Gimbels Has It! (3 page)

This ritual was Adam’s concrete way of preaching “the solid front,” family unity and the rewards coming from it.
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In October 1891, the Gimbel brothers decided to liquidate their stock in the original Vincennes store and sell the business to Charles Haughton and Frank M. Bond. One of the purchase agreements allowed Haughton & Bond to continue to use the Gimbel name on its store. In 1893, the very first business established solely by the Gimbel brothers, the Danville, Illinois store, was sold to their employee Ike Louis. Louis had always been promised this store “if they [the Gimbel brothers] made good elsewhere.”
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An early view of the downtown Milwaukee Gimbels. This photograph shows the famous river façade, which was completed in 1925. The exterior of the Milwaukee building was modeled after London’s Selfridge’s store.
Courtesy of the Milwaukee County Historical Society
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The railhead that the Gimbels had hoped for was ultimately built in Chicago rather than Milwaukee. Although Milwaukee had the stigma of living in Chicago’s shadow, it did not limit the success of Gimbel Brothers, and the company grew. Over the course of many decades, its building on Milwaukee’s Grand Avenue expanded to include six connected buildings. The first expansion was designed by the noted Chicago architect Daniel Burnham. Burnham has been credited with designing many commercial masterpieces, including Chicago’s Marshall Field and Philadelphia’s John Wanamaker department stores, New York’s Flatiron Building and Washington, D.C.’s Union Station. Before long, the Milwaukee Gimbel store grew to eight stories tall, with two thousand employees and 575,000 square feet. It wasn’t the only department store in Milwaukee, but it certainly was the biggest.

By 1893, the company wanted to expand to another city. Other Midwest cities such as Chicago and St. Louis already had plenty of established department stores. Soon the perfect opportunity for expansion was found in Philadelphia, the city that Adam and Fridolyn called home.

E
ASTWARD
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O

In a city long known for its history as a hub for manufacturing and commercial activity, Gimbels was Philadelphia’s retail epicenter for the better part of the twentieth century. More than just a retail giant, Gimbels was a part of everyday life for families across Philadelphia
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—Michael A. Nutter, mayor of Philadelphia
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In the 1890s, Philadelphia was no stranger to the department store concept. The city was home to John Wanamaker, the merchant pioneer who operated one of the world’s largest stores out of the former Pennsylvania Railroad Depot near city hall. Wanamaker, who opened his first store in 1861, is often credited as one of the first merchants to establish a one-price policy and satisfaction guarantee. Surprisingly, those two policies were already in force in Adam Gimbel’s Vincennes store back in 1842. Philadelphia was also home to the Strawbridge & Clothier department store. Justice Strawbridge and Isaac Clothier founded their business in 1868 and also take credit for operating a one-price store with a merchandise return policy.

The Panic of 1893 brought economic distress throughout the country. One victim was the Haines & Co. dry goods store at Ninth and Market Streets in Center City Philadelphia. In December 1893, Haines & Co., along with its wholesale partner, Wood, Brown & Co., made a desperate announcement—the company needed to sell $1 million worth of goods by January 1, 1894. The company advertised, “No inducement will be spared to make the clearance thoroughly complete.” Haines & Co. did not meet its sales goals, and the company faced total liquidation by March. The Gimbel family came forward.

On March 17, 1894, Gimbel Brothers announced the purchase of Haines & Co. for $1 million. The store immediately closed for four days as the Gimbels took control. On March 21, Haines & Co. reopened as Gimbel Brothers. Almost one thousand employees were hired to staff the new store. Gimbel Brothers advertised that its stock would be sold at sixty-two cents on the dollar and that money would be cheerfully refunded within three days if the customer was not satisfied.

That morning, women began to gather outside the new Gimbel Brothers store at Ninth and Market Streets. The store opened at 8:30 a.m. to enormous crowds. The
Philadelphia Record
reported, “Handsomely dressed women fought and scrambled to gain admittance to the store. Bonnets were crushed, clothing torn, and umbrellas were twisted into almost unrecognizable shapes.”
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The report continued, “Every woman enjoys a real bargain sale.” Shortly after the doors opened, the “massive building filled to suffocation.” It wasn’t long before one of the store’s large display windows on the Market Street side of the building shattered from the onslaught of customers. The newspaper reported that “no such crowd had ever gathered together in Philadelphia in one day,” and Gimbels ran an advertisement in the next day’s newspaper that stated, “Disappointed people must have a little patience.” It also noted that the delivery system was taxed and that “any small purchases you can carry yourselves will be of help to us.”

Strawbridge & Clothier was located across the street from the Gimbel Brothers store and took notice of Gimbels’ success. It was reported in later years, “When Gimbel Brothers, the new store up the street, advertised that it was ‘the handsomest store in town’ and had five acres for selling, the allocation of floorspace was significant. China, glassware, and silver received half an acre, housewares a third of an acre, as against a quarter-acre for dress goods.”
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Perhaps what set Gimbel Brothers apart from its competition in Philadelphia was its commitment to sell goods at the lowest price possible. With its two large stores, Philadelphia and Milwaukee, the company had strong buying clout, and it was possible to sell items at a lower cost than most stores. This policy helped shape the Gimbels selling strategy in Philadelphia and future markets. One Philadelphia Gimbel Brothers advertisement said, “There is practically no limit to the savings that modern retailing can make for you at all times. The price-making of every purchase ranks before everything but quality.”

