Worcester Business Journal

wbjournal.com | January 22, 2018 | Worcester Business Journal 15 E C O N O M I C D E V E L O P M E N T F O C U S a bar with 12 beers on tap. The bar is named after Anthony "Spag" Borgatti, the owner of the longtime Spag's store that once stood on the Lakeway Commons site. Market Basket's tumultuous history Market Basket has long been in cities like Fitchburg and Lowell, and it has opened stores in Athol, Hudson and Oxford. But the Shrewsbury location, which is not finalized, would be the company's first directly in the Worcester area. Even those who aren't regular Market Basket shoppers may still be familiar with its story, including when a fight for the company made national headlines in 2014. Athanasios and Efrosine Demoulas, husband-and-wife immigrants from Greece, ran the first store together in Lowell for decades until two of their sons – George and Telemachus, known as Mike – took over. It was under the brothers the market grew into much of what it is today. But it was George's early death in 1971 ulti- mately landing the company and the family in years of legal trouble. The two brothers and their families had decided years before to make each the executor of the other's estate upon that brother's death. But two decades later, George's sons, Evan and Arthur S. Demoulas, went through documents and were startled to discover the 50-50 split the two brothers and their families had in the company was now about 80-20. Their uncle had taken 80 percent of the company. That began a long legal battle between the two Arthurs – Arthur S. and Arthur T. Demoulas, now the beloved head of Market Basket – and their families. After more than a decade, a judge found that Mike Demoulas – Arthur T.'s father and a philanthropic leader in the Lowell area – had defraud- ed his late brother's heirs out of hun- dreds of millions of dollars they would have made in the meantime. Arthur S.'s side was also given a slight majority of the company, 50.5 percent. Thanks to a complicated turn of events – Evan's widow decided she would vote for Arthur T.'s side, tipping majority control to him – the company stayed much the same. That changed starting in 2013, when the widow, Rafaela Evans, changed her mind and began voting with her late husband's side after all. Arthur T. was fired the following year, spurring a summer-long uprising from Market Basket's employees, cus- tomers and vendors. Each part said they wouldn't work at, shop at or ship to Market Basket until Arthur T. was back in charge. In short order, the company was nearly taken under. More than 90 per- cent of sales disappeared, ultimately forcing Arthur S.'s side to sell to Arthur T. Without the customers, employees and vendors, the company appeared to be worth practically nothing except the stores and warehouses. A message was sent to the business world: Chasing quarterly growth num- bers and maximizing profit only works to a point. If Market Basket had been like any other corporation, it wouldn't have been a company that employees were willing to risk their livelihoods to save. Business experts had never seen workers demand a boss back, never mind the action actually working. "This is one of those things that's almost magic," said Francis Hoy, a busi- ness professor at Worcester Polytechnic Institute who closely followed the story. "If we could teach this in business courses, we could really see some mira- cles out there." Market Basket, which now has around 80 stores in Massachusetts, New Hampshire and Maine, manages to be as competitive on prices as Walmart, Hoy said. Walmart announced a plan this month to pay a $11 minimum wage but has never been known as a desir- able place to work. "Walmart and Market Basket culture, it's two different things," Hoy said. Market Basket is slated to anchor a new development at the former Edgemere Drive-In on Route 20 (above) just about 3 miles from where Whole Foods will open at Lakeway Commons. P H O T O S / G R A N T W E L K E R W

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