Authors: Michael J. Lisicky
The merger between Batus and Marshall Field’s changed the retail landscape in Milwaukee. The Federal Trade Commission demanded that Batus reduce its holdings in Milwaukee. First, Batus sold the Kohl’s supermarket division to A&P. It also prepared to close two longtime Gimbels stores. The Mitchell Street store, formerly a Schuster’s dating from 1914, was the first to announce its closure. Once located in one of Milwaukee’s busiest shopping districts, the Mitchell Street Schuster’s was operating on only two of its five floors, and its front entrance had been closed for some time. Some viewed the store as a dumping ground for returns and rejects, but many residents in its immediate neighborhood depended on the store. The second store to close was the Capitol Court location. Also a former Schuster’s, Capitol Court was once the highest-grossing suburban store for the Milwaukee division. But the area had deteriorated, and so had the store’s sales. With over 216,000 square feet of space, the closing of the Capitol Court store helped satisfy the FTC’s anti-trust concerns.
Philadelphia chairman Stanley Abelson was responsible for making the fledgling Philadelphia stores profitable during his tenure in the late ’70s and early ’80s. Abelson had previously served as a longtime executive at Macy’s in New York, and he was able to bring some of his expertise with him to Philadelphia. Manager Bob Di Benedetto says, “Abelson made the Founder’s Day Sale special. He did it through television, radio and direct mail advertising.” In addition, Gimbels initiated One-Day Sales, Weekend Sales and Home Sales in the Philadelphia stores. Former manager Barbara Pizer admired Abelson’s ability to turn Gimbels around but wonders if Gimbels’ remaining customer base became trained to only shop on the sale days. “Gimbels was somewhat responsible for its own demise. The store became too promotional and it relied on frequent sales that shifted the business to the weekends,” says Pizer. The tactic was necessary, as many retailers in the Philadelphia area viewed Gimbels as prey and began to siphon away its customers.
Even as the Philadelphia stores were modestly successful, the New York stores were not. In March 1983, Batus made a fatal mistake by merging the profitable Philadelphia division with the unprofitable New York division. The two divisions were named Gimbels East, and about 190 upper-management employees in Philadelphia lost their jobs. Di Benedetto says, “Gimbels East was difficult. Abelson converted Gimbels [Philadelphia] into a profitable store, and Batus thought that could happen in New York. New York never made a profit. When the merger happened, we realized in Philadelphia that we lost.”
Some of Gimbels’ best talent left the store even before the merger occurred. They saw the writing on the wall and realized the battle was going to be forever uphill. Former training director Roseann Rubinstein says, “When I left, it was not looking good. I realized that I had to get out now.” She adds that Gimbels was losing its direction. “We tried to have something for everyone, but maybe we presented a confusing image.” Stanley Abelson is reluctant to speak about his time at Gimbels but feels that its store in Center City suffered the brunt of the company’s struggles:
Department store business was spreading to the suburbs, and the meaning of downtown really changed. So did the customers. The population of customers on Market Street East were pretty much dependant on public transportation. That in a sense defined who your customer was, and that is the heart of what happened
But Abelson does fondly recall the time when each of the main stores in each of the cities had its individual personality and merchandising thrust.
In 1984, all was not perfect at the Gimbels warehouse in Pittsburgh. About 70 percent of the Pittsburgh division employees were union members. In March, 95 warehouse employees, members of Teamsters Local 636, were dismissed from their jobs when contract talks broke down. Members of Teamsters Local 249 accepted a lower pay scale and replaced them. For the next year and a half, the rejected warehouse workers picketed the downtown store. On October 23, 1985, Gimbels ran a full-page advertisement in the
that addressed the striking workers. Pittsburgh chairman Daniel Levy asked Pittsburghers not to be “misled by the Local 636 pickets. We are celebrating over 50 years of labor relations in Pittsburgh.” Levy mentioned that Gimbels had excellent relations with ten different unions in Pittsburgh and that the failed agreement with Local 636 was historically unique. He stressed that Gimbels was not anti-union and that any such assertion could not be further from the truth. Levy also stated that there must be better ways for Local 636 to serve its membership than attacking a company and putting 2,300 employees out of work. The advertisement did nothing to solve the impasse, and striking workers continued to picket the downtown Gimbels well through the 1985 Christmas season.
Although labor issues plagued the Pittsburgh warehouse workers, Gimbels store employees were fiercely loyal to their company. As the store went deeper and deeper into financial turmoil, Gimbelites hung together. John Caccese remembers working at the Moorestown Mall location and going out as a group every Friday or Saturday night after work. He says, “Maybe Gimbels was such a very special place because they had to try so hard.” One time during the 1980s, former manager Barbara Pizer recalls going to a pep rally at the Center City store for company executives. During the pep rally, Gimbels presented a slide show featuring all the executives with their families. Pizer remembers the store saying, “Families were more important than anything else.” Generations of family members worked at the Pittsburgh Gimbels store. Many employees had fun working together for the store’s special events, such as the Night Sales and the Warehouse Sales.
Peter D’Ambrosio thinks back at his time at the Gimbels in Bay Shore, Long Island. For D’Ambrosio, working at the store “was like a soap opera. Affairs, illnesses, after-work parties, you name it. It was a great time, and I wish I could do it all again.” He left about a year before the store’s demise but frequently returned to see his Gimbels family. “I was always there visiting, as I was friends with everybody,” says D’Ambrosio.
The downtown Milwaukee store shortly before its closing in 1986.
