Kim Eskew rises from stock boy to CEO at Harps Food

For nearly a decade, it has always been the plan for Kim Eskew to succeed Roger Collins as CEO Harps Food Stores Inc. It was just a matter of determining the right time.

“We just completed a five-year loan agreement that planned our growth out for the next five years, for the last three years we have been inundated with new competition from other stores, and that has finally slowed, and I keep having birthdays,” Collins said during a recent interview at the company’s Springdale headquarters. “The three of those things combined made it seem like this is a really good time.”

For 39 years, Eskew, 60, has learned the ins and outs of the grocery game. Specifically, the Harps grocery game. He went to work there as a part-time stock boy and cashier in 1977 while attending the University of Arkansas. He worked almost every job in the business until 2008, when he was appointed president and chief operating officer, second in line only to Collins.

Eskew’s commitment to the only company he’s ever worked for was rewarded Nov. 17, when Harps announced Collins was stepping down as CEO and Eskew was elected by the board as his successor. Collins, 67, will maintain his title of chairman as he transitions into semi-retirement.

In an email, National Grocers Association President and CEO Peter Larkin wrote: “Roger Collins’ tenure at the helm of Harps is one that should be studied by anyone who wants to succeed in the food retailing business. Outstanding leadership and a keen sense of what consumers want from their supermarket are just two of the traits that have made him one of the best in the industry. He is one of the smartest and kindest people I know.”

Collins joined Harps in 1986 as the company’s top finance officer, and was eventually appointed chairman and CEO in 2000, the first time since the company was founded in 1930 someone outside the founding Harps family would lead the business.

He took over after Gerald Harp — one of four children of founders Harvard and Floy Harp — announced his retirement. At the time, the company had about 43 stores. Harps opened its 85th store on Nov. 19 in De Soto, Kan., a suburb of Kansas City.

“Gerald Harp gave me my chance to run the company, and now it’s Kim’s turn,” Collins said. “He will do a great job.”

SWEET SUCCESS
Eskew, 60, assumes the top spot of a company that is a pillar of Northwest Arkansas. Harps Food Stores was founded as Harps Cash Grocery in 1930 and was largely a family-owned business for decades, although management owned some of the stock.

But in 2001, Harps bought the stock held by the Harp family and other investors to become 100% employee owned through an employee stock ownership plan (ESOP). Since then, the per-share value in the plan has grown from $27.90 to roughly $347 per share, Collins said.

“We just finished our 11th consecutive year of record earnings,” he said. “We have paid out to our employees more than $100 million. We don’t see a lot of people wanting to leave.”

Harps now has about 4,100 employees and a store footprint that covers Arkansas, Oklahoma, Missouri and, most recently, Kansas, primarily in smaller, rural areas. Collins said the company is projected to have sales in fiscal year 2017 — ending the last Sunday of August next year — of $770 million. For perspective, annual sales passed $500 million in 2011 and topped $640 million in 2013.

Harps is now the largest employee-owned company headquartered in Arkansas and the largest grocery store chain based in the state. According to the National Center for Employee Ownership, Harps is also the sixth-largest employee-owned grocery business in the U.S.

The company’s success was recognized earlier this year when The Shelby Report, a leading publication for the food and grocery industry produced by The Shelby Publishing Co., named Harps its retailer of the year for the Southwest region of the U.S., which includes Texas, Oklahoma, New Mexico, Colorado and portions of Louisiana, Missouri, Kansas and Arizona.

The successes are even sweeter, Collins said, considering they have been achieved in the shadow of Bentonville-based Wal-Mart Stores, America’s largest grocer. Collins said the retailer opened as many stores in the Harps footprint from 2014 to 2016 as it did from 2001 to 2013.

“Walmart is tough competition,” he said. “Every store we have essentially competes with a Walmart. We don’t have a lot of stores that don’t have a Walmart in the same place.

“The growth has been really amazing since 2000,” he added. “I think we all realize we have been blessed. We’ve accomplished something that is really unusual and really special.”

RAZORBACK FAN
Eskew was born and raised in Piggott, a small town about 55 miles northeast of Jonesboro. He began his college education at Arkansas State University in Jonesboro before transferring across the state to the UA in Fayetteville after his freshman year.

Eskew grew up, he said, “a huge Razorback fan,” largely because of local sports icons of his childhood — Gary Adams and Tommy Dixon, standout athletes from the Piggott High School football team who were recruited to play for Frank Broyles’ Razorbacks in the late 1960s. They eventually became starters in the same defensive backfield, and Adams was a three-time All-Southwest Conference safety and punt returner. He was inducted into the University of Arkansas Sports Hall of Honor in 2011.

“When those guys went to Fayetteville to play for the Razorbacks, it was a big deal,” Eskew recalled. “Everybody in Piggott listened to every [Razorback] game on the radio because the two hometown boys were playing. I remember listening to all the games when I was a kid and it seemed bigger than life to me. That was one of the compelling reasons I went to the UA.

