Outside a rented four-apartment compound on St. Maarten January 1, 1989, Stew Leonard Jr. was filling balloons with air. Their strings, light in whatever breeze blew on the Dutch side of the island that day, needed anchoring.
Kim Leonard, his wife, was inside baking a cake. Their first-born daughter, Blake, was turning 3, and a celebration was in order.
Three generations of the Leonard family had gathered on the Caribbean island for the holidays. Vacations like this were the reward for the family’s persistent hard work: Under the leadership of his father, Stew Leonard Sr., Stew Jr. had worked to turn a Norwalk, Connecticut, dairy into a booming icon of fresh-foods retail. But the tragedy that befell the Leonards that day was more passive in nature. Kim would later call it a lapse.
The couple’s second child, 21-month-old Stew Leonard III, or Stewie, had gone missing. Panic erupted. They ran all over looking for him: down to the beach, to the swing set, to his room, to the driveway. For a moment, they thought maybe he had gotten out on the street. It did not occur to them to look in the pool. When they did, they saw a little yellow shirt floating in the water. “I dove in and it was too late,” recalls Stew Jr.The “lapse” would later be diagnosed as a miscommunication between husband and wife. “I thought Stewie walked in with her, and she thought he was out with me,” Stew Jr. says. When they returned from the hospital after attempts to revive Stewie failed, they spotted a few balloons floating in the pool. They deduced that Stewie had fallen in reaching for one, and his diaper likely weighed him down in the water. The balloons were still buoyant, unfazed.
Stew Leonard III, or Stewie, drowned tragically in 1989 |
On a gray day in late October 2014, Stew Jr. makes his way through the single, meandering aisle at the Yonkers Stew Leonard’s en route to the upstairs conference room. In stretches between 90-degree turns, he passes a coffee bar, a bakery, a flower shop; a station dedicated entirely to fresh mozzarella cheese; a rice-cake maker that fires freshly popped rice cakes at an aisle-facing glass barrier; a brigade of singing and dancing animatronic robots. But perhaps most notably, shoppers—everywhere. And Stew Jr. cannot round a corner without being spotted. Over and over, eyes open wide, selfies are requested, praise is showered. In this aisle, he is famous.
“I think it’s exciting,” he says. “But it’s also very humbling, because you go to another city and it’s like, ‘Stew who?’” He qualifies his local celebrity by saying he is at the bottom of the food chain in his home, with his wife, four daughters (they are 28, 25, 23, and 19), and a female dog. But as CEO, Stew Jr. is the face of Stew Leonard’s. In many ways, he is the Stew Leonard’s brand. He appears on commercials, at events, in the media, at stores, touting not only the Yonkers store, but those in Norwalk, Danbury, and Newington, Connecticut. A fifth location will open in Farmingdale, New York, on Long Island, in 2016. For that store, Stew Jr. will deploy the same single-aisle design that has proved so successful: 11 million shoppers spent $400 million at his stores last year (including nine Stew Leonard’s Wines locations). Yonkers is the highest grossing by a narrow margin, accounting for $100 million.
Stew Leonard Jr. with his wife, Kim, and four daughters (from left) Blake, Madison, Ryann, and Chase
That these aisles generate revenues beyond any logical expectation relative to their size is a marvel of modern retailing. The store earned a 1992 Guinness world record for greatest sales per unit area of any single food store in the world.
Two thousand employees facilitate the windfall and, according to Fortune (which has named Stew Leonard’s to its list of 100 Best Companies to Work For 10 years in a row), they are among the best treated employees of any American company. They are an integral part of the business plan: Doug Zucker, for example, began his career in Norwalk 28 years ago bagging groceries. Today he is the director of operations for Stew Leonard’s Wines and has a Stew Leonard’s-sponsored MBA in wine management, having traveled to Hong Kong, Bordeaux, Australia, and California to learn the trade. “My story is far from unique,” he says.
Stew Jr. is the steward of the company’s legendary emphasis on customer satisfaction, something his father institutionalized. During one stop, Stew Jr. is buried in conversation with an elderly female shopper. She is complaining about the store’s barbecue sauce’s recently recalibrated flavor. Fifteen minutes later, in the conference room upstairs, Stew summons a sample to taste for himself. It’s too smoky; he prefers an open-pit flavor.
