Retail Kings

By: Jason Maoz

Published: January 25th, 2006

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They can’t quite take credit for inventing them, but Jews had a long, colorful, and mostly profitable involvement with the great retail emporiums – the large scale specialty and department stores that came, literally and figuratively, to dominate the landscape of 20^th century America.

The names, familiar yet formidable, have their own special cadence – an honor roll of some of the last century’s genuine commercial prodigies and merchant princes, German Jews almost every one of them, who changed the way America shopped:

Altman and Ohrbach and Bamberger and Klein. Filene and Magnin and Speigel and Saks. Sakowitz and Stern and Gimbel and Rich. Garfinkel and Godchaux and Goldwater and Gertz. Bergdoff and Goodman and Neiman and Marcus. Bloomingdale and Thalhimer and Lazarus and May.

Also (their identities not apparent from their stores’ marquees): Hubschman (Two Guys) and Himmelstein (Lane Bryant); Farkas (Alexander’s) and Ferkauf (E.J. Korvette); Rosenwald (Sears) and Straus (Macy’s).

As individual establishments they differed one from another in quality of merchandise and class of clientele (though usually with enough overlap to defy easy characterization), but most shared a certain grandness in concept and design, whether their proprietors limited themselves to ladies’ fashions or sold everything and the kitchen sink.

* * *

When a wandering 25-year-old peddler named Adam Gimbel opened a small trading post in Vincennes, Indiana in 1842, the world had yet to make the acquaintance of its first modern department store. By the beginning of the next decade, however, a shop in Paris called Bon Marche (French for “very cheap” or “real bargain”) was attracting attention with its impressive variety of goods and an array of retail practices – fixed prices, money back guarantees, etc. – that were innovative for their time.

Gimbel, who arrived in the U.S. from Bavaria in 1834, had no such revolutionary sales methods in mind when he opened his doors as one of the young country’s nearly 60,000 retailers. What he did have was an unimpeachable reputation for honesty. His motto, well known throughout the region, proclaimed: “Fairness and equality of all patrons, whether they be residents of the city, plainsmen, traders or Indians.”

The local Roman Catholic bishop, James de Long, was a close friend of Gimbel’s. An oft-told story that outlived both men told of how one morning the bishop entered the store and left a bag of gold on the counter. “I haven’t counted it,” he told Gimbel. “You count it and credit me with whatever amount you find it to be.” Addressing a crowd of astonished onlookers the bishop added, “Why should I bother to count money given to Adam Gimbel?”

Gimbel and his wife had fourteen children, eleven of whom survived into adulthood. Later in his life Gimbel would attribute his success to his progeny. “Others may have had their paid helpers and assistants,” he said. “I had my seven sons.”

After opening a store in Milwaukee in 1887 and another in Philadelphia in 1894 (Adam Gimbel died that year at age 77), the Gimbel brothers came to New York in 1910, setting up shop a block away from Macy’s on Herald Square,thereby birthing a near-mythic rivalry that would capture the public’s attention and hold it for the next seven decades.

In reality the rivalry was for the most part a friendly one, and the famous question “Does Macy’s tell Gimbel’s?” – originally a line in a stage routine of the comedian Eddie Cantor – was put to good use by both stores.

Equally famous was the long-running Gimbel’s slogan “Nobody but nobody undersells Gimbel’s.” Such was the power of advertising, even in a slower paced and less technologically advanced age, that Winston Churchill once asked an American visitor to London whether it was “really true that nobody, but nobody, undersells Gimbel’s?”

The golden era of the great department stores – the decades of seemingly limitless profit and unstoppable expansion, of laudatory articles in business magazines, of honors and awards bestowed by politicians eager to ingratiate themselves with men of money and success – would come to a crashing end beginning in the late 1970′s, one store after another falling victim to a deadly combination of factors: the rise of the shopping mall, evolving consumer preferences, and the economic malaise of the Carter years.

Gimbel’s (by this time no longer under family ownership) managed to hang on until 1986 when its parent company, BAT Industries of Great Britain, sold the store’s two Manhattan locations to real estate developers.

