Gimbels Has It! (16 page)

A 1968 rendition of the short-lived Harrisburg, Pennsylvania branch. The mall also featured a John Wanamaker store.
Courtesy of the Temple University Libraries, Urban Archives, Philadelphia, Pennsylvania
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Some of Gimbels’ most successful branch stores were in Wisconsin. In suburban Milwaukee, a Gimbels was located in Southridge, the largest shopping center in the state. Opened in September 1970, the Southridge Gimbels drew customers away from its original branch store at Southgate. The company continued to expand throughout Wisconsin by opening a second store in Madison and a branch in far-flung Appleton. In August 1972, the Northridge Mall Gimbels opened. The Northridge branch billed itself as the “NOW store” that also featured “tried and true favorites.”

The Milwaukee division of Gimbels flourished. Former director Barbara Markoff says, “Gimbels was successful because it served Wisconsin. When you have a state dominance, that’s one big piece of it.” And director Michael Hammack says, “The store had its own buyers, and they merchandised for the Milwaukee market. People in Milwaukee are different.”

Even with the success of the Milwaukee stores, Gimbels faced large struggles as a corporation. Its Saks Fifth Avenue stores suffered economic slowdown as luxury spending dwindled in the early ’70s. However, in 1972, Saks Fifth Avenue was back on track and contributed 52 percent of the company’s profits.

A life-sized Billie the Brownie rides a float in the 1970 Milwaukee Christmas Parade.
Courtesy of the Milwaukee County Historical Society
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The Milwaukee Visual Merchandising Team works on a Billie the Brownie puppet for the store’s Christmas windows.
Courtesy of the Milwaukee County Historical Society
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In 1971, Gimbels experienced dissension in the boardroom. The presidents of Gimbels New York and Saks Fifth Avenue resigned suddenly due to heated disagreements with Bruce Gimbel. After experiencing substantial dips in sales and profits and increased customer credit card debt, Chairman Bruce Gimbel said, “I’m not pleased with the record of the last two years. I’m doing everything I know to get us back.” But one analyst said, “Department stores take a long time to get into trouble and a lot longer to bring the situation around.”
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Although its Saks stores and its Milwaukee division generated revenue, many members of the Gimbel family chose not to reinvest profits into the stores. Overall, the company was vulnerable. The remaining Gimbel family members involved in the business faced the reality that they might lose managerial control after 131 years.

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RITISH
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My husband didn’t want to sell. It was a difficult time, a tension-filled time
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—Barbara Gimbel

Everything changed in 1973. In March, Laurence Tisch was elected to the Gimbel board. Tisch was the chairman of the Loews Corporation, a hotel and theater syndicate. Loews owned 20 percent of the Gimbels stock but, in June 1973, went one step further. Tisch initiated a takeover of Gimbels, offering sixteen dollars per share to increase its holdings to 51 percent. It was a showdown between Larry Tisch and Bruce Gimbel, and it didn’t end there.

One week after the offer, Brown & Williamson Tobacco, a unit of British American Tobacco, offered $23 per share for all remaining shares of Gimbel stock. Brown & Williamson, the largest tobacco company in the world, sold its cigarettes under brand names including Kool, Viceroy, Belair and Raleigh. The proposal was valued at over $200 million. British American Tobacco said it had been interested for quite some time in diversifying and had always intended to enter the retail market. The Saks Fifth Avenue stores made for a very attractive purchase, but the Gimbels department stores were suffering from a three-year sales slump and were deemed “troubled and mismanaged.”

British American Tobacco appealed to Gimbels. Many Gimbel family members had reacted unenthusiastically to the original Loews offer, hoping to entertain additional suitors. When a better offer came along one week after the Loews offer, the Gimbel family encouraged the sale of the stock.

