Woodward. Eaton. Duthie. Cohen. These were the titans of Vancouver's retail trade. In a retail climate that increasingly resembles a Gotterdammerung, Woodwards and Eaton's have been toppled by the harsh and unforgiving consumer of the '90s. The Cohen empire, the Army & Navy Department Stores Ltd., which operates eight discount department stores across western Canada, is the last one standing. As the privately owned company fights fiercely to survive, many point to its owner, 46-year-old Jacqui Cohen, as its greatest asset. Ms. Cohen herself acknowledges the odds against her. "They always say 'rags to rags in three generations'—first makes it, second holds it, third blows it," she admits. "I want to beat those odds."

Samuel Cohen, Jacqui's grandfather, founded Army & Navy 80 years ago. He opened his first store on Vancouver's Hastings Street with some war surplus goods and $10,000 worth of merchandise he had purchased from a business in Kamloops that was closing its doors. In the lobby of A&N's central buying office hangs a gas mask, the first item ever purchased for resale in the store. From this humble beginning in 1919, the company added both a store and a catalogue operation in Regina.

"Sam very early discovered that there was a hunger for discount merchandise, for low-price merchandise," says Kay Alsop, who, at Jacqui Cohen's request, is writing a book on the history of the family and the company. "So he, in a sense, cashed in on that." His vision resonated with Depression-era consumers who shared his "value for a dollar" outlook. During his lifetime, he established six stores across western Canada. (The company now has eight: in New Westminster, Edmonton (two), Calgary, Saskatoon, Regina and Moose Jaw, in addition to the Vancouver flagship.)

Samuel's son, Jacob (Jack) Cohen, suffered from multiple sclerosis. "Sam decided that [Jack] just was not going to be capable of heading up the company when he died," says Ms. Alsop. "Sam's hope was that his grandson Jeffrey would be able to take over, but that didn't work out either." Samuel put 40% of his shares in the company in trust for Jack in the late 1950s; when he died in 1966 he left 40% of the remaining shares to Jeffrey and 10% each to Jacqui and her sister Karen.

Jeffrey was named company vice-president in 1973, at age 21. Jeffrey had battled drug addiction since he was 15 and died of a heroin overdose in 1978. Four years later, Karen died in a car accident, and her Army & Navy shares, like Jeffrey's, reverted to the trust Sam had established for Jack. Ninety percent of the shares of Sam Cohen's company was now managed by trustees; only Jacqui's 10% was still held outright in family hands. "When my brother passed away, I remember my father saying, 'That's the end of the Cohen name,'" Jacqui Cohen recalls. "And that stuck with me. I think that's why I'm so Cohen. I'm it."

The responsibility of carrying on Sam Cohen's business now rested on president and chief executive officer Garth Kennedy. He had begun his rise through the company's ranks as a stockboy in the Regina store. "My personal feeling is that had it not been for Garth, the company might not have survived," says Ms. Alsop. "He took a great deal of care in seeing that the company was carried on the way he understood Sam wanted it to be carried on."

After her father's death in 1995, the trust was wound up, and Jacqui Cohen became the majority shareholder. She was best known to Vancouverites as a glamorous socialite, whose beaming face appeared often in the gossip columns, but after Mr. Kennedy's death last year she decided to take a more active role, becoming president and CEO. She has overseen a major repositioning campaign that covers everything from stock displays to advertising and logo changes. Most important, she has relaunched the Vancouver store as her "Gastown" location, with a main entrance and address on Cordova Street instead of the old, more down-market Hastings Street address. She even spoke enthusiastically of wanting to turn Army & Navy into "Vancouver's Harrods," a statement interpreted by some as a move to make the store more upscale. "That was taken a little out of context," she says. "I think what I meant about Harrods was that it's a destination. People think London: Harrods. I didn't mean necessarily merchandise-wise or price-wise. Just the fact that it's an institution. I want Army & Navy to be an institution—it is an institution."

