You will also be able to download a copy of his online book The Rise and Stall of Kohl’s if you’re interested.
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