Around the turn of the century, Kohl’s ran into a little trouble, with declining sales and profit. Max Kohl said he attributed his success to selling good stuff and being nice to his customers. Kohl’s doesn’t put it that way, but that is essentially what they were failing to do at the time, making some bad decisions about inventory and allowing their stores, now in numbering in the hundreds, to fall into disarray. Investors were not happy. Heads rolled. Kohl’s recovered and began to grow again. Today it operates 1,100 stores and employs about 140,000 people, more than the population of Alexandria, Va., or Savannah, Ga. It makes a lot of money and wins praise for its environmental practices. That’s what happens when Max Kohl’s plan to run a better grocery store collides with the free market, including the critically important capital market.
The list of the firm’s top shareholders is heavy with big hitters: T. Rowe Price, State Street, Vanguard, BlackRock, Morgan. And a bit down the list you’ll find Brookside Capital, a hedge-fund operator and subsidiary of Romney’s firm, Bain Capital, which as of June had a position of about $100 million in Kohl’s, up significantly from the March reporting period. Because Kohl’s is now a $12 billion firm, Brookside is not a particularly big investor, and Kohl’s isn’t an especially big part of Brookside’s portfolio, which is heavy on Apple, DirecTV, Anheuser-Busch, El Paso Corp., Google, Kinder Morgan, and less cutting-edge firms, such as Macy’s.
Forget every stupid thing you’ve ever heard a politician say about “job creation” — this is what it really looks like. Entrepreneurs have ideas, management teams seek incremental improvements, and investors invest. Sometimes it works out, sometimes it doesn’t. There’s nothing dramatic about it, no great speeches, no grand plan to create 140,000 jobs at a single firm. It just happens. Sometimes a company makes a big bet on a promising firm, like Bain with Staples or Morgan with Kohl’s. Sometimes it is a quiet, conservative bet, like Brookside with Kohl’s. Both are necessary in the marketplace, and that is where the money comes from to make a couple of stores into a national retail powerhouse that sometimes needs an extra 52,000 employees to see it through the busy season. Maybe a part-time job at Kohl’s is not what you’re looking for, but those jobs at Apple and Kinder Morgan are a result of the same process. They sure as hell aren’t the result of politics. In the world of politics, one guy — the president — has an outsized role in everything. In the real world, lots of people play lots of small roles in making big things happen.