Sam Walton Lost His First Store. Then He Built Walmart.

On September 1, 1945, a 27-year-old former Army captain took over a variety store on Front Street in Newport, Arkansas. It was a small cotton town in the Mississippi Delta, and the store was a franchise of the Ben Franklin chain. It was not doing well. The previous owner had sold about $72,000 of goods a year.

Sam Walton had $5,000 saved from his time in the Army. His father-in-law, Leland Robson, a prosperous lawyer and rancher, lent him $20,000 more. That was the $25,000 that bought his first store.

Five years later he lost it, because of a sentence that was not in the lease.

Learning in Newport

Walton had worked briefly as a management trainee at J.C. Penney, but he had never run a store. He learned by doing, and by watching the competition. Across the street was a better-established store, the Sterling, and Walton spent a lot of time in it.

His methods were simple and relentless. He drove across the state line to buy goods cheaply from wholesalers instead of paying the franchise’s prices. He cut prices and found that he sold so much more that he made more money overall, a lesson he later said shaped everything he did. He stayed open late, put an ice-cream machine on the sidewalk and kept the shelves full.

The sales came. In his first year the store sold $105,000 of goods. The next year it sold $140,000, then $175,000. By the fifth year it was selling about $250,000 a year and making a profit of $30,000 to $40,000. It had become the leading Ben Franklin store in its six-state region and the biggest variety store in Arkansas. When an old Kroger site came free down the street, Walton took the lease and opened a small department store, the Eagle, so that his competitor could not have it.

The sentence that wasn’t there

There were two problems with the lease Walton signed in 1945, and he had not noticed either. The rent was 5% of sales, very high for the business, which meant that the landlord shared in every bit of Walton’s success. And there was no clause giving him the option to renew after five years.

The landlord was P. K. Holmes, whose family owned a department store in town. Holmes watched the Ben Franklin become the most successful store in Newport. When the lease ran out in 1950, he refused to renew it. He wanted the store and the franchise for his son.

Walton had no right to stay, and there was nowhere else in town for him to go. Holmes bought the store’s stock and fixtures for $50,000, which Walton later called a fair price. The business he had built in five years was gone. He was 32, with a wife, four young children and $50,000.

Starting again in Bentonville

The Waltons looked for a new town and chose Bentonville, then a sleepy place of about 3,000 people in the far northwest of Arkansas. Helen Walton wanted to live in a small town, and Bentonville was close to good quail hunting, which Sam loved. He bought a small, run-down variety store on the town square and the building next to it, knocked them together and made one store.

It was still a Ben Franklin franchise, but he called it Walton’s 5&10. It opened on May 9, 1950, with a remodeling sale. This time Walton read his lease carefully.

From one store to sixteen

Bentonville became a base. Over the next decade Walton and his brother, Bud, opened or bought more variety stores across Arkansas, Missouri and Kansas. He flew between them in a secondhand two-seater plane to save time. By 1962 the brothers owned 16 stores, 15 of them Ben Franklins.

Walton could see where the business was going. Big discount stores, selling a huge range of goods at low prices, were spreading across America. But they were being built in big cities. Walton believed they could work in small towns too, if the prices were low enough. The Ben Franklin company was not interested. So he did it himself.

On July 2, 1962, the first Wal-Mart Discount City opened at 719 West Walnut Street in Rogers, Arkansas. Walton was 44.

The empire

The company went public in 1970 and used the money to grow. It built its own warehouses and trucking fleet, and later invested heavily in computers and satellite links to track what sold. In October 1985 Forbes named Walton the richest man in America, worth an estimated $2.8 billion. He still drove an old pickup truck to work.

In March 1992 President George H. W. Bush presented him with the Presidential Medal of Freedom. Walton died on April 5, 1992. Walmart became the largest retailer in the world. For the fiscal year that ended on January 31, 2026, it reported total revenue of $713.2 billion. That is more than $20,000 every second, close to the price of his first store.

What the record shows

• The small print matters. A missing renewal clause cost Walton the business he built.
• Success can invite trouble. The landlord wanted the store only because Walton had made it profitable.
• What you learn can’t be taken away. Walton lost the store but kept the lessons and the $50,000.
• Low prices can mean more profit. Walton discovered in Newport that selling more at lower prices paid better than selling less at high ones.

Losing everything once was also the start for Henry Ford, who failed twice before Ford Motor Company. For another retailer who learned from a defeat, read how Trader Joe’s began. And for another founder who built an empire after his first business slipped away, see Colonel Sanders.