She is adamant that neither the Harrods inspiration nor the new marketing campaign heralds an abandonment of Army & Navy's commitment to discount pricing. "We would never abandon, or lose sight of, who our main customers are," she insists. "We're discount and we'll always be discount. At Army & Navy, we sell for less. What happened in relaunching the company is that 'department stores' have obviously become dinosaur words. Look at Woodwards. Look at Eaton's. So we have to stand on our new slogan: 'You won't believe what's in store.' When you walk in, you just don't know if you're going to find Calvin Klein or the candles you just saw on Robson Street where they're $20, for $3 at Army & Navy. We have it all: candles, menswear, fishing, groceries. And for less money generally."

She glories in Army & Navy's eclectic mix of customers. Among the shoppers at the Vancouver store's recent "Party with an 80-year-old" sale were German tourists who wandered in on the way from Gastown to Chinatown to buy sweatshirts and souvenirs. An elderly British gentleman shopped for toothpaste. "There's a whole bunch of stuff and it's good quality at good prices," agreed two young teenage girls who bought school supplies. "You get binders at Shoppers Drug Mart for $3 and they're $1 here." A young boomer couple walked out of the store laden with Army & Navy shopping bags laughing about their "A & N adventure" and drove off in a brand-new minivan. "And Welfare Wednesday is still a huge day every month," says Ms. Cohen. "This area even down the line in 10 years will be a mixed bag. It will be the yuppies and it'll be the welfare people. I don't believe you can be everything to everybody but we will hopefully be able to include the welfare people and starving students and single families."

"We walked into the store when we first got the business, and there were all sorts of things in there you would never expect," says Peter Lanyon of Lanyon Phillips Communications, the advertising firm responsible for the new marketing campaign. "We were finding Eddie Bauer pants and a whole sporting goods department. They have the biggest fishing department in any store here in B.C. It was kind of an Aladdin's cave of bargain gems." This was the key to promoting Army & Navy and the inspiration for the new slogan that replaced "Canada's original discount store." He recalls revisiting the Vancouver store the day of the relaunch. "It was jammed. There were all sorts of new customers that the advertising campaign had obviously brought in, because these were not the people that had been in the store before. And I knew we had made it when I was shopping later in the day up in Capers [in Kitsilano] and I saw someone carrying an Army & Navy bag."

Mr. Lanyon credits Ms. Cohen for much of the success of A&N's "rebranding." "She's a very charismatic, highly energized person," he says. "She's a great personality and a lot of her personality infuses the store. When she's not there, you get Jacqui withdrawal." Vancouver store manager Dave Wright agrees that her vision and her personal style have re-energized the company. "Initially, Jacqui would ask questions about the day-to-day type of operations that then would prompt us to question ourselves and how and why we did things," he says. "It's made us better and more efficient because we haven't continued with 'That's the way Army & Navy does it.' She's got a vision and a desire to make things happen."

Marketing consultant and close friend Glenn McPherson suggests that Ms. Cohen's involvement in Army & Navy is a labour of love. "It's a real stimulant for her," he says. "She likes being on the phone finding out how many sales are going on in Regina, what's happening with the paint job in this store. She gets people all whipped up. And they all get excited about her vision."

But vision can only take a company so far. Army & Navy is privately held, so it is unknown whether it makes a profit, but Ms. Cohen admits her company had annual retail sales of over $100 million in the 1980s, but sales have fallen to around $55 million. And her ascension to power has been troubled. Joe Calvano, dismissed by Ms. Cohen as president, filed a wrongful dismissal suit, claiming she had baselessly accused him of untrustworthiness and theft. The suit was settled, but now Mr. Calvano has sued again, claiming that in a recent interview with BC Business magazine, Ms. Cohen violated the settlement's confidentiality clause.

Simon Fraser University economics and marketing professor Lindsay Meredith argues that Ms. Cohen faces huge obstacles in her fight to keep her family legacy alive. "We have record-high personal income tax in this province—historically, higher than ever," she says. "We have record-high personal debt. We have real wages which are stagnant. And we're suddenly confronted with the beginnings of the ugly 'i-word,' inflation. All of that takes money out of people's pockets. The most price-sensitive animal out there you've ever seen is called the British Columbian middle-class taxpayer."

