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Fascinating story in Fortune Small Business that profiles Stew Leonard and Stew Leonard’s -- the founder and the store -- and offers a look at the legal difficulties that engulfed Leonard back in the early nineties. While offering the usual portrait of the unique stores operated by the family – the animatronic figures, the people wearing cow outfits, the strong customer service orientation -- the piece also provides insight into the workings of Leonard’s mind both before and after he was convicted of tax fraud.

Among other observations, Leonard tells the magazine that in some ways, his conviction and incarceration allowed him to do what every founder of a business should do -- allow the next generation to lead. Though, “don’t for a minute think I’m trying to say it was a good thing,” he says. Leonard calls the tax evasion “stupid, stupid, stupid,” and the current CEO of the company, Stew Leonard Jr., says that “all that stuff with the IRS” was “humiliating, embarrassing – not just for me, for everyone working at the store.”

Remarkably, the business has exploded since the tax fraud conviction -- the company has three stores doing some $300 million a year, with plans (reported here on MNB) to open a fourth in spring 2004 on Long Island. And Fortune Small Business does a nice job of explaining how it all works.

One of the first experts to applaud Stew Leonard’s approach to business was Tom ”In Search Of Excellence” Peters. In an intriguing interview, Peters explains to the magazine why he feels betrayed by Stew Leonard. “There’s no question that Stew Leonard’s is a hell of a model for customer service,” he says, but “I thought in the deepest sense Stew Leonard’s was revealed as phony.”

Absorbing stuff.
KC's View:
We have more than a passing knowledge of the store, the company, and the family, having been a regular customer of Stew Leonard’s for almost 20 years. Our oldest son took his first trip there when he was two weeks old, and the weekly trips to Stew Leonard’s have been a tradition for our kids that we believe they’ll remember for the rest of their lives. (Conservatively, we figure that over the past two decades we’ve spent more than $100,000 at Stew Leonard’s…which seems like as good a reason as any for a retailer to develop a lasting and loyal relationship with a customer, especially one with kids.)

Were we disappointed in the man and the company when the charges hit a decade ago? Sure. Terribly so. But we never were disappointed in the store, in the experience of shopping there on a regular basis. Which is why we keep going back, week after week, no matter what warts became evident. Ultimately, perhaps what Stew Leonard built was greater than the man himself.

Tragedy occurs when people are undermined by their own weaknesses. That’s certainly the case here.

But we’ll tell you something else. We’ve had numerous conversations with Stew Leonard over the years, both before and after his legal troubles. And you’ll find few people in business with as relentless a curiosity, who ask questions as probing, and who are as utterly charming.

That’s how we’ll always think of him.