The Leonard family around the Norwalk store’s sign in 1971, two years after opening
Tom, Beth, Stew Sr., Marianne, Jill, and Stew Jr. Leonard on Thanksgiving Day in 2010
Complaints or not, customers are thrilled to see him. Dark-haired, broad-bodied, and standing 5’9”, his voice is rasp and carries frequent notes of enthusiasm. His gaze is direct and, with customers, he is attentive. His interactions with them, and with employees, speak to an emotional intelligence deployed with the finesse of a well-liked politician. “He could be running for senate or something, but he doesn’t want to,” says Stew Sr. “He’s that gregarious type of guy. He is exceptionally good with meeting people and dealing with people.” He exudes optimism. After decades, he remains enthusiastic about the store’s signature singing animatronic robots, and he does not see any reason Stew Leonard’s will not double in size in the next decade, as it has the two decades prior. Ellen Story, who runs the Yonkers human resources department and has worked for the company for 28 years, can’t help but feel positive around him. “He’s very creative, enthusiastic, and energetic,” she says. “He has a magnetism and energy that makes you think creatively. He makes you feel like all things are possible.”
Stew Jr. is interviewed during the 1982 launch of Paul Newman’s salad dressing in Norwalk |
Perhaps his rosy outlook stems from a seemingly inexhaustible reservoir of energy. Stew Sr., who lives four houses down from Stew Jr. and Kim in Westport, Connecticut, on Long Island Sound, says it’s not unusual to see a boat pass with Stew Jr. trailing behind on water skis. (Stew Jr. and his brother, Tom, were Connecticut waterski champions in high school.) He travels often, and Kim reports that Stew Jr. is “only just beginning” to be able to relax on vacations now that he’s 60. “The wheels are always spinning,” she says.
Stew Jr. was not thinking much about his father’s “dairy,” as he called it, on a morning flight from Kathmandu, Nepal to New Delhi during the summer of 1977. He’d just earned a BS in accounting from Ithaca College and was traveling the globe on Pan Am’s Flight 002, an around-the-world service. (It was a graduation present from his parents.) Stew Jr. had decided to go his own way; he had just accepted a job offer from Price Waterhouse, today PricewaterhouseCoopers.
By now, calling his father’s burgeoning grocery business a dairy was misleading, but in his defense “dairy” was a habit of speech bred long ago into the Leonard family vernacular. Stew Jr.’s grandfather, Charles Leo Leonard, started Clover Farms Dairy in the 1920s, delivering milk door-to-door by horse and buggy. When he died unexpectedly of a heart attack, a 21-year-old Stew Leonard Sr. took over. Stew Sr. married Marianne Guthman in 1952, and they had Stew Jr. in 1954. Tom was born a year and a half later and two sisters, Beth and Jill, after that.
“I remember growing up around the dairy all the time,” says Stew Jr. “I would go next door to the dairy plant with my work boots on. My dad gave me a bunch of keys I put on my belt; I wanted to look like one of the milk truck drivers. It was like a little kid wearing a fire fighter uniform.”
In the 1960s, delivery milk began its slide into obsolescence, and in 1968 the State of Connecticut seized Clover Farms to build an extension of a highway, Route 7, through the center of the property.
On November 30, 1969, in a new Norwalk location (the same site as today’s Norwalk store), Clover Farms Dairy opened, built to resemble a barn (a fitting home to the chicken, sheep, and calves that came with the property). In stock: milk, eggs, bread, and ice cream. The name changed to Stew Leonard’s two years later.
The store’s opening was a defining mark on his adolescence, says Stew Jr., who was 15 at the time. He found himself more invested in the store than his academics. “It was all hands on deck. The whole family helped out… I worked more than I studied,” he says. He also swam, played football, waterskied competitively, and, as he describes it, played embarrassingly bad basketball.
Stew Jr. graduated from Staples High School, the public high school in Westport, Connecticut, in 1972, but enrolled for a yearlong graduate course at the Westminster School in Simsbury, Connecticut, to prep for college. “They were relentless,” he recalls. “It really refocused me toward academics.”
Working at the store in high school with his father was an education in its own right. “I was able to take real-life experiences I had with the business and apply the academics to my experience, rather than vice versa.” He gained confidence from solving problems on the fly, working with customers, and doing “whichever job needed doing” at any given moment.
But four years away at Ithaca College led him to contemplate a life independent of the store. By the time he left on his world tour, he had already delivered the news to his father that he wouldn’t be joining the family business. Stew Sr. was disappointed, but understanding.
During the leg between Kathmandu and New Delhi, Stew Jr. found himself next to “a sheikh-looking guy with a big turban on his head.” They got to talking: “I told him, ‘I got a job at Price Waterhouse.’ I said, ‘My grandfather who was a German Jew chased out of Germany by Hitler in the ’30s came over to America, and the only survival skill he had was his knowledge of accounting, so I figured I would go out and work for an accounting firm, and I don’t really want to go into the family business.’”
