William (Bill) T. Dillard II is the current CEO and Chairman of Dillard's. Bill has served as the CEO since 1998 and Chairman since 2002. In addition to this, Bill is a Walton alumnus and a current member of the Arkansas Business Hall of Fame.
Episode Transcript
0:01 Matt Waller: I have with me today William Dillard the second, Bill Dillard, CEO of Dillard's. And
he is talking to me just about management and retail a little bit today. I'm proud
of the fact that he is an alumnus of the Walton College of Business. And he's also
a member of the Arkansas Business Hall of Fame. So how many stores do you visit per
week?
0:28 Bill Dillard: It varies. Some weeks two or three, and some weeks 10 or 12. Uh, the last month over to North Carolina to Wilmington. To see the damage we had over there. See what happened. We were close to Wilmington for two and a half weeks, didn't end up with any damage to our store. But the community had a lot of damage. Normally we had the route that we go to the store, it's pretty direct. And I had them detour and go through downtown see, and they cleaned downtown up almost totally, it was really had to look to see whether there had been any flood damage. Once you got out in the neighborhoods. It was unbelievable, the amount of trees they lost. And come Friday, I was in Panama City. And I've been going to storms since 1971. We had 9-10 stores and a store in Corpus Christi, had opened in March 1970. And hurricane hit Corpus in August of 1970 and blew it away. My father was in Asia. And he was kind of nominally in charge. And I got down there and I listened to what the people that ran that group of stores wanted to do and did basically didn't agree with them. They, they their view was to shut the store down for an extended period of time. You know, get it back in perfect shape and that ain't gonna work, the stores doing like 10 to 15% of Dillard's total volume. We've just gone public in 1960. And this is not going to work, we're going to have to be more proactive to get that store open. And we were closed two weeks and three days. The storm happened on Monday, the first Monday in August, and we reopened the third Thursday in August. And we did more business that last 10 days than we planned for the month. It was unbelievable. We had about maybe a third of the inventory in the store they should expect because demands was crazy. But you see how the world's never exactly the same. I was pressing the people to get reopened at Panama City. And I went down there said, "We, two weeks ago Friday," and that hadn't happened there yet. Although we did let this week start to have small sales increases. We gonna personally stay open and we literally had been feeding a substantial number of people. I have friend that's a member out of lotion. And he stopped me week ago Saturday, week ago Sunday we were having a skillet tournament. That's where we play with caddies, and he said "Bill you can't create reputation at Panama City. Said I had 110,000 foot warehouse down here that was destroyed. And he said some of my people have been eating over at your store. He said y'all are fixing lunch for anybody who will show up basically." And you know, essentially how people organize something like that. We had the security man in Little Rock, L.A. and L.A. gone down there and you know secure the store because they were having looting. The first week down there was unbelievable. They actually killed the fire police the fire chief down there. Tried to steal his fire truck.
3:43 Matt Waller: You're kidding. Where was that?
3:45 Bill Dillard: Panama City. But things were terrible down there, but, anyway, been going to storm damage since 1970. And Panama City is the worst. You know, it's, there have been two Category Five storms hit the United States. This like one mile hour and Category Five. If you compare it to Wilmington, which had a lot of damage, we had damage all the way in Asheville. Flooding in Raleigh, Durham, part of North Carolina. Anyway this stuff in Panama City is more like a tornado if you, if you've ever been to tornadoes or hurricanes.
4:29 Matt Waller: Oh yeah, I went to one once.
4:30 Bill Dillard: It's a totally different scale. Tornadoes damage is much more intense, but a much smaller area. And hurricanes, broad areas, this thing, we have two stores down that part of the world. One's in a place called Pier Park that's on the western edge of Panama City. It's the beach community start, and the other ones in Panama City. And basically Panama City was basically the whole communities just, the mall, Penny's and Sears both roofs caved in. And the mall is closed. We're the only retail open in the mall, right now.
5:07 Matt Waller: Oh my goodness.
5:09 Bill Dillard: And anyway. So you know, my my travel, I've been, I don't remember the last year I've missed a store. It's been several years.
5:19 Matt Waller: Well, that's something that really impressed me. You visit so many stores throughout the year.
