William Dillard, 87; Founded Chain of Department Stores

William T. Dillard, who built one of the nation’s largest retail chains out of a modest store he started during the Depression, died Friday at his home in Little Rock, Ark. He was 87.

Dillard was chairman of Dillard’s Inc., formerly known as Dillard Department Stores. The chain he started in 1938 with a 2,500-square-foot store in southwestern Arkansas now has nearly 350 stores in 30 states, including two California stores, in Palmdale and Stockton.

In 1989, Fortune magazine called the chain “a quiet superstar ... family run, highly computerized, extremely competitive and great for investors.”

Born in Mineral Springs, a small town 110 miles southwest of Little Rock, Dillard graduated from the University of Arkansas with a degree in business administration. He earned a master’s degree in business administration from Columbia University in 1937. The next year he borrowed $8,000 from his father, who ran a well-known country store, and opened T.J. Dillard’s in Nashville, Ark.

During the first year, the store did $42,000 in business and he made a $3,000 profit. Last year, Dillard’s had sales of $8.7 billion and was the nation’s third-largest upscale department store chain, behind Federated and May.

Hit hard by the economic decline, Dillard’s has seen its stock fall from above $50 in 1992-93 into the $10-$20 range recently. But the company is still run by the family, whose members hold five of the 12 seats on the board. Dillard, who worked full days well into his 80s, had turned over the day-to-day management to sons William II, Mike and Alex.

Dillard served in the Navy during World War II. By 1948, he had made enough money to open a department store in Texarkana. He sold the Nashville store and opened two more in Magnolia and Tyler, Texas.

By 1960, Dillard once recalled, he was 45 and making more than $500,000 a year. “But I wasn’t satisfied. I wanted to be a leading department store owner,” he said.

In 1963, he and some associates bought Pfeifer’s of Arkansas, then one of the state’s leading stores. Six months later, he bought Blass Co., another leading Arkansas store, in downtown Little Rock. Dillard moved to Little Rock, where he established his company headquarters.

When he realized that downtown stores were losing appeal, he began buying up locations in suburban malls and untapped small-town markets.

In building one of the country’s fastest-growing department store chains, he stuck to tried-and-true brands, such as Liz Claiborne in women’s clothing and Hickey-Freeman in men’s. He used a computer network to track what was selling and to keep his racks full when an item became a hot seller.

Before computers, Dillard had store managers call him every night with a total of the day’s receipts. When one manager said he had a slow day because of bad weather, Dillard said, “If I had wanted a weather report, I would have called the weather bureau.”

Dillard is survived by his wife, Alexa, and five children. Services are scheduled for Monday in Little Rock.