Wigwam Stores Inc. - Further Expansion

Further Expansion

After the huge success in Hawaii, Wigwam was able to expand even more. Near the end of 1960, Wigwam took on a new state. Arizona was similar to Hawaii since it was a very young state, so there was much opportunity. It seemed like the perfect next step for expanding the company, but there was a problem. The state already had a business with the name of Wigwam. The Wigwam business in Arizona wanted $15,000 for the rights to the name. The partners of Wigwam got together and decided that to carry the name to the state of Arizona was not worth that amount so they decided to call the Arizona store chain “Totem.”

The expansion soon made its way into Southern California. At the peak of the southwest division, the Southwest had 25 stores between the two states. In California, the stores that Wigwam took over were Malcum and Webb’s . The group decided to keep the names of both stores. There were also some Department stores with the name of Wigwam opened in the Golden State. Shortly after Wigwam moved to the Southwest. The business needed more capitol to continue the high rate of expansion. The answer was the stock market. The company became a public company in 1970. This is referred to as an IPO. Wigwam initially sold 250,000 shares of stock originally sold at ten dollars a share. The Wigwam stock was an “over the counter stock” and was not traded on the larger stock exchanges such as the New York Stock Exchange. Wigwam’s official business name was Wigwam Stores, Inc., after it became public.

Becoming a public enterprise has its advantages and disadvantages. Wigwam Stores, Inc., did receive its capitol it needed to expand to more stores, along with houses and office buildings, but along with the capitol came shared interest in the company’s future. In 1975, there was a proxy fight amongst the company. A proxy is how shareholders of a company vote on the company’s decisions, so the stockholders have a voice in the company. Many of the major investors along with one of the original partners, Adler, wanted Wigwam and its sister department stores to open all seven days of the week, including Sunday, which in past was always closed for the Christian tradition of Sabbath. Homer Powell was a strong Nazarene, a denomination of Christianity, and did not want to have his company opened on Sundays. So, the other four partners decided to eradicate the problem and buy Adler out of the company. In order to do so they needed to sell many stores to raise enough money to make the buy out. Homer Powell decided to sell of the entire Hawaiian and Seattle sectors of the company. Selling these store made enormous amount of profit and the partners easily bought out Adler. By this time Homer Powell was ready to step down as president of the Wigwam business and soon retires.