5:24 Bill Dillard: I have to well, it's just something I do. I mean, it's been easier because our store counts gone down.
5:30 Matt Waller: That is amazing. I know, last year
5:33 Bill Dillard: Well, like this week I did six. Well seven because I went up to Fayetteville last night. But I went to Tucson and Flagstaff, Arizona, Prescott, Arizona, Lake Havasau. Any given two month period, I'll be pretty much in a dozen states.
5:53 Matt Waller: Well I know, we, you took me and some other faculty on a tour of the store in Fayetteville. And we were impressed one at how quickly you walk through the place. But also just the details you knew about everything. You knew all kinds of financial numbers and you knew all kinds of things about the store and you saw things that needed to be changed. How do you keep all that in your head? And,
6:25 Bill Dillard: I don't know. You know, Matt, one of the things that I say is happening to the world, my world, used to be a big plus, I have a good memory. Nowadays it's good plus to be able to use your phone. I mean, the young people if I didn't have young people I wouldn't know anything nowadays because I get in the car, I said "How big is that school?" I was in Tuscon the day before yesterday. "How big's the University of Arizona?" You know one of the young people punched it up and got it in 30 seconds. I turn my phone one and I can make, and I can get one of my, you know, pre-recorded numbers, I've done pretty good. You know, just over the years if you go places and you know ask people questions, you never can tell what you're gonna turn up. I had an intereseting thing that happened to my brother, but he's got reasonably much the same operating mode that I do. He was in a town where Sears is closed and they told him, the Levi business was up and our basic view has been that Sears closing, other than hurts the mall long range, is it's no impact on us. We sell so little merchandise that overlaps with Sears. You know, we we actually did a study the spring, Sears has closed about 100 stores at various times in the last couple of years in malls we're in. And we were trying to see if we could identify any trends. We couldn't find it in the numbers. Stores where they closed, were no different than stores where they hadn't closed.
8:00 Matt Waller: Is that right?
8:01 Bill Dillard: It made no difference. But you know, it did it at the micro level. The Levi business is better when Sears is closed.
8:07 Matt Waller: Interesting.
8:08 Bill Dillard: He just, some person, you know, could have been, I don't know who told him, like that manager, assistant manager, or ASM, or somebody told him that. Check it out, he's right, it went up. Not dramatically but you know 15-20%, just enough that we up the inventory level. Best stores, this 100 odd stores added the inventory level of Levi.
8:33 Matt Waller: Well, you, I mean it is amazing what you can learn when you walk around and talk to people but you have mentioned several times when you've spoken to classes and talked with people. You're you implement management by walking around. When did you start first doing that?
8:51 Bill Dillard: You know my father always went to stores that we used to have. When I was a young man we went to every store between Thanksgiving and Christmas. That morphed into going once a year over the last 10-15 years. I don't remember exactly, a long time. Up when I was, I would've been 11 years old, we moved to Texarkana and bought a store in Tyler and I used to go with my father. I guess I was probably 12-13, I was born in 1945 and we both did store 56 so we would have started going down there right after that. If it was on a Saturday was going down there or you know just a summer, something I went. No tellin' how many times I went to Tyler with my father. As we open more stores, I just always, you know, we went to 'em. I think it's much because my father wanted to have an airplane. If you have an airplane, you need to justify it. He started out with an airplane in 1963 I think it was.
10:01 Matt Waller: What kind of airplane was it?
10:01 Bill Dillard: Debonair. So a small Beechcraft, it was a retractable gear Beechcraft, just just below a Bonanza. Went from there, he actually ordered a Baron in those days. And he's still today, you know, you order planes, reasonably far in advance, airplane manufacturers, so when businesses get a pretty good model and get their orders and get part of the payments for the plane. They build it for you. Anyway, he had ordered a Baron, and got the Debonair to fly for, till the Baron came.
10:37 Matt Waller: So, I know you majored in accounting. And you've told me before that you felt like learning accounting really helped you in business. And what aspects of accounting were most helpful to you?