* * *

After starting men’s clothing stores in Richmond, Indianapolis and Washington, D.C., one-time newspaper delivery boy Andrew Saks, a Philadelphia native, arrived in New York in 1902 and opened a specialty store in the Herald Square area. Andrew died in 1912, leaving the business in the hands of his son, Horace, who set out to make the store even more upscale than it already was.

Stymied, for reasons both political and financial, in his attempts to move uptown, Horace agreed to a merger with his friend Bernard Gimbel, and in 1923 Gimbel Brothers, Inc. bought out Saks and Company, with Horace staying on as president of the newly named Saks Fifth Avenue. The store built on its tradition of servicing New York’s wealthier residents, and barely a year after the merger boasted close to 50,000 charge account customers, nearly all drawn from Manhattan’s upper crust. Branches soon sprouted in Palm Beach, Chicago, Miami Beach and Beverly Hills, with more to follow in the ensuing decades.

In her 1978 book on department stores (titled, simply enough, Store), Nan Tillson Birmingham reproduced an exchange of letters in late 1967 between a New Yorker named Harry J. Beethoven and then-Saks Fifth Avenue president Adam L. Gimbel. Addressing the “Complaint Department,” Beethoven noted that the camel-hair robe his wife had purchased for him in 1926 had “become somewhat frayed and worn on the sleeves and collar” and that since “your salesman said that a robe of this kind would last 50 years,” the garment, by Beethoven’s reckoning, had another “9 years to go in accordance” with the verbal guarantee.

Rather than a bloodless letter from a low-level clerk in Complaints, Beethoven received a response from President Gimbel himself which read, in part: “We regret that the wearing of the robe did not live up to your expectations, and since it shows signs of wear after only forty-one years, we beg to have the privilege of making the repairs without charge to you.”

A delighted Beethoven wrote back:

As you may have gathered, my sending back the robe was certainly not in the nature of an ordinary complaint, but to bring to your attention that a garment which you sold 41 years ago was still in use and was as much admired now as it was when first purchased in 1926.
I thank you for your genial reply and your generous offer to make the repair without charge, but it would be my pleasure to pay any charge you chose to make.
I shall contact your custom department and get o with the repair of this handsome garment. I expect it to last another 50 years and it is quite likely that some time in A.D. 2017 some great-grandson of mine will write Saks Fifth referring to your letter of October 9, 1967.

Despite the years of success – and the store’s reputation for elegance, glamor and designer names – ownership of Saks Fifth Avenue has changed hands several times over the years.

* * *

What set Benjamin Altman apart from his fellow department store moguls was that he was a lifelong bachelor in an industry heavy on family dynasties. In 1865 he and his brother Morris opened a dry goods store on Manhattan’s Third Avenue, between Ninth and Tenth Streets.

By the 1880′s, B. Altman’s – minus Morris, who quit the business early on – had grown considerably and was housed in a magnificent six-story building, called the Palace of Trade, at Sixth Avenue and Nineteenth Street. Favored by well-to-do New Yorkers, the store made deliveries to customers by horse-drawn carriage, and Benjamin Altman kept stables in Saratoga Springs and the Hamptons just to facilitate quick service to his vacationing clientele.

Altman died in 1913 and a relative took over as the store’s president. With no heirs to inherit his estate – more than $50 million at the time of his death – Altman established a foundation in his name that over the years would distribute millions of dollars in charitable donations.

In addition to its quality merchandise and the philanthropy of its founder. B.Altman’s is remembered for a 1934 advertisement widely admired for its ingenuity and effectiveness. As author Robert Hendrickson tells it in The Grand Emporiums, the ad “simply picture[d] a $2.50 bouquet of flowers, the copy beneath reading: ‘We believe there are at least 500 MEN IN NEW YORK WHO LOVE THEIR WIVES…(and want to give them flowers for Easter)…’ In about three hours after the ad appeared the entire 500 bouquets the store placed on sale were gone.”

Notwithstanding years of popularity and profitability, B. Altman’s suffered a fate similar to that of many of its competitors. The store was bought by a foreign investor in 1987 and closed two years later.

* * *

The story, purely apocryphal but perfectly symbolic of the store’s carefully cultivated image, goes something like this: Sometime back in the 1980′s, New York Post publisher Rupert Murdoch asked Bloomingdale’s chairman Marvin Traub why his store refused to advertise in the Post. “Well, Rupert,” Traub is supposed to have replied, “your readers are our shoplifters.”