Prof. Meredith concedes that the current economic climate might work in her favour. "She's got to make sure she advertises and hits hard on that," he asserts. "She's got to get people to walk back into that store the way they used to before Wal-Mart came along. Army & Navy held that ground before anybody else did. All of those things that hurt Eaton's and killed Woodwards and mortally wounded The Bay are all the kinds of things that still work in her favour."

"The victim in the Eaton's case was a totally different kind of citizen than the Army & Navy," according to Prof. Meredith. "Eaton's was one you could have seen coming. It's like the well-heeled tourist walking down the wrong side of town late at night in a rough, tough city. You just know something bad's gonna happen. Army & Navy is more like the rough, tough kid who came from the wrong side of the tracks, knows the turf pretty well, knows how to fight and knows how to hold on to market share."

"One of the things that always remains constant in retailing in the '90s is giving the consumer value," says marketing analyst Ian Thomas. "And the reason there have been so many casualties and there will continue to be casualties is that, from the customer's standpoint, the retailers are not providing value. Value is not necessarily just the lowest price. Value is a basket of selection, quality, service and everyday low pricing. The stores that are winning in the '90s are providing all of those key variables."

"Army & Navy were the leaders for many, many years and then they sort of fell by the wayside a bit," observes veteran retailer Murray Goldman. "Retail—it ain't what it used to be," he muses. (Mr. Goldman's own Murray Goldman Menswear stores closed this year.) "Today you have to be on top of it. You have to create your own image for your store and you have to go with it. You can't change the image down the road. You can't confuse the public. You have to stay on top of your product. You have to be with the times. You have to be open all the time. And if all else fails, you've got to do a little praying."

"The problem is a lot bigger than any kind of retailing angle," argues SFU marketing professor Judy Zaichkowsky. "All the best marketing in the world isn't going to help you when you're in the middle of the problem she's in. I think it's a location problem. People still know where the store is. That's the problem; it's nothing that she's doing in terms of merchandising. It's just the kind of customer base that's hanging around there, a huge population of drug addicts and people living on the fringe. I think they should take over the Eaton's location."

That is one option Jacqui Cohen flatly refuses to consider. "I believe in this area—it's like my backyard," she declares. "People say, 'I'm afraid to go down there.' I've never been attacked, abused. I drive down here at night, and I look at Pigeon Park and I think, 'This is not bad.' I lived in Chicago, and I lived in Los Angeles for many years, and if you turned right instead of left, you were risking your life. Generally, it's not that bad an area. There are panhandlers here and there are panhandlers outside The Bay."

Her commitment to the neighbourhood was one of the things that inspired her other passion, the Face the World Foundation she co-founded in 1991. It raises money by throwing annual gala dinners at her home, and the proceeds go to groups that help battered women, abused children, the hungry and the homeless. "I do appreciate what I have been lucky enough to have," she says. "There's a recipient of ours across the way here called Food for Thought. They were scrambling from day to day and we bought them a van. They're in touch with us all the time about what a difference we've made in people's lives. Right now, I've got a letter here: 'Dear Jacqui, could you give us some paint?' And it's my pleasure. It's easy."

Mr. McPherson, Face the World's co-founder, notes that most of the applications they get are from small groups looking for modest contributions. "It's still very much a $500, a $3,500 thing," he says. "And it takes a while to give out $400,000 when you're looking at small donations."

"It's a lot like Army & Navy in the respect that it's in my blood, it's a passion," says Ms. Cohen. "I believe in sticking to what you know. I've been in the business 30 years. Even before that, it was conversation at grandpa's house for dinner. I would love to see Army & Navy flourish. We're not going to take over the Canadian retail industry but you know what? I'm content with my little niche."

"There's no reason why she can't succeed," says Mr. Goldman. "And will succeed. I believe that because I know her." Prof. Meredith agrees. "This has been the shake-out of the century," he says of the current retail chaos. "Hats off to Jacqui Cohen. She's still kicking and breathing. A lot of other folks 50 times her size aren't. I've got to respect somebody like that. Do I think she's going to make it? Push come to shove, yeah, I do." BCR

BC Report is available at your favorite newsstand,
or save up to 43% with a subscription