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Once penniless, Konar excelled at business

Once penniless, Konar excelled at business

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A brilliant and largely self-taught businessman, William Konar was decisive. Quick to size up and seize an opportunity gut instincts told him would pay off, he could be just as quick to recognize and abandon an unproductive course of action. 

Mr. Konar, who died June 18 at 87, was a Polish-born Holocaust survivor. He landed in Rochester in 1946 as an orphaned and penniless teenager. A beneficiary of a war-orphan resettlement program, he came to personify an American ideal of up-by-one’s-own-bootstraps success. 

He founded Clinton Merchandising Inc., which ran Clinton Drugs and Discount Stores, one of the first U.S. chains of discount drug stores. Ten years after launching the business and taking it public on the American Stock Exchange, Mr. Konar sold the 84-store chain to Melville Corp. in 1972 for some $21.5 million—a price that translates to $122.8 million in today’s dollars.

Mr. Konar named the company after Clinton Avenue, the Rochester street where he had landed his first jobs, working for a neighborhood grocery and as a delivery truck driver for Ma’s Root Beer, a locally owned soft-drink bottler.

Already a millionaire when he sold the Clinton chain, Mr. Konar took stock in Melville as payment. It proved to be a canny move. He also went to work for the company, remaining there for nine years.

Melville at the time was a relatively modest player in the U.S. chain drug store market. It was overshadowed by far larger rivals such as Walgreen Co. and Rite Aid Corp., whose offer Mr. Konar had spurned a year earlier.

Mr. Konar’s rejection of Rite Aid’s bid came very late in the game, said his son Howard Konar, an attorney and former partner of Boylan Code LLP who now heads Konar Properties, a regional real estate development and commercial property management firm his father started after retiring from Melville.

Rite Aid’s acquisition of Clinton Merchandising had been in the works for months as Mr. Konar, Rite Aid officials and their respective attorneys hammered out terms. All that remained was for Mr. Konar to sign off on the deal at a closing slated to take place in New York City.

At the closing, Mr. Konar for the first time met Lewis Lehrman, then president of Rite Aid.

Lehrman was cordial, but casually mentioned that a few previously undiscussed modifications to the deal had been made to conform to Rite Aid policies. The changes were minor, he assured Mr. Konar.

Among them was a reduction of a three-year employment guarantee for key Clinton employees to one year. Mr. Konar had seen the three-year guarantee as critical, but voiced no objection. Instead, he excused himself, telling the assembled executives and lawyers that he had to go to the men’s room, Howard Konar said.

Since he had left his jacket and briefcase behind, the Rite Aid contingent for a time assumed that Mr. Konar had gotten turned around in the unfamiliar building and would show up soon, his son said. But when Mr. Konar did not return after an hour and a half, they called his assistant and learned that he had decided to scrap the deal and had gone home.  

As they often did, Mr. Konar’s instincts turned out to be prescient.

After Melville, which also had owned shoe and apparel retail chains, shortened the name of its Consumer Value Stores drugstore chain to CVS Corp., CVS grew to become the second-largest U.S pharmacy, pushing Rite Aid down to the number three slot.

Business acumen
Mr. Konar’s apparently snap decision to scrap the Rite Aid deal was perhaps more illustrative of an ability to almost instantly weigh the pros and cons of a deal than of a propensity for rash moves.

Former restaurateur Dennis Kessler, who with his brother Laurence previously owned a chain of Burger King eateries and was one of Friendly Ice Cream LLC’s largest franchisees, became acquainted with Mr. Konar as a fellow volunteer working for Jewish charities. He came to deeply admire Mr. Konar’s business acumen. 

“Someone had approached us to develop a hotel in Watkins Glen, where we owned a Burger King, and I had the idea of asking Bill Konar for advice,” Kessler recalled.

His conversation with Mr. Konar was brief but to the point, Kessler said. After he was apprised of the potential hotel deal, Mr. Konar had only one question:

“How many rooms?”

When Kessler told him the plan was to build a 40-room inn, Mr. Konar again replied tersely.

“Not enough,” he barked, in English that never lost the Polish-Yiddish inflections of his youth.

It was the sum total of advice Mr. Konar cared to give on the subject. But it was all he needed to hear, Kessler said.

“As I walked out, I thought about it and I realized he must have been thinking about return on investment and he’d determined that 40 rooms would not generate enough,” Kessler said. “It must have been about ROI.”

As a solicitor for charitable causes, Kessler added, “Bill would ask you to contribute, but he would always have contributed twice as much.”

Holocaust survivor
Mr. Konar, who worked for the international Israel Bonds campaign and other Jewish causes, also helped found the United States Holocaust Memorial Museum. He initially contributed $1 million to the Washington, D.C., museum and followed with generous later contributions, Simon Braitman said.

A co-founder of Simcona Electronics Corp., Braitman is a contemporary of Mr. Konar’s and a fellow Holocaust survivor who joined Mr. Konar in Rochester in 1947 as part of the same orphan resettlement program.

