Life Without Wal-Mart

As the story goes, Sam Walton drove his pickup north on U.S. Highway 71 from Arkansas to Kansas City in 1974. He had plans to expand his new Wal-Mart chain into just about any town with a traffic light. What he needed was a pitchman.

Walton drove to the Plaza office of Bernstein-Rein, a small ad agency of about two dozen associates that had opened a decade earlier. Walton had chosen Bernstein-Rein for one reason: a simple ad he'd seen for the now-defunct Milgram Food Stores. It featured "Janie from Milgram's," who did nothing more in the commercial than list that week's deals. Walton knew that as his company went national, he wanted commercials that looked as if they'd been produced by a local store owner. When Walton arrived at Bernstein-Rein, he had one request: "I want Janie."

Agency co-founder Bob Bernstein wasn't immediately impressed by Walton. Bernstein, who's now 66, recalls telling Walton that actress Janie Fopeano wasn't for hire. "You can't have Janie. She's under contract."

After Walton got in his pickup and headed back to Bentonville, Arkansas, the first thing that Bernstein did was call his accountant. "Check this guy out," he said. "Find out if he's for real."

Wal-Mart had been in business for just 12 years, but in 1974, the retailer already had 72 stores and that year would report $350 million in sales. The business model was something entirely new: Walton was opening stores in rural America, places like Claremore, Oklahoma, and Sikeston, Missouri.

Bernstein had reason to be skeptical. His own father had been an entrepreneur who was always opening some kind of new store — and the businesses always failed.

But Bernstein was curious about Wal-Mart's operation, so he drove down to the headquarters in Bentonville. "I got there, and they had this office in a modular building," Bernstein recalls. "The receptionist sat at a folding table. There was a coffeepot in the corner with a sign that said ‘five cents.' I said, ‘This is a company with $350 million in sales?'"

It was clear early on that Bernstein-Rein and Wal-Mart had the same ideas about advertising. The agency specialized in the "real people genre" of commercials, perfect for the folksy ads that Walton wanted — ads that would help his chain appear smaller than it had become.

Bernstein found an actor named Dick Guthrie. Like Janie, Guthrie simply read that week's specials. The spots often showed him standing in the aisles of a store, wearing clothes that seemed to have been pulled right off the nearby racks. Guthrie had bushy, curly hair and a mustache that hung over his mouth. He had no accent, so he could have lived in any town. While Janie from Milgram's was under contract, the Wal-Mart ads sometimes featured her sister, Suzie Halgren of Des Moines. The ads concluded with an outside image of the warehouse-looking stores. The campaign ran for a decade.

Bernstein-Rein continued to oversee many of Wal-Mart's major ad campaigns as the chain grew from 75 stores to 3,800 today. The agency developed "Buy American" in the 1980s, and 10 years later devised the smiley face for TV spots and just about every Wal-Mart rack. Last year, Bernstein-Rein handled half of Wal-Mart's $578 million advertising account. That account helped Bernstein-Rein grow into the country's 36th-largest ad agency.

Even as Wal-Mart went national, Bernstein-Rein helped the chain produce commercials that made it appear to be a local store, such as the commercials below.

But Wal-Mart's global domination of the retail market has earned it widespread criticism. And Bernstein-Rein was implicated, accused of producing ads that lied for Wal-Mart. Throughout this 32-year partnership, Bernstein defended the honor of Sam Walton's company.

That loyalty didn't guarantee him Wal-Mart's business. In August, Wal-Mart ended its relationship with Bernstein-Rein and gave its business to a Chicago firm called Draft FCB.

The stakes couldn't have been higher for Bernstein. The Wal-Mart account made up half of the agency's $553 million in billings last year. At the same time, Bernstein had begun building the new $116 million West Edge development near the Plaza to house his ad agency, a hotel and retail space.

Bernstein-Rein claims that about 50 of its employees worked directly on the Wal-Mart account. Several of the agency's employees who spoke with the Pitch fear heavy layoffs.

This week, Bernstein-Rein is expected to announce a "rebranding" of the company, with a new logo and a new approach to advertising. The announcement is expected to include several new contracts, including video-game giant Ubisoft. More accounts are expected after the first of the year.

The new deals are major wins for Bernstein-Rein, but it's unclear whether they'll equal the Wal-Mart contract.

Still, several Bernstein-Rein employees who spoke to the Pitch were relieved to be finished representing one of the world's most reviled companies.

Bernstein, however, has taken the loss personally.

Bob Bernstein settles into a small booth at Winstead's on the Plaza. Bernstein spent weekends here when he went to Paseo High School, and now it's one of his lunchtime staples (along with Oklahoma Joe's and McCormick & Schmick's). He's wearing a red silk shirt, tan slacks and frameless glasses; his gray hair is combed back. Bernstein doesn't pick up a menu; he always orders the same thing.