Sunday, December 25, 2011

Wishing You a Merry Christmas!

Shown above is an early 1970’s edition of one of the largest indoor Christmas trees in the world, and certainly the most famous one of any kind in the Chicago area – the “Great Tree” inside the Walnut Room restaurant at the legendary State Street home of Marshall Field & Company.

The Walnut Room (named for its beautiful walnut paneling) and the tree tradition date all the way back to 1907, when the current-day Marshall Field building, which evolved over a couple of decades on the corner of State and Washington streets, took on the form that is still largely recognizable today.

Standing 45 feet tall and sporting 5,000 or more ornaments and too many lights to count, the Great Tree was actually a real tree until recent decades when more stringent fire codes were imposed. Every year, a Marshall Field manager was assigned the task of traveling to Mellen, Wisconsin, a half hour from Lake Superior. There, with the assistance of local timbermen, he would select the perfect fir tree to be cut down and shipped by rail 400 miles back to Chicago. The annual lighting of the “Marshall Field’s Tree” was a big event, broadcast on and off over the years on Chicago’s WGN –TV.

For several years, our family had a tradition where the folks rousted us out of bed at 7am the day after Thanksgiving to drive downtown for breakfast at the Walnut Room, where we endeavored to be seated as close to the tree as possible. There were always long lines, but we usually ended up with good seats. These were the late 70’s and early 80’s, when Field’s launched their annual “Marshall Field’s & Christmas” campaign every year at this time, complete with commemorative hot chocolate mugs to take home. When this tradition started we were already teenagers, a period of time when I became “too cool” for a great many things, but somehow it always got through to me.

With the passing of time, much has changed, not the least of which is the name on the front doors of the store. (The name on the corner of the store remains the same, thanks to the National Register of Historic Places.) When my family and I were in Chicago this past Thanksgiving, we popped in to take a quick 3-minute look at the Walnut Room. The tree was still beautiful, the lines were still long, and I assume the food was still good. All I know is that the people I saw were having a great time. Oh, and that there’s very little I’m too cool for anymore.

I want to take this opportunity to thank you for your readership, loyalty and friendship during a year when I posted here far less than I wanted to. Hopefully what was new here you found to be enjoyable and informative.

And once again, may the True Joy of Christmas be yours, may your holidays be great and spent with family and friends, and best wishes for a wonderful and healthy New Year!


Saturday, December 24, 2011

Christmas on Fifth Avenue

“…by night it becomes festive, chic, expensive, for in this season Fifth Avenue is the quintessence of Christmas for adults…it is a scintillating sight, alive with bright movement. And in its own way, it is full of Christmas peace, the peace which makes such elegance possible…The shops of Fifth Avenue are mostly elegant shops offering elegant Christmas gifts for or from elegant people. But a stroll down Fifth Avenue at night is within the reach of everyone. The decorations are so lovely that a man can imagine owning everything, owning all of Christmas. A man can stare at this piece of jewelry, at that fur hat, can imagine his wife wearing them – and can acquire a glow that will last him all the way home.” – from an article by Robert Daley for The New York Times, December 14, 1964.

Pictured here, from an undated slide, is E.J. Korvette’s flagship store, which opened in 1962 at 575 Fifth Avenue, adjacent to some of New York's most prestigious retailers. Korvette's beautiful decorations were in league with them, while the “elegant gifts” referred to in Mr. Daley’s article were a bit more affordable there.

Friday, December 23, 2011

It's a Wonderful Life at Penney's

Christmas in downtown Lancaster, Pennsylvania, sometime in the late 40’s or early 50’s. The charming Santa decoration says both “Merry Christmas” and “Season’s Greetings”, so everyone is covered. Colorful garland hangs across the storefronts on either side. The building itself easily dates to the earliest years of the 1900’s if not before, and undoubtedly housed other businesses prior to J.C. Penney’s tenure.

Looking at this, I just know that Lancaster must have been home to a gracious soul like George Bailey, protecting the town's virtue and helping people in need so they didn’t have to “go crawling to Potter” or whoever the local robber baron may have been.

