Monthly Pay 'n Save Corporation
by Mark Ziegler
In 1955, Jack Phelan and some friends gathered
in a Yakima, Wash., restaurant for a cup of coffee and a few minutes of
Thirty years later, that coffee break ranks as one of the most successful
in Northwest retailing history.
Jack, president and a founder of Bi-Mart, as well as a corporate vice
president, has announced his retirement from the firm effective Feb. 3.
Marty Smith, Bi-Mart's general merchandise manager and a 20-year
Bi-Mart veteran, has been named vice president and general manager of the
33-store discount chain, a corporate subsidiary based in Eugene, Ore.
Marty will assume Jack's responsi-bilities.
Jack was working in the real estate and insurance business in Yakima when
he and other local businessmen thought up the idea of a membership
discount store after reading in the Wall Street Journal about a similar
operation for federal employees in Southern California.
One man challenged the rest to put their money where their mouths were.
Each gave $50 to send two of the group to visit "FedCo" in
California, and they cut a deck of cards to see who would go. Jack drew
one of the high cards.
"You know, it's funny, but I don't even remember what card I
drew," Jack said. "Among us were a barber, lawyer and other
businessmen. That was the first time we had ever heard of that type of
operation. The idea of offering goods at way below retail prices almost
appealed more to us as consumers than it did as businessmen, because none
of us were what you would call merchants."
Jack was impressed with FedCo's membership feature, the lack of outside
signs and the store's closed-door concept.
"It was like a speakeasy -- you had to show your card, they'd push a
button, a buzzer sounded and they let you in."
When he returned to Yakima, Jack gave an enthusiastic report on the
revolutionary concept. Each man contributed $700 to start the store and
the group took out a bank load. The store opened later in 1955.
Jack remembers many initial problems.
"First of all, we had full-time jobs, so the store was open only from
6 p.m. - 9 p.m., five days a week. We'd be down there with our wives,
stocking shelves, working the cash register and helping customers.
"And we had trouble getting factory representatives to sell to us
because we were new. We had to get our merchandise from 'jobbers'
(wholesalers), which was much more difficult."
The firm also ran into legal questions regarding the Fair Trade Laws,
which restricted retailers from undercutting competition by selling below
manufacturers' suggested list prices. Bi-Mart's membership requirement, at
a cost of $2, basically was a device to circumvent the laws.
"After about four years, suits were filed against us by four major
manufacturers, with five others waiting in the wings," Jack said.
The laws were later ruled unconstitutional and Bi-Mart has retained the
membership device. It gives the chain a means of determining where
customers are and information to make expansion decisions. It also gives
members a sense of belonging and is a convenient source of identification
-- Bi-Mart's bad check losses are extremely low.
"And all those major manufacturers now sell direct to us," Jack
Expansion was slow in the beginning. It was seven years before the second
store opened in Eugene in 1962, and that almost didn't occur.
"A Columbus Day storm severely damaged the building and filled it
with mud and water," Jack said. "Fortunately, the store opened
Nov. 11, just in time for the Christmas season. If we hadn't opened then,
we would have gone broke."
Eventually, Bi-Mart expanded to 13 stores, but the firm was hard pressed
for additional capital and in 1975, it was sold to the Corporation.
"We couldn't expand by ourselves," Jack said. "It turned
out to be a good deal for both parties. We've more than doubled our stores
since the sale."
Jack attributes Bi-Mart's success to the infusion of capital from Pay 'n
Save; a policy of "the best possible merchandise at the lowest
possible prices"; basing profits on volume sales; store hours of 11
a.m.-8 p.m., which reduce overhead by using only one shift of workers; and
marketing a varied product mix, thus making the chain "less
susceptible to the cyclical nature of the economy."
Intending to retire five years ago, Jack said he couldn't talk himself
into it because he was "having too much fun." His current plans
are to relax for a few months and then reenter business in a part-time
capacity. He and his wife Marion plan to move from Eugene to Portland,
Ore., in the near future.
Jack will remain a Bi-Mart man.
"I considered moving to Seattle, but ruled it out because there are
no Bi-Mart stores there."
The Oregonian August 27th, 2009
A funeral Mass for John "Jack" Joseph
Phelan will be held at 10:30 a.m. Monday, Aug.31, 2009, in St. Michael the
Archangel Catholic Church, Portland. Jack Phelan was born June 28, 1925,
in Chicago. He graduated from the University of Michigan with a degree in
business and served in the U.S. Navy during World War II. After the war,
the GI Bill enabled him to continue studies at the Universities of Notre
Dame and Harvard, earning an advanced degree in economics. In 1955, while
living in Yakima, he and several other businessmen started the Bi-Mart
chain of stores. In Yakima he met his future wife, Marion Spaulding, and
they were married there in 1956. Jack retired in 1985 and he and his wife
moved to Portland. Jack continued to work part-time with Bi-Mart on a
consulting basis during retirement. He greatly enjoyed his years in
Portland and took advantage of its theater, jazz music and fine dining
establishments. Jack was preceded in death by his wife, Marion; and is
survived by his daughter, Teresa Newton and his son-in-law, Forrest Newton
of Jack Phelan by his daughter Teresa
Dad grew up during the
depression in Chicago, IL. His
parents – a teacher and postman - raised him with a resolve to work
hard, save and get a good education. Though
he was an only child, his parents were from large Irish Catholic families
so his life was filled with lots of aunts, uncles and cousins.