Collection of the author
The Milwaukee division, also known as Gimbels Midwest, shared the same sense of camaraderie among its workers. The employees were loyal and stayed with the company for years. “There were employees that just didn’t leave,” says director Michael Hammack. “There were many people that said, ‘I just started for the Christmas season but I never left.’” Another Gimbels Milwaukee executive, Cary Silverstein, recalls a story involving one specific former employee: “I remember one ninety-year-old woman who started as a wrapper when she was thirteen and ended up working for Gimbels for over sixty years. On her last day, they picked her up in a limo and drove her to work. She did not want to leave at the end of the day. Her associates were her family.”
article said, “Gimbels and Kohl’s are household words in the area’s retail community, and their customers trust them like family. That’s an asset that doesn’t always show up in a balance sheet.”
We always heard the rumors about closing, but we just felt that it was nothing but rumors
—Barbara Pizer, former King of Prussia manager
Maybe the 1985 Gimbels Philadelphia Thanksgiving Day Parade was a harbinger of what lay ahead for the company in 1986. Heavy rain and wind brought the televised festivities to a halt, and Santa never made his way to the store. But maybe that didn’t matter. Only 70,000 people were expected to turn out for the parade, down from its all-time high of 500,000 in the 1940s. And in recent years, Santa had stopped climbing the ladder to the roof of the store at the parade’s conclusion. Instead, he just walked into the store and left through a rear exit door.
Most retail stores experienced a lackluster 1985 Christmas selling season. Fewer customers and fewer shopping days only exacerbated the situation. Many large retailers were able to post a modest increase in sales over 1984 because of a strong last-minute rush from shoppers. The
New York Times
described the shopping scene in Manhattan just prior to Christmas Day:
Macy’s customers thronged the main floor
[at Herald Square]
forming lines at registers, but many customers seemed just as interested in full-price counters. But Gimbels
[at Greeley Square]
was lightly attended, despite a “One Day Sale.” The store went perhaps further than most, offering one-half off the lowest ticketed price
A few months later,
New York Times
retail columnist Isadore Barmash reported, “For more than 140 years, Gimbel Brothers has been one of the endearing names in American retailing, and for more than half that time its grey, hulking structure in New York’s Herald Square has been its best-known public face. But when one of the store’s brass nameplates was whipped off by wind last year and never replaced, that may have been prescient.”
On June 13, 1986, Batus announced that its Gimbels stores were up for sale, in addition to its Frederick & Nelson, Crescent and Kohl’s stores. In a prepared statement, a Batus executive stated, “We feel a number of our retail businesses are not positioned in keeping with our long-term objectives.” Batus said it hoped to sell each of the businesses as ongoing concerns. But very few parties expressed interest. Gimbels’ real estate holdings drew attention; its retail operations did not.
It was a difficult time for American department stores. The industry endured merger after merger, and the role of the middle-class department store became irrelevant and obsolete. Gimbels was the poster child for department store troubles, with its “hodge-podge of old and new, small and large, city and suburban stores.” An article in the
accurately details the state of the department store industry:
Department stores are getting shot at from all sides by specialty stores, off-price chains, discounters and catalogue merchants. Wounded badly, the big stores are losing shoppers faster than they would like to admit. At the same time, department stores are locked in a vicious battle with each other, as they reach for the same shoppers by selling essentially the same merchandise in the same types of stores
Other department store chains that experienced ownership changes or mergers in 1986 included Macy’s, John Wanamaker, B. Altman, Steinbach, Joseph Horne, the May Department Stores Company, Associated Dry Goods and Allied Stores. Even the once-popular Ohrbach’s chain, with locations on Thirty-fourth Street and the New York and Los Angeles suburbs, closed its doors in 1986. But until Batus made a future announcement, it was business as usual as Gimbels.
One didn’t have to go far to learn the true extent of Gimbels’ financial troubles. Report after report detailed the struggles in each of the divisions. In 1985, the Pittsburgh stores lost $2 million. Gimbels had failed to adequately position itself in a city that had transformed itself from a steelworkers’ town to a city of technology leadership. Retailers gauge their success by assessing their dollars earned per square foot of selling space. In 1986, while the national average was $100 per square foot, the downtown and Eastland stores in Pittsburgh produced only $43 per square foot. The strongest Pittsburgh Gimbels store was in South Hills at $137, followed by Monroeville at $124. At Gimbels East, the Yonkers store enjoyed $179 per square foot in sales. But the Gallery in Center City produced only $69 per square foot, and the highest suburban sales in Philadelphia were at Granite Run, which brought in only a modest $99 per foot.
The Milwaukee stores produced the strongest numbers. Even though the large Grand Avenue store generated only $60 per square foot, Gimbels Mayfair enjoyed $157 per foot and Northridge showed $147. Part of Milwaukee’s success was attributed to the division’s CARE program—Customers Are Really Everything. The program stressed customer service that helped to combine human resource training with an employee reward system. Training director Barbara Markoff was in charge of the CARE initiative. Markoff says, “It was a very positive program. You would see the sales associates arranging merchandise. One year later, we saw incredible results from the process.”
Former Center City Philadelphia store manager Bob Di Benedetto remembers, “Batus executives were making frequent tours of the Gimbel stores. Batus always kept asking how they could help the stores. But they were just finding a way to close the stores. They didn’t want someone else to find a way to make Gimbels work.” Di Benedetto continues, “I had to ask reporters, with their cameras, to stop coming to the store. I asked them if they knew what anxiety it was creating for the employees, especially the older ones. The reporters just said that they were doing their job.”