It was a difficult time for Chairman Bruce Gimbel. He did not want to sell the company, and he initially urged stockholders and family members to hold onto their shares. Nonetheless, on September 26, 1973, the board of Gimbels officially agreed to the merger with British American Tobacco. After generations of family control, Gimbels no longer had a family member in charge. In a letter to Gimbel associates, Bruce Gimbel assured workers, “In my judgment, this provides many advantages and great opportunities to our entire staff and our company, and we support this merger with great enthusiasm. Let me emphasize again my personal enthusiasm for this merger.”
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Three special features of the downtown Pittsburgh store were featured in the 1972 corporate history booklet
It All Began with Adam…Collection of the author
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Gimbels moved forward with its expansion plans and opened a new branch at the Oxford Valley Mall in Bucks County, Pennsylvania. Oxford Valley was located near many working-class communities, including Levittown. The store, and the mall itself, never reached its expectations. Former manager John Caccese says, “Oxford Valley Mall overwhelmed the local community. It scared the life out of these people. It was more mall than was ever needed.” Manager Diane Curley Balenti always preferred her time at the Great Northeast store to her time at Oxford Valley. Balenti says, “Oxford Valley was in a mall and it was kind of a drag. It was not a serious store. I don’t know if it was the neighborhood but it was ho-hum. It didn’t have charm.”

The Granite Run Gimbels was designed to put Gimbels on the map in the Philadelphia market. Opened in fall 1974, Granite Run was designed to be the premier mall in the Delaware Valley. “Gimbels was changing its image, and they were testing the waters with Granite Run,” says Balenti. Andy Markopolous impeccably decorated the interior of the store. Markopolous was meticulous, and everything had to be just so. Balenti says, “His eyes were everywhere, and whenever I’d question a display, he would always cite ‘artistic license.’”
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However, the anticipated high-end clientele from Philadelphia’s western suburbs was far outnumbered by the residents of blue-collar Chester and Marcus Hook.

Gimbels had more of a customer following in Milwaukee and Pittsburgh than in New York and Philadelphia. Its stores on the East Coast were bigger in size, so accordingly their sales volume was superior. Yet Gimbels’ profits were greater in the other two cities. Director Cary Silverstein has fond memories of Gimbels’ role in Milwaukee. Silverstein recalls, “Milwaukee and Pittsburgh always competed for number one in the Gimbels group. They had good leadership and strong operations personnel. I was in charge of many of the operations area, and we competed like crazy for who was the best.”

Milwaukee was the only Gimbel market in which the company did not open a Saks Fifth Avenue branch. Instead, Gimbels offered an alternative. Director Barbara Markoff remembers the famous annual Saks Sale. “We would have our Saks Sale, where we would bring in merchandise from Saks and blow it out of the store. It was a real treat for our customers.”

In October 1972, the new owner of Gimbels, British American Tobacco, purchased the Kohl’s supermarkets and department stores in the Milwaukee area. Kohl’s began with a small grocery in Milwaukee’s Southside in 1928 and entered the department store field in 1962 with a store in Brookfield. Kohl’s grew quite slowly throughout the 1960s and “combined the quality merchandise of conventional department stores with the operation and prices of a discount store.” Although it didn’t directly compete with Gimbels and Boston Store, it kept them on their toes.

In the mid-1970s, Gimbels Pittsburgh reevaluated its place in the market. Gimbels was known as “a middle price store with good values and national brands.” The division decided to follow some aggressive marketing strategies, such as highly promoted One-Day Sales. Also, the division resolved to update its downtown store. The downtown Gimbels had a special place in many Pittsburghers’ hearts. Employee Kathy Weber says, “The downtown store was actually a mini city within the store, you never really needed to leave it.” It had a post office, optical department, restaurant, bakery, beauty salon and budget store.

The downtown Milwaukee store in the early 1970s.
Courtesy of the Milwaukee County Historical Society
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Gimbels was home to a popular candy department that featured the Annaclair. Annaclairs were a Pittsburgh phenomenon. A February 1982 article in the
Pittsburgh Press
stated, “Like chipped ham and pecan balls, the Devonshire sandwich and crab Hoelzel, Annaclairs are a Pittsburgh specialty.” Every year, 300,000 pounds of Annaclairs were made in the Pittsburgh store’s thirteenth-floor candy department. The Annaclair had a marshmallow fondant center that was dipped in chocolate and coated with pecans. Some shoppers made special trips to Gimbels for nothing else but this treat.

Gimbels also hosted import fairs that brought a sense of excitement to downtown. Director Kay Cushing Neuhausen remembers popular events such as Great, Great Britain and Chao Italia. “We brought in craftsmen from both countries. There probably wasn’t a big tradeoff, but it brought people into the store,” says Neuhausen. But she feels that Gimbels served another role in Pittsburgh. “Gimbels was not as high end, especially in ready to wear, as you would find at Kaufmann’s and Horne’s, but it did things with panache and style. Maybe you’ll get the look, but you won’t be paying the big bucks for it.”