Second-gen Success

President and CEO of ABC Stores Paul Kosasa keeps his father’s legacy alive.

Paul Kosasa was just 7 years old when his dad, Sidney Kosasa, launched the ABC Stores empire with the opening of a retail outlet on Waikiki Beach in 1964.

But as the grandson of a first-generation Japanese immigrant and of parents who courted and married at a Japanese internment camp in Northern California, it could hardly be said that he was born with a silver spoon in his mouth. Like his father and grandfather before him, Kosasa learned at an early age that the building blocks of success are hard work and the ability to look ahead.

“I think my parents believed that America rights its wrongs and that there was a wrong, but they didn’t hold it against the country,” the 57-year-old Kosasa said during a recent interview at his modest Kaka‘ako office.

“Once they got out of Tule Lake Internment Camp, they felt like they had the same opportunity as everyone else. Their bitterness of that era didn’t consume them or prevent them from seeking everything that America has to offer. A lot of great leaders came out of that generation—the great generation. Maybe they had to prove to themselves that they could be successful along with anyone else.”

To be sure, Kosasa’s parents, Sidney and Minnie, had barely left the uncertainty of WWII behind when they gambled on opening their first pharmacy/convenience store in Kaimuki. Within a decade, they had grown the store into four known as the Thrifty Drugs brand. Watching tourists shop at the large hotels during a chance business trip to Miami Beach, Fla. gave the elder Kosasa, respectfully known to employees as “Mr. K,” the inspiration to create his own line of resort retail stores, which he called the ABC Store, because it was easy to remember. The idea proved to be a stroke of genius that eventually overtook his other business concepts.

While “Mr. K” died in 2006, his legacy lives on in the wisdom that he passed to his son Paul, who describes the day in 1999 that he took over the reigns to the ABC Stores as one of the best of his life next to the birth of his own children, 23-year-old Lindsay and 21-year-old Ian with his wife Lisa.

“My dad was already 80, but he didn’t have to hand over the reigns, he was still really active so it was an amazing vote of confidence when he decided to turn over the job that he had been grooming me to do,” Paul Kosasa says. “I never said, ‘Hey, I’m ready… it was always his decision. I respected him for how he operated the company and I was always learning from him.’”

Kosasa was just nine when he got his start working at the family’s Thrifty Drugs stores.


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Paul Kosasa with son Ian (far left), wife Lisa and daughter Lindsay (photo courtesy Kosasa family)

“I’d work in the summers and during the school year, I would take the bus over from ‘Iolani. They used to pay me with model cars and planes,” he says. “My dad wanted me in the family business—the rest of my siblings were older and chose not to go into the business so that probably compelled my dad to lean a little harder on me. I liked the family business, but it wasn’t until after college that I began to envision making it my career.”

Kosasa says he studied engineering at the University of Michigan at Ann Arbor before realizing that what he really wanted to build was the family’s retail operation.

“I discovered engineering was a lot less enjoyable. I couldn’t see myself working on numbers behind my desk,” Kosasa says. “Because I worked in retail growing up in the family business, I was comfortable with it. and it was a lot more fun.”

After college, Kosasa signed on with Foods Co., a now defunct California supermarket chain.

“It was good to get experience working for someone else. It also sent a message that it takes hard work to make a family business succeed—so many of them consolidated back in the 1980s, and now they are gone,” he says.

Eventually, Kosasa returned to Hawai‘i, where his parents welcomed him back into the fold and gave him the chance to see firsthand how important it is for business leaders to cultivate a strong character, work ethic and sense of fairness and justice.

“They always says take care of the employees and they’ll take care of the company,” he says. “Today we’ve got a little over 1,000 employees in our ‘ohana. Most of them are full-time and we make sure that they have good benefits and the opportunity for advancement. They are the reason that we’ve succeeded.”

Kosasa even credits one employee, chief operating officer Willie Nishi, for a large portion of his personal success.

“My mentor besides my dad is Willie Nishi. He’s from Hilo, but he grew up in our family business rising from truck driver to our chief operating officer,” Kosasa says. “He taught me everything he knew and he was the one that counseled my dad about my eventual succession.”

While Kosasa says the job was the one that he was born to do, it wasn’t always easy.

“We made it through a series of downturns… the Iraq War, 9/11, the financial crash,” he says. “The managers took pay cuts and we had to cut employee hours, but we carried the benefits and we didn’t do any layoffs.”

Kosasa says through it all, his parents’ voices played in his head. From his dad, he learned to “play one shot at a time” and to “look ahead because you can’t change the past.” His mom, who is still a very active part of his life, preached fortitude.

“She’d always say, ‘You’ll have bad days. Sometimes you’ll feel sorry for yourself, but it’s important to man up and deal with it.'”

Kosasa, who has served as chairman of the philanthropic Hawaii Community Foundation for the last three years, says he learned generosity from both parents.

“They were always having the employees over to our home for meetings and giving back,” he says. “They taught me that happiness is the end game and that it’s caused by giving of yourself. Gratitude makes people happy.”

Hawaii Community Foundation CEO Kelvin Takata says the nonprofit honored the Kosasa family in 2013 as outstanding philanthropists of the year in recognition of their generosity and leadership in the community.

“Paul is a doer. Both in his leadership of ABC Stores and in his civic leadership, he is always someone you can count on to step up and take on challenges and get things done. A lot of people will talk about their intentions, Paul makes it happen,” he says. “The company is a legacy in which Paul takes great pride and leads with passion and sincerity. He is the embodiment of what ABC Stores have been for decades…an innovator, community leader and trusted employer.”

Kosasa credits the generosity of the community with helping propel his family’s business to the half-century mark. He doesn’t take for granted that this year ABC Stores, which now has 75 stores in Hawai’i, Nevada, Guam and Saipan, turns 50. The company is working on replacing the Waikiki business lost with the redevelopment motivated closure of four International Market Place stores and is looking to expand further into Kaua’i, with new stores opening in Kapa’a and Po’ipu in the next 24 months. And, while brick and mortar stores face challenges in the digital age, Kosasa envisions further growth.

“We’ll be opening more stores and they’ll morph into other types of businesses—I’m not sure if it will be retail,” Kosasa says. “I don’t master plan a strategy. It’s based on how society changes. Digital and mobile channels have grown; however, humans love interaction so that means they’ll always be a need for brick and mortar stores. Shopping and eating are an important component of socializing. We just have to change it up to keep it relevant.”

Interestingly enough, one of the ways Kosasa stays in touch with human cultural needs is through his love of contemporary music, which he says indirectly reveals how his younger generation of consumers think and believe.

“My dad is a creative type—he is a musician, an athlete, and an adventurer,” says his daughter Lindsay. “Over the past few years, as I’ve had the opportunity to move away from home and have adventures of my own, my dad has shared some wild stories from his youth. He is a go-getter and a risk taker, and his forward-thinking attitude keeps him going every day. Not many people can say that their dad stood in line at Studio 54 in New York next to Andy Warhol, or just this past January, excitedly go with his daughter to the Steve Aoki concert at the Blaisdell.”

While Kosasa says that he doesn’t have any regrets about picking up his father’s passion and making it his own, he’s not leaning yet on his own children to consider the company’s succession.

“I’m not worried about succession—that time probably won’t come for another decade. Really, I think I’ll be like my dad; I’ll keep working until I can’t. In conventional thinking, a job is work, but I love what I do. I think I’m right where I’m supposed to be…” Kosasa says. “It keeps me young. It keeps me happy.”

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