In 1895, Gimbel Brothers made a bold statement as a good corporate citizen. As the effects from the Panic of 1893 lingered on, the company gave the United States government $100,000 in gold to address the concerns over a gold shortage. This action was intended to prove the company’s policy of “patriotism and community service, both of which were part of the Gimbel philosophy as individuals and retailers.”

The Ninth and Market Streets entrance to the Center City Gimbels.
Courtesy of the Milwaukee County Historical Society
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Although he was officially retired as the leader of the business, Adam Gimbel continued to check in on the stores in Philadelphia and Milwaukee. He usually appeared incognito to the store’s workers and customers. Once, Adam Gimbel struck up a conversation with two window shoppers outside the Milwaukee store. The conversation went: “Is this a good place to trade?” Adam asked. “Oh, yes,” said one woman. “You can always depend on Gimbels.” “Then I am satisfied,” Adam said as he entered the store.

On June 28, 1896, at the age of eighty-one, Adam Gimbel passed away in his Philadelphia home. The
New York Times
referred to Adam as “one of the best known merchants of the West.” Adam’s death was a chance for the family to reflect on the business and look toward the younger generations in the Gimbel family for future leadership.

In December 1902, Gimbel Brothers opened a “Pure Food Store” in its Philadelphia store. This was a revolutionary concept in the grocery business. The store only wanted to sell food that followed strict standards in sanitation. Gimbels advertised that “people should know to a certainty what foods are pure, what foods are wholesome and what foods the public ought to have to eat.” The advertisement continued: “Gimbel Brothers will sell pure strained honey with no dead bees, no sand in the sugar, naptha soap without the absence of naptha, no ‘diabetic flour’ that led to death, not to the preservation of life.”
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The store also discouraged the use of benzoates and other preservatives in its foods. These strict standards helped pave the way for the establishment of the United States Pure Food and Drug Act of 1906.

M
IRACLE ON
T
HIRTY
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THIRD
S
TREET

Gimbels was a wonderful store in which to shop, and you always had the feeling that the prices were a little under Macy’s
.

—Ed Koch, mayor of New York City, 1978–1989
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The Gimbel family members were not the only Philadelphia merchants who wanted to open a store in New York, America’s largest city. On September 29, 1896, famed Philadelphia merchant John Wanamaker took control of the former A.T. Stewart department store at Ninth and Broadway in New York. The Stewart store had failed partly because the store was not located in a retail district. Wanamaker idolized Stewart and decided to bring the store back to its former glory. (Alexander Turnery Stewart passed away just days before Wanamaker’s Grand Depot opened in Philadelphia in 1876.) Unfortunately, Wanamaker’s was unable to achieve notoriety and success in New York, a situation that lasted until the New York doors closed in December 1954.

By the turn of the century, New York’s main commercial district centered on Fourteenth Street and Union Square. Two of the most successful department store businesses were James A. Hearn & Son and the R.H. Macy & Co. store. Macy’s was a popular retail destination, and on April 19, 1901, the company announced that it was moving “uptown” to Herald Square. Before this announcement, the northern boundary for retail in the city had been Twenty-third Street. The Herald Square building, located at Thirty-fourth Street and Broadway, would be ten stories tall and have unprecedented square footage of selling space.

Macy’s moved its store one mile north to its new location. This was considered one of the largest commercial moves that ever occurred in the city. When the move was completed, Macy’s felt it would not have to move again “for many a moon.” One report said, “New York will have to grow upward and outward a great deal to make another Macy removal necessary simply for lack of room.”

On November 8, 1902, R.H. Macy & Co. opened its large store to thousands of shoppers. But the masses “did not crowd the store, as it has a floor space of twenty four acres.” The store employed about four thousand workers, had a 2,500-seat restaurant on its eighth floor and contained escalator banks that could carry forty thousand shoppers from one floor to the next.
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Though the move to Herald Square seemed like a bold move, Macy’s joined the Saks & Co. specialty store, which was located opposite Macy’s on Thirty-fourth Street. Saks & Co. opened its upscale store in September 1902, six weeks before Macy’s held its grand opening. In October 1906, the Herald Square area received another commercial boost when the B. Altman & Company and Jas. McCreery & Co. stores opened their new locations on opposite corners at Thirty-fourth Street and Fifth Avenue. McCreery’s continued to operate its older Twenty-third Street store, but the company hoped that its new Thirty-fourth Street location would attract shoppers who were not interested in fighting the crowds at stores located farther downtown.

This new shopping area captured the attention of Bernard Gimbel, grandson of founder Adam Gimbel and son of Isaac, and one of the company’s greatest leaders. Bernard graduated from the University of Pennsylvania’s Wharton School of Business in 1907 and immediately began working in the Philadelphia Gimbels store as a shipping clerk. By 1909, he was promoted to vice-president and decided that the company needed to expand. He urged the family to consider New York for its next retail location. After convincing his father and uncles that this would be a lucrative option, Bernard moved his office to New York City, and within a year, the Gimbel family was laying the cornerstone for a $17 million, one-million-square-foot, fireproof store at Thirty-third Street and Broadway on Greeley Square. At the ceremony, brother Jacob Gimbel spoke: