As Fred Rosen sees it, the odds against him in his fight against Wal-Mart are the most lopsided since “David took on Goliath back in the biblical times. Just the fact that most people never heard of me but everyone’s heard of Wal-Mart proves my point. With all their money and political clout, they could crush me.”
“My father, me, my brother–my whole family–all worked hard to make that name Sam’s mean something,” says Rosen. “Because of us, Sam’s means quality. And if you think I’m gonna let some outfit out of Arkansas come into Chicago–my hometown–and steal that name to draw away customers who think they’re going to our store, you got another thing coming.”
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What makes the squabble so intriguing is the contrast between the two Sams. Sam Rosen, Fred’s father, was a Jewish immigrant from Ukraine. He opened his first liquor store on the west side in the 1940s. In 1960, when Fred was in the Army, Sam moved the store to a larger building at the corner of North and Halsted. There it prospered, along with the surrounding Lincoln Park neighborhood. Sam died in 1979, and five years later Fred moved the business to an even larger abandoned warehouse just down the street. It’s been there ever since.
Walton devised a new strategy for distributing goods, Hayes explained: “Eighty-five percent of the merchandise Wal-Mart sells is shipped from its distribution centers, compared with 50 percent at its biggest competitor in discounting, K mart, which relies on suppliers to ship the rest of its merchandise.”
But isn’t that good? Doesn’t it mean that Rosen is benefiting from the chain’s advertising? “Not really. You have to ask yourself: How many more people are going to some Sam’s Club out in the suburbs thinking that they are me? They are reaping all the benefits that come from selling liquor under the name Sam’s, and they aren’t paying me a dime. They’re a huge company making even more money off of me. That’s not fair.”
Wal-Mart’s lawyers counter that Rosen doesn’t have an exclusive right to the name Sam’s. They argue that Wal-Mart also has a federal trademark: “Sam’s Wholesale Club.” And that they received their trademark before Rosen received his. In response to Rosen’s suit Wal-Mart’s lawyers argued, “Wal-Mart denies the implication that Wal-Mart needed permission from Sam’s Liquors to use the name and mark ‘Sam’s Club Members Only’ or ‘Sam’s Wholesale Club.’”