“And I think this is also true: the further you get away from [Northwest Arkansas], the bigger the Razorback mystique is. I talked to Frank Broyles about that once.”

Once in Fayetteville, Eskew knew he needed a job to support his pursuit of a degree. He had some grocery experience working at a store in Piggott, so a Harps ad he saw in the newspaper drew his attention. He was hired in August 1977 just before the fall semester began. Eskew worked regularly about 28 hours a week while school was in session.

“During the summer, I worked all that I could,” he said.

A high school aptitude test had funneled Eskew to becoming an engineering major at the UA. But by the second year of the degree path, a realization set in.

“I could tell my interest level in engineering was not real high; it didn’t excite me,” he recalled. “And for whatever reason, I felt pretty good about the grocery business. Harps may have had around 11 stores at the time, but I saw opportunity for advancement.”

Initially, Eskew thought becoming a store manager was a laudable goal. It was a stable job, he thought, and job security was appealing, drawing on the experience of a hardscrabble childhood. His father, Vaval Eskew, rigorously worked two jobs most of his life to support the family, often starting the day before sunrise and ending it well after dark.

“I came from a really, really poor family,” Eskew said. “Now, I had a great childhood and wouldn’t trade it for anything, but it was tough. People who knew my dad say he was the hardest working man they’d ever seen, and he did everything he could to provide for his family and never complained about it, but it was hard. And I thought there’s got to be an easier and better way to make a living.”

Eskew’s first full-time job with the company was closing manager for the Harps on U.S. Highway 412 in Springdale. He did that for about four months after graduating college in 1980 — with a degree in administrative management — before taking a grocery manager position at a store in Mountain Home. He remained there several years, eventually becoming store manager from 1986 to 1989. From there he was promoted to district manager, director of merchandising and advertising, vice president of marketing and executive vice president, president and COO and now CEO.

He is part of an executive leadership team that’s been with Harps for several years, helping guide the company through an extraordinarily competitive landscape to become one of the industry’s fastest growing retailers.

“Our culture has always been, we’re going to figure out a way to be successful,” Collins said. “No matter how many stores open against us, no matter what happens, we’re going to figure out a way to be successful. The members of our senior leadership team all come from the culture of, ‘We have to do this. We have to figure this out.’ They are all committed to our success.”

As Eskew’s profile has risen with Harps, so has his standing within the grocery industry. He sits on the board of directors of the Oklahoma and Missouri state grocers associations, and he is also a board member of the National Grocers Association.

“Kim is uniquely positioned to take over as Harps CEO,” Peter Larkin wrote. “He knows the business inside and out and played a leading role in the impressive growth of an independent supermarket chain that operates in Walmart’s backyard. It says a lot about Kim and the entire Harps’ team that they go head-to-head with the world’s largest retailer and continue to win.”

THE BUCK STOPS HERE
Eskew said many of his job responsibilities won’t change now that he is the company CEO. He has been involved in determining the company’s course for several years, sharing the decision-making duties with Collins in many areas.

“I guess the biggest difference is now the buck really does stop with me,” he said. “Roger and I, of course, communicate a lot every day, and we had the areas we felt like we were primarily responsible for. He will still be involved, but a lot of those decisions are going to be mine to make.”

With almost four decades of industry experience at his disposal, industry leaders believe Eskew is exceptionally qualified to lead Harps into its next chapter of success and growth, which doesn’t show signs of stopping. Harps entered the Kansas market for store No. 85 when it opened a location in the Kansas City suburb of DeSoto. The company is also on the verge of closing a deal to acquire the Big Star Food & Drug grocery store in Perryville.

“Kim’s heritage with the organization is strongly complemented by a visionary perspective of what’s to come,” Stephanie Reid, executive vice president of Shelby Publishing Co., wrote in an email. “He has earned the respect of the executive committee and has worked hand in hand with Roger Collins to produce more than a decade of record earnings and Arkansas’ largest employee-owned company.”

On the horizon, Eskew acknowledged the growing trend of e-commerce in the grocery industry but said it isn’t an urgent issue for Harps. He said the most practical application for Harps in the digital segment would be the “click and collect” system, where customers select and purchase their items online and then pick them up at a prearranged location, already bagged.

“I think you can do click and collect and make a little money, but what you’ll finally put in the bank is going to be less than half of what you would if the customer had come in to the store,” he said. “So it’s a little troublesome to me, where this might be marginally profitable, because no one is charging customers anything to do it. Everyone is placing a lot of emphasis on it, but I don’t think anyone is making much money doing it.

“I’m having a hard time getting excited about it, but we are looking at it. If you ask me do I think we’ll eventually do it, I do. When, I am not sure.”