A good thing, too - otherwise the neon sign here would have read “Dime a Dance” instead of “Penney’s”!

Thursday, December 22, 2011

Christmas "On The Square" at S. Klein!

So to speak, that is. Regardless of location, S. Klein stores were always “on the square”, even if they were in a mall, a shopping center, or the middle of a field. It was an integral part of the name, dating back to the opening of their famous flagship store on New York City’s Union Square. An engineering square (barely visible below the “L” in the sign) served as a company logo of sorts for years.

Founded in 1906 as a wholesale manufacturer of women’s garments by Samuel Klein, a tailor’s son who emigrated from Russia at the age of five, S. Klein on the Square had evolved into a “full line” store by the early 60’s. They staked out the rarefied territory between department store and discounter, in a similar vein to E.J. Korvette and Alexander’s. Although Klein would eventually carry everything from furniture to food, the emphasis remained on fashion, for women in particular. In 1966, they were acquired by McCrory Corporation, assuming the role of high-end counterpart to McCrory’s Lerner Shops division and their growing stable of variety stores. Sadly, Klein was another in a long list of 70’s recession casualties, gradually closing stores in the early part of the decade and gone altogether by its end.

But times were good when the photo above, showing the Greenbelt, Maryland location in one of its first Christmas selling seasons, was taken. A massive (314,000 square feet!) store, it opened on October 17, 1963, a few weeks before the opening of a even larger Klein unit in Woodbridge, New Jersey.

A little snow would have made this the perfect scene, but I’ll bet that parking lot was a bear as it was!

Wednesday, December 21, 2011

Christmas at Randhurst, Early 1960's

Randhurst. In its early years it was an appealing sight, regardless of the time of year. At Christmastime that appeal was magnified in many ways. A glittering new shopping center it was, the world’s largest…where we lucky Northwest Suburbanites got fresh new gift ideas from sparkling new stores…where we found gifts galore from token to treasure…all under one roof, in 72-degree comfort.

When November rolled around, though, things took on a new air of excitement. Each Christmas purchase we made there, for example, was affixed with the gleaming “Randhurst Seal” - an evergreen-shaped foil sticker-thingy sporting the center’s winsome triangular logo, to glisten on our gifts as a symbol of our good taste and thoughtfulness.

And there were special events in abundance. What with school choir performances, ice skating shows (on temporary portable rinks), celebrity appearances, and a homestand by Jolly Old St. Nick himself, a trip to Randhurst became a must on everyone’s Christmas list in our corner of the world. Topping it off were the decorations – Christmas trees big and small, beautiful lights, animated displays and poinsettias in profusion, all of which combined to produce a magical effect.

Realizing that this holiday magic was by no means limited to Randhurst or the other ‘historically significant’ malls, of course. To be sure, “attention to detail” was the watchword for many of the early enclosed shopping centers, partly from a desire to compete favorably with the pomp and circumstance of the downtown department stores and their classic display windows. The victory of the suburban “branch stores” over their downtown flagships wasn’t yet complete, but by the mid-60’s the music had started playing and the end credits were about to roll.

As nice as many modern-day retail Christmas displays and events are today, and some are fantastic, there’s just something about the Christmas shopping experience of decades past that stands out. No doubt a major reason for this is our tendency to view this time of year through “nostalgia glasses”, to make endless comparisons with Christmas past. It’s an ingrained part of the American holiday experience. (One thing I know for certain – that department store gift boxes used to be a lot nicer than the flimsy things given out today. Don’t need my nostalgia glasses to see that.)

I suspect at least some of it may be due of the passing of an era – in this case, the era of the great display houses. For decades, the retail holiday decor business was dominated by a handful of firms whose origins dated back to the early years of the 20th century. These companies combined a theatrical flair with old-world craftsmanship to create charming and memorable scenes that became a vital part of a store’s image, year in and year out.