His father never spoke much about his wartime experiences, but opened up to Carol Loomis, a reporter who did a 1998 profile of Mr. Konar in Fortune, Howard Konar said.

The magazine originally had planned to focus the piece on the business success of several Holocaust survivors, with the survivor’s personal details included as a sidebar. But after Loomis turned in an initial draft, an editor asked her to make their personal accounts the main focus. So she had to come back and pump Mr. Konar for added details.

By that time, Mr. Konar felt like Loomis was a friend, and so overcame his habitual reticence, Howard Konar said.

Mr. Konar ended up on the issue’s cover in photo portrait that showed a pained and shirtless Mr. Konar at the center of what appeared to be a vaporous swirling storm.

“After I saw it, I asked him how he happened to appear naked on the cover of Fortune,” Howard Konar said.

The answer: Mr. Konar was suffering back pain and had immersed himself in a hot tub for relief when the magazine’s photographer began snapping pictures. Mr. Konar protested, but advising him that the photographer had been shooting pictures of no less of a celebrity than John Travolta a day earlier, Loomis asked him to cooperate. Mr. Konar let the session proceed.

The Fortune profile paints Mr. Konar as a tireless worker, who by age 23 in the early 1950s had built a business that was bringing in $1 million a year and after a few more years had upped its annual take to $3 million. In 2015 dollars, that would translate to $8.9 million and $26.4 million, respectively.

The piece quotes Mr. Konar’s wife, Sheila, whom he married in 1952, on the topic of Mr. Konar’s workaholism.

“He was crazy; I didn’t have a husband,” she told the magazine.

When the Konars’ house caught fire, Sheila Konar told Fortune, Mr. Konar said he was too busy to come home and sent one of his managers to help instead.

Mr. Konar’s older brothers, Harry and Morris, who endured the family’s wartime experience alongside him, disputed some of Mr. Konar’s accounts of the war years, Howard Konar said. Both older brothers are now deceased.

Even Mr. Konar’s actual age was a point in question. It seems he might have shaved a few years in order to qualify for the orphan relocation program, which set an upper limit on the age at which it would relocate children.

It is possible his father maintained the fiction after coming to the United States, continuing to state his birthdate as two years later than it actually was, Howard Konar speculated.

Braitman, who on the advice of an official also lied to make himself eligible for relocation, stating that he was an orphan when his father was alive at the time, confirmed Mr. Konar’s deception.

Roots in Poland
Before the war, his family and Mr. Konar’s family had been next-door neighbors in their native village, Maciejowice, then a thriving center of trade for produce and goods shipped by boat south on the Vistula River to Warsaw.

When he was 2 years old and Mr. Konar, the youngest of four siblings, was four, the Konars moved to Radom, a resort area that his own family later relocated to, Braitman said.

When the Nazis invaded Poland in 1939, the Germans forced both families into ghettos along with other Jewish residents. They then selected able-bodied teenagers and adults, including the Konar brothers, to send to forced-labor camps in Germany.

Mr. Konar’s older sister, her husband and child and their parents did not survive. His brothers eventually joined Mr. Konar in Rochester.

After the war, Braitman said, he and Mr. Konar, along with other displaced and orphaned children, were housed in a former school for the disabled near Heidelberg, Germany. As part of their eugenics and racial purity regime, the Nazis had put the all of the school’s former students to death.

Initially, Braitman said, the orphan relocation program sent him to live with a family in Cleveland, Ohio. 

Shortly after he arrived, however, Braitman received a phone call from Mr. Konar. Lacing the query with an unprintable epithet and insisting that Braitman should join him in Rochester, Mr. Konar asked Braitman what he was doing in Cleveland.

After authorities in charge of the resettlement program agreed to reassign him, he was taken in by a family living not far from Mr. Konar’s foster home, Braitman said. They both attended Benjamin Franklin High School, where Mr. Konar was a year ahead of him.

He and Mr. Konar also worked together, earning 75 cents an hour at a neighborhood Star Market grocery store as high school students.

Later, when he was attending Rochester Institute of Technology and Mr. Konar was at the Rochester Business Institute, they lugged heavy wooden 12-quart bottle crates to Central Avenue stores as deliverymen for Ma’s Root Beer. The pay was still 75 cents an hour, Braitman said.

Mr. Konar eventually moved into rack jobbing, becoming a middleman who stocked various manufacturers’ health and beauty products on grocery store shelves. A turning point came when his biggest customer, IGA Inc., decided to bypass rack jobbers and buy directly from manufacturers.

IGA’s pullout left his father stuck with a warehouse full of goods and not enough grocery shelves to put them on, Howard Konar said. Mr. Konar’s first idea was to clear the warehouse by selling items at a steep discount and ridding himself of the overstock. But as he watched the discounted items fly off the shelves, he came up with a better idea

In consumers’ lust for discount health and beauty products, Mr. Konar saw a previously undreamed of opportunity. Thus was Clinton Merchandising born.

In addition to his son, Mr. Konar is survived by his wife, Sheila, daughter Rachel (Rick) Guttenberg and five grandchildren.

6/26/15 (c) 2015 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email [email protected].