His military service provided him with an excellent education.
Like many of his generation, this education enabled him to
contribute to the tremendous economic success of his country in the years
following World War II. In
Yakima, Washington, he founded the Catholic Credit Union and with other
investors, began the Bi-Mart Corporation.
The Bi-Mart was his focal point during his working career, and he
enjoyed and maintained many relationships with employees and co-workers
throughout the remainder of his life.
My Dad loved sports.
(What boy growing up in Chicago didn’t?)
His pride and joy were the football teams of his two Alma Maters:
Notre Dame and the University of Michigan.
With those two, he rarely suffered through a weekend: one or both
of his teams usually won their game (unless they played each other!).
He also adopted the Oregon Ducks, and looked forward to attending a
home game or two each year in the company of a good friend and business
associate with season tickets.
The Catholic Church was always a primary part of Dad’s life.
(Several of his cousins are nuns; naturally, he was an altar boy.)
Dad never traveled without knowing where the local Catholic Church
was located, and at what time mass was held.
Later, as my mother, Marion, became passionate about social causes
and political organizing, they both worked within the structure of the
Church to effect the changes they sought.
My Mother was a perfect foil for Dad.
As shy as he was around people he didn’t know, mother would wade
in and start a commotion. As I
mentioned, she was a political activist.
Over the years she was involved in the NAACP, the rise of the
Farmworkers’ Union, and numerous other organizations and causes.
My father was pleased to be associated with mom’s fights, and
though he was in more of a ‘supportive’ rather than ‘front line’
position, his presence gave my mother the courage and ability to follow
through with her ideals.
He loved to eat!
It was lifetime research to find good, tasty food and I believe one
of the reasons he and my mother retired in Portland: the city’s cuisine.
He appreciated the social aspect of his Portland eateries too.
When he went to his usual dining places around town he always
carried a 3x5 card with him with the waiters’ and waitresses’ names
along with the details of their lives: school, kids, avocations.
Whenever dad had a physical setback, he was certain to receive a
call from one of his waiter or waitress friends inquiring about his health
and whereabouts. More than
once, one of his friends would put together a ‘care basket’ of supper
and a bottle of wine and bring it over to him when he was unable to leave
In closing, I think the phrase that best suited him
was ‘tender-hearted’. My
Aunt May used these words to describe dad when she wrote me after my
mother died; I thought it was very fitting.
He came across as gregarious, but he was
shy and didn’t show his affection with ease.
He was far more comfortable showing kindness and interest in a
‘hands on’ fashion: taking you out to eat or sending a card with a
cartoon enclosed. Spending
time with my dad over the last 17 years, I’ve seen him reach out to
friends who are homeless. He
never went anywhere without a stack of dollar bills, neatly folded into
packets of two so he could hand it to one of his buddies down on their
luck. I think it surprised and pleased him that these folks kept track of
him, entertained him and appreciated his generosity.
I say this because he mentioned to me a few years ago that he ran
into one of his homeless friends who asked, “Jack, where have you been?
I’ve been worried about you.”
On his last birthday, I came back from my car to find him being
serenaded by Robert, who sang “Happy Birthday”, tip included.
And once he was on the streetcar with a man who recognized him and
thanked him again for his donation; he said it had really made a
difference as he was now working and off the streets.
During the depression, his father was one of the
lucky few who held a good job. He
undoubtedly saw many of his friends and their families suffer, and that
made an obvious impression on him: he never thought of Portland’s street
people as ‘undesirables’ or ‘bums’.
He simply saw them as people who were dealt a bad hand, and who
needed a few breaks to get back on their feet.
He would do the same thing for employees at Bi-mart over the years,
and go beyond what would be considered the norm when someone needed help
or a second chance. Dad took
his own luck and passed it on and in so doing this, he lived a long and
happy life… what more could one ask for.
remembering when ...
Best friend Kelly – took
entrance test for him took care of girlfriend also ;-)
Priest on train told him to do
his dad a favor and sign up for navy instead of marines -
Loosing too many planes during typhoon
season, took boat back to
pickup a downed pilot but the raft was empty -
a surprise meeting with cousin Claude Jr. in
Started Catholic Credit Union,
remembering Jack -
Jack was such a charismatic man and a wonderful
Jack was a really nice guy. I'll never forget him giving me a hard time
about showing up to a family event with only one bottle of wine (he had
four). He told me it was a good thing he showed up otherwise the party
would have ended early. Jack was always up for a good time. Ryan
Jack was the best! A serious business man who always knew how to have
fun and was quick with a joke. A compassionate thoughtful and kind
person who was always ready to lend a hand 'up' instead of a hand 'out'.
You will be greatly missed by all those lives you touched, but most
especially by your family. Suzi
Jack was such a charismatic man and a wonderful
conversationalist. I always enjoyed seeing him at family functions- the
conversation engaging and the wine always pouring. He will be greatly
missed by our family. Katrina