Most prominent among these firms was the Bliss Display Corporation of New York City. Founded by Lord & Taylor display designer James Albert Bliss in 1929, the Bliss company built elaborate displays for most of the key New York department stores – Macy’s (including this 1959 stunner), Gimbels, Abraham & Straus, Lord & Taylor and Bloomingdale’s, along with Philadelphia’s legendary John Wanamaker stores. Bliss’ reach extended well beyond the eastern seaboard, including work for St. Louis-based Stix, Baer and Fuller (I guess New Yorkers would consider St. Louis “the sticks”, right? Ok, I’ll stop that now.), among many others. A fascinating profile of the Bliss company and some of the other major display makers can be found in the book “Holidays on Display” by William L. Bird, Jr., a perennial coffee-table book at our house at Christmastime.

But Chicago had its own Duke of Display. The Silvestri Art Manufacturing Company was founded in 1901 by George Silvestri in 1901 and operated by his son, George Jr., during the exciting years of the 1950’s and 60’s. Silvestri’s plant was located at 1147 West Ohio Street, just blocks away from the best restaurant that ever existed - the late, great Como Inn. (As voted by me, that is. Whenever our family ate out for a special occasion and the choice was mine to make, that’s where we went.) The Silvestri company made a wide range of decorations, including “the white reindeer tethered to State st. lampposts”, as the Chicago Tribune put in one of a near-annual series of articles on the “fascinating” firm, the lighted trees and wreaths at O’Hare Airport ($15,420 worth in 1966 alone), and scores of elaborate, animated holiday window sets for such Chicago luminaries (pun not intended, but I’ll take it) as Marshall Field & Company, Wieboldts, Goldblatts and Carson Pirie Scott, including several years’ worth of jaw-dropping faux-European storefronts for the latter.

Silvestri had an interesting sideline that profoundly influenced Christmas decorating in general, both commercially and at home. In the mid-1950’s, they introduced the Italian miniature Christmas light to the American public, importing them and selling them in department and discount stores under the Silvestri name. Prior to that time, most indoor or outdoor lights available were the big honkin’ “C-7 style” GE or Noma lights. (Don’t misunderstand me. I still love ‘em.) The new lights, jewel-like and much smaller, proved to be such big sellers that the Italian government bestowed a special award upon Mr. Silvestri in 1957. Until the advent of LED lighting (Maybe my eyes will get used to those things one of these days.), they were what most of us thought of as Christmas lights, though more than a few folks still call them “Italian lights” (made in China for eons now, of course) and packaging still often refers to them as “mini lights”.

I’m not sure if the Randhurst decorations pictured above were Silvestri products, but because of their extensive work for Carson Pirie Scott, it’s a strong possibility. Carsons, of course, was “first among equals” in the Randhurst Corporation partnership, with the lesser among equals being Wieboldts (another Silvestri customer, as mentioned) and The Fair/Montgomery Ward. It’s safe to assume they had lots of influence in the matter.

The photos above were taken at Randhurst between 1962 (its first Christmas season) and 1965, and appear here courtesy of the Mount Prospect Historical Society. Greg Peerbolte, the society’s executive director, wrote a great book about Randhurst that was published this past spring (and is selling very well, I’m told) and can be ordered directly from the society. If you’re interested in shopping center history (and who isn’t, I beg?) or grew up in the area and want to reminisce, you’ll enjoy it thoroughly.

The scenes give a nice feel for the festivities, including the throngs lined up to meet Santa in front of Kresge’s (dig the Aztec-sun background and the space-age outfits of his teenybopper “helpers”). And yes, the impeccably dressed man in the suit, tie and pocket square is none other than actor Cesar Romero, in between his role in the movie “Ocean’s 11” (the Sinatra original, not the Clooney remake with 400 sequels) and his iconic role as The Joker in the 1966-68 Batman TV series. In the early 1960’s, Romero was the traveling “Ambassador of Fashion” for Petrocelli’s, a line of men’s suits.

There’s an indoor skating show, starring two ladies trying to defy nature and become twins, a fairly scary skating hippopotamus (I hesitated to include this photo for fear of a “New Zoo Revue” flashback. I may delete it yet.), and an angelically-robed children’s choir in front of The Fair’s interior entrance. (Check out the backwards “n’s” on the ‘Open Tonight’ banner in back. Cute.)