10:55 Bill Dillard: You know, I don't see how people are in business that don't have accounting background. I just don't see how you could be in business. Most things about business revolve, understand the numbers. It's, that question, just, to me it's so obvious on its face. It's, you know, if I was talking to Dr. Peters about it, it's just self serving, but I just don't see how you would expect to make intelligent business decisions if you don't have a good feel for numbers. Accounting's not, you know, as people think I have a 11th grader in high school I've been talkin' to, she thinks she wants to major in business, but I've been talking to her about majoring in accounting. She said, "Well, I don't think I could do the work. And you know, I'm not good with numbers." I said, "It's not about numbers, Georgie. Just that view, if you want to be a business, you need to take accounting." I don't know I was, I wasn't somebody that came to college confused about what I wanted to do. I came over to get a degree in accounting. I was basically finished my accounting. By end of my junior year, I had finished all my accounting classes, CPA problems, that my first semester of senior year, literally my and that was when it was four years, you know, where now accounting is a five year program.
12:21 Matt Waller: Right.
12:21 Bill Dillard: But in those days it was a four year program. For some people. You could talk me ask me that question 10 different ways, and I get about the same answer, which is, I just don't see how you do well, in the world of business without an accounting background.
12:39 Matt Waller: And I know, Bill, when you look at the business you're in, where you have stores spread out across the country, you're constantly having to hire associates at the store level, you've got a, you've got fashion apparel that is changing every year. And you have to order,
13:05 Bill Dillard: Multiple times a year,
13:06 Matt Waller: Multiple times per year, and you have to order it way in advance. And it's coming here from different parts of the world. Sometimes parts of the world that are difficult to get to.
13:17 Bill Dillard: My main person that deals with our important business just got back from two weeks overseas. And I have been a big supporter of China. And the reason is because they, historically, if you order something from China, you get what you order. Price may not be, may not be as cheap as you could buy it in Bangladesh, but quality is always good. And you get it on time. And we've just had very good luck. Because of what's going on in the world today. We have moved 70% of our receipts for next year out of China.
13:56 Matt Waller: Wow.
13:57 Bill Dillard: We think we're ahead of anybody in the industry right now. But there's 30% percentage that there is no, no other source for right now. And this fee of 25% tariff right now, have to pay it. But we've protected ourselves. We had an early estimate of that about a month ago. And this week really delved into it and got back, starting to finalize production for next year, we're gonna have 70% out of China. That's a good thing, you know, it's because China has been a good partner for us. Some very good partnerships with factories over there.
14:40 Matt Waller: So not only do you have to pay attention to changes in fashion, but you have to pay attention to politics and world events. It seems like a really complicated business to run.
14:56 Bill Dillard: It's probably not much different than most businesses. I think if you work at running a company, you got the same problems. I mean, you said a while ago about hiring people. The number one thing in every business is always the people.
15:08 Matt Waller: Yeah.
15:08 Bill Dillard: I mean, it's just true here at your school that you said, you know, Gary brought in 80% new faculty in the accounting department, some of that was put out, not being his choice as we both know. Because 42, but it, you always hate it when you lose a good person. But it's never the end of the world. You know, trying to figure out how to get good people but one of the things that we emphasize, the university did a program for us about 10 years ago for questionnaire for hiring people, and I remember we got it looked at his skin function function pretty well. Only one thing wrong with this. I hope we never use it because I want us to create everybody who works for us, I don't want to wait for the walk-ins and we still today, we don't have anybody in our industry is close to the way we work at recruiting people. It's never ending. You know, just when you think you've got a good staff, you wake up and find leadership's gone cold on it. I was just I was in a store in Tuscon it's been really good so far. So we changed the manager about 60-90 days ago. The manager had been there several years, run the store. Terrific. Got sick, had some health issues. And over a couple of years he went from being a superstar where basically hadn't hadn't recruited any new people, the people there that had been with him a while he was protective of. Once it wasn't producing. You know, store had dramatic, I mean it gone from being a top 10 or 15 store in the country, certainly top 25, to bottom half in the last 18 months. You know, what we set and talked about last week, or this week, was the fact that they will work on changing the staff. That's what it always comes down to.
17:20 Matt Waller: Yeah. Thank you for visiting with me today, Bill, really appreciate it.
17:25 Bill Dillard: Always a pleasure.