The man’s response altered the course of Stew Jr.’s life. “He said, ‘Don’t take your life’s energy and give it outside of your family. If you have an accounting skill and you want to be an accountant, go and do that with your family,’” he recalls. “I came back and asked my father, ‘Can I come work with you?’ And he gave me a big hug and said, ‘Are you kidding me? I’d love that.’”
Hilgard Avenue spans the eastern border of the University of California, Los Angeles. It snakes south from Sunset Boulevard, curvy and hilly and increasingly so as it descends into Westwood Village south of UCLA Medical Center. On its eastern side sit Mediterranean-style sorority houses—light-stucco whites, beiges, and salmons topped in heavy terra-cotta roof tile.
“I came back and asked my father, ‘Can I come work with you?’ And he gave me a big hug and said, ‘Are you kidding me? I’d love that.’” |
Stately as they were, the homes were not what caught Stew Jr.’s eye as he climbed the avenue on his way to campus while earning an MBA at UCLA’s Anderson School of Management from 1980 to ’82: It was the women pouring out of them. “One was prettier than the next,” he says. “On my way to school, I’d have to walk up Hilgard…I said I have to meet one.”
The best way to meet a sorority girl, a friend advised, was to become a dishwasher at a sorority house. “There was a housemother, and I went and convinced her to hire me,” he says. “From that, I ended up getting a blind date with my wife.”
Kim Kral, daughter of strict Serbian Orthodox parents, was skeptical when Stew Jr. invited her to the Kappa Kappa Gamma spring formal in May of ’82. She was living at her parents’ San Marino home for the last quarter of college—a long, out-of-the-way drive. “I kept throwing all of these obstacles in front of him,” she remembers, laughing, “thinking that he would not want to go. I learned after the fact that he had already bought a suit, and he didn’t care what I was like, he just wanted to get into this party where there were 110 girls.” She adds, “What I should have realized about Stew is that he’s very persistent. He’s very spontaneous.”
It was the latter quality that had led Stew Jr. to catch his father off guard two years earlier, when he announced his plan to attend business school on the West Coast. He’d been working at the store since 1977 in all different departments, and the frenetic nature of the business was getting to him. He thought an MBA would help him gain a strategic perspective.
“[The business] was growing so fast, I was like, there’s got to be a better way to do this,” he explains. He spent two years pouring over case studies. Big corporations—McDonald’s, IBM. “I remember they were all messed up, too. I realized, hey, just put your seatbelt on and try to bring some strategy and some systems to the company.”
Stew Jr. and Kim married in Los Angeles a year and a half after their blind date. “There was just an alignment,” he says. “Our values were similar, our outlook was similar. She has a great sense of humor, and I joke her all the time. She just jokes me back.”
“He makes you feel like all things are possible.” |
They moved back to Connecticut in ’83, and the store continued to grow through the ’80s. By then, Stew Leonard’s was selling far more than dairy—there was a bakery, cheese shop, and full-service dairy plant. A range of fresh foods. Stew Jr. shared an office with his father—who named him president when he came back from Los Angeles—and was focusing on growing the business. With his MBA, Stew Jr. had developed an itch to expand and pushed for a second location. At some point in the late ’80s, it was decided that a second store would be built in Danbury, Connecticut.
But amid the success of the business, Stewie III’s death in ’89 would prove the greatest trial of Stew Jr. and Kim’s relationship.
“We didn’t grieve the same,” says Kim, “but we each tried to find a way. [Stew] had this big manila folder that he had collected all of these poems and letters, and he would carry them around with him. And I had a girlfriend I’d go walking with a lot and just cry.”
The poems were of his own writing, and he’d often play covers on his guitar, inserting them as lyrics. For six months he slept with Viktor E. Frankl’s Man’s Search for Meaning, an Auschwitz survival memoir.
Kim is more expressive about the aftermath. “For many years, I thought Stew felt responsible because I thought he was watching Stewie. And Stew sort of thought I was [watching him]. So once we realized that, we were able to move forward.” Says Stew Jr., “Really what you want to do is forgive when something like that happens—when the most painful things happen.”
The drowning was, in effect, another light-bulb moment for him. “Before my son drowned, I probably thought that my children were important but not top priority to me, and after he drowned I realized how fragile those relationships are, and they jumped right up to number one on my list.”
“My wife sometimes will complain to me and say, ‘One of the girls snuck in my closet and took one of my nice sweaters,’ and sometimes I think to myself, ‘Boy I wish I could say that, I wish I could have a son that could come and take one of my nice sweaters. It just gives you an appreciation of your children, of your relationships.’”