The truth is that Bloomingdale’sdid advertise in the Post, but the story resonates because the store had become thoroughly identified with young, successful, status-obsessed, image-conscious Manhattanites. It was not always so.

Founded in 1872 by brothers Lyman and Joseph Bloomigdale and located from the beginning on Third Avenue, first at 56^th Street and later three blocks up on 59^th, the store for most of its history was a quintessentially middle-class shop. When the Third Avenue elevated subway tracks came down in 1955 and the neighborhood began attracting new, more upwardly mobile residents, Bloomingdale’s, then under the leadership of Lawrence Lachman and the aforementioned Marvin Traub, seized the opportunity to retool the store’s stodgy persona.

The makeover was complete by the mid-1960′s and “Bloomie’s,” as customers took to calling it, was widely considered the hippest retail outlet on the East Coast. That status was cemented in 1976 courtesy of CBS’s “60 Minutes,” when the normally jaded correspondent Morley Safer offered a glowing tribute, proclaiming it “probably the most successful store in the country” and noting that some shoppers actually compared an outing at Bloomingdale’s to one at a museum or opea.

But not even Blomingdale’s, which by the late 1980′s had 17 branch locations, would emerge unscathed from the Decade That Ate Department Stores: its parent company, Federated Department Stores (FDS), went bankrupt in 1990 following a hostile takeover. The company survived and now counts Macy’s as well as Bloomingdale’s among its holdings.

* * *

Founded in 1858 by Rowland Hussey Macy, a Quaker whose first four stores were all failures, the original R.H. Macy & Co. was a tiny shop on Sixth Avenue near 14^th Street in Manhattan. The store grew rapidly, and by the early 1870′s was selling toys, candy, jewelry, hardware, and men’s furnishings.

In 1874 Macy agreed to lease space to L. Straus & Sons, a china and glassware store that had been operating downtown on Chambers Street. Lazarus Straus, an immigrant from Bavaria, had already established a sound reputation as a merchant in Georgia before moving with his family to New York in the aftermath of the Civil War.

The Strauses assumed full ownership of R.H. Macy & Co. in 1896 and proceeded to build one of the 20^th century’s retail powerhouses. Within a couple of decades Macy’s would be a name recognized throughout the U.S. and much of the Western world. The store, which the Strauses moved to Herald Square in 1902, became famous for its sheer size – billed as “the largest department store in the world,” it would grow even more in the years to come – and for the quality and variety of its merchandise.

Everyone came to shop at Macy’s, and everyone seemed to work there at one time or another: among the many future celebrities who clerked at Herald Square were Jimmy Walker, later to become one of New York’s more notorious mayors, as well as show-biz types Burgess Meredith, Garson Kanin and Carol Channing.

The store’s mystique took on a whole different dimension with the advent in 1924 of the Macy’s Thanksgiving Day Parade, which some eight decades later remains one of the nation’s most publicized and eagerly awaited annual events.

Like nearly all its competitors, Macy’s, which had become a public corporation back in 1922, experienced uncertain economic times in the late 1980′s and early 1990′s. Senior executives orchestrated a leveraged buyout of the store in 1986, but the resulting strain on day-to-day operations led to a bankruptcy filing in 1992. The store remained in business under court protection, and, as noted above, is now owned by Federated Department Stores.

A footnote to the Macy’s story: The Straus brothers in their time were among America’s most prominent citizens. Isidore was a member of Congress in the 1890′s. Nathan, who served as New York City parks commissioner and president of the New York Board of Health, was almost single-handedly responsible for making pasteurized milk the American norm. Oscar, who in his later years would be appointed U.S. ambassador to Turkey, was secretary of commerce and labor under President Theodore Roosevelt.

Isidore and his wife, Ida, were on board the Titanic when the doomed ship went down in 1912. Isidore insisted that others be saved before him. Ida, preferring death with her husband to life alone, refused to join the other women in their desperate scramble for the lifeboats. According to survivors, the Strauses were last seen sitting serenely in their deck chairs, holding hands as the ship disappeared under water.

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About the Author: Jason Maoz is the Senior Editor of The Jewish Press.

Retail Kings

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