In the wake of the tragedy, the Leonards started Stew Leonard III Children’s Charities, which has raised millions to promote water safety among children. The entire Leonard family is involved, including Stewie’s four sisters, who have been known to don the costume of the foundation’s mascot, Stewie the Duck. The foundation has published two children’s water safety books, including Stewie the Duck Learns to Swim, which has become a staple for swimming education courses nationwide.
The foundation has been a way to channel grief into action. “I encourage everybody to start some means of helping and giving back after a loss,” Stew Jr. says. “That’s been a real savior for us, just knowing we’re doing that.”
One day in August 1991, Stew Leonard Jr. was preparing to address a crowd of 1,000 at a speaking engagement. Fifteen minutes before he was scheduled to talk, a phone call came in—seven IRS agents had arrived at Stew Leonard’s in Norwalk armed with search warrants. They took file cabinets and computers and anything they could get their hands on. “I remember that moment,” he says, “It was like when JFK was shot, you remember exactly what you were doing.”
Two years later in October of ’93, Stew Leonard Sr. would plead guilty to conspiracy to impede the IRS, having defrauded the government out of some $7 million in unpaid taxes on $17 million skimmed from the store’s cash registers over a 10-year period. He was sentenced to four years and four months in prison and, in addition to the cost of his own incarceration, was compelled to pay the government $15 million in taxes, penalties, and the interest on skimmed receipts.
In his book, Stew Sr. describes a bad habit of withdrawing receipts from registers to pay employees and contractors. But the reality of the scheme was more elaborate and criminal, involving custom-designed software called Equity that wiped out record of sales of certain items. A good portion of the skimmed money paid contractors for store expansions, etc., but a good portion of it was stashed in a safe in Stew Sr.’s office, and a good portion was ferried in suitcases to St. Maarten, where he has a vacation home.
Though Stew Jr. does not publicly admit to a role in the scheme, or that he even knew it was taking place, court documents suggest otherwise: “On the first day of each accounting week, Frank Guthman [Stew Sr.’s brother-in-law who was the vice president of operations], or in his absence Stew Leonard Jr., executed the Equity program and altered the previous week’s sales and financial data.” In the aftermath of the ordeal, it was reported that Stew Sr. agreed to plead guilty and pay hefty fines in exchange for Stew Jr.’s protection from charges.
Even though it was disheartening to see his father under such pressure, the revelation’s impact on day-to-day business matters was minimal.
“Stew Sr. would be the first person to tell you that he made a mistake,” says Yonkers store President Fred Salvino, who is closely tied to the Leonards and has worked for them for three decades. “But from a business perspective, there wasn’t one thing that changed. Our focus was, ‘let’s keep this thing rolling.’”
Was it humiliating? “Sure,” says Stew Jr. “They’re writing about you in the press. It’s very difficult. There’s no doubt it’s a tough time, but with the help of everybody, you get through. I think when that happened, I realized how valuable all of our people were at the store. They loved my father so much, and he did so much for so many people, and everybody just sort of rallied. It was very, in a way, inspirational.”
Things kept rolling. Stew Jr. became CEO of the company when his father went to prison in 1993. The Danbury location had opened in ’91, and by 2007, all four stores were operational. Today he is setting the stage for the next generation, requiring that his daughters and their cousins work a minimum of three years outside the business before they come to work at Stew’s—if they choose to come. Wisely, he wants them to have their reality check about work life elsewhere. “I think you learn that it’s not all that pleasant,” he explains. “That there are deadlines, schedules, days you don’t want to work.”
Stew Jr. is slowing down, but only slightly. He wakes up at 6:30 am to work out now, as opposed to 5:30 am. He still travels often, sometimes for work—speaking engagements, and visiting suppliers—and sometimes for pleasure. He collects wine, and Wine Spectator is publishing a feature about his wine cellar.
Could he imagine life without Stew Leonard’s the business? “It would be hard for me because I don’t know what I would have done,” he ponders. “But I really believe that whatever it is I’d be doing today, I’d be successful, because I’ve always said, ‘Yes please,’” he says, referring to a comment Amy Poehler made on David Letterman the night before we spoke. (Poehler says she’s always been ahead because she always said yes, then once she became successful, she added the please.) “I tell my kids the same thing: ‘Say yes, ‘I’ll do that, I’ll try that.’ Roll the dice. Learn. Listen. Keep a smile on your face and say please.”
Recently, balloons went up at the Yonkers store for its 15th anniversary.