Several general views follow, depicting various areas of Randhurst bedecked in Christmas finery. At least one year (1963), they featured a set of 11 “traditional” downtown store-style display windows, constructed as free-standing dioramas, one of which is pictured above in photo number 12. Lastly, the landmark Randhurst water tower is converted to a special “holiday hot-air balloon”, years before The 5th Dimension made such things fashionable.

Below, two Christmas-related ads from the early days – a newspaper ad from 1962 (the source for my hyperbolic first paragraphs – I’d love to find one of those Randhurst “Christmas seals”!) and an interesting trade ad from a late 1963 issue of Display World, offering that year’s Christmas dioramas for sale after completion of the holiday run. It was commonplace in those days for big-name department stores or shopping centers to sell their used Christmas displays to smaller-market counterparts as every year something new was needed and the displays were far too costly to toss. The old “direct from Broadway” concept, although in this case it was “direct from Mount Prospect”.

Here’s hoping your Christmas shopping is almost done!

Monday, November 21, 2011

Mr. Penney, Mountains & Main Street

The pages of retail history are filled with the names of companies that no longer exist. Many of them were the picture of success for decades on end. They were leaders in their field - patronized, respected and loved by millions of customers. Household names. For one reason or another, these companies failed to adapt to conditions, and consequently they’re gone – sold out to a competitor, or just shuttered altogether.

It can be said that “adapting to conditions” is the one thing at which the 109-year-old J.C. Penney Company has excelled at above all else through the years. Rarely at the cutting edge of fashion – or anything else, for that matter, “the Penney Company”, as its founder always referred to it, has nonetheless continually managed to stay in step with the times, reinventing itself periodically to appeal to ever-evolving American shopping tastes. In the process they’ve amassed a track record that, despite occasional missteps, other retailers could aspire to only in their dreams.

In the mining town of Kemmerer, Wyoming in 1902, conditions were hard. Mr. Penney, in a letter to E.C. Sams, who would turn out be his most significant hire, described it as “a barren country, very little vegetation, and unless a man and his wife as well are strictly business, they might not like it.” The nearest water source, for example, was from a creek a half mile away from town. And for three months out of the year, the average low temperature was 6 degrees Fahrenheit or below. (“Might not make it” was probably more accurate.) Such was the unlikely setting for the birth of a retailing legend.

James Cash Penney (yes, that was his real middle name, he would assert on innumerable occasions) was born on September 16, 1875 in Hamilton, Missouri, a rural town some 65 miles northeast of Kansas City. Penney’s parents, in particular his father, a farmer and unpaid Baptist minister, instilled in him a strong sense of faith, hard work and ethics.

An early lesson in ethics came in his teens, when he was given a small parcel of the family land to raise watermelons. When the local county fair rolled around, Penney loaded up a wagonful of melons, parking just outside the fair’s gates where he began to do a “brisk business”, according to authors Tom Mahoney and Leonard Sloane in their book The Great Merchants. The elder Penney was not pleased when he discovered this, admonishing the young man for competing with the fair merchants “without paying for the privilege”. He ordered his son to take the wagon home, despite “Young Jim’s” technicality defense that he was actually selling outside the gates, albeit by only a few feet. It was a lesson Penney “never forgot”, the authors state.

Although he would maintain a lifelong interest in agriculture, Penney’s destiny lay elsewhere. “I am not cut out to be a farmer”, he told his father in a deathbed conversation related in the 1947 history of Penneys by Norman Beasley entitled Main Street Merchant, “I want to be a storekeeper”. In early 1895, at the age of 19, Penney was given his first job in retail as a junior clerk at J.M. Hale & Brother, a well-known local store in Hamilton. Penney was an eager pupil, and with Mr. Hale as “professor”, he learned the myriad aspects of store operations, from serving customers, to stocking, to sweeping the sidewalks out front. He drove himself extremely hard, earning promotions along the way, and over two years his salary increased from an initial $2.27 per month to $25 a month. But he nearly wrecked his health in the process. Things became so bad midway through his third year there that Penney’s doctor told him he was a prime candidate for “consumption” (an age-old synonym for tuberculosis) and that he needed to “get out of this Missouri climate” and move to Denver “right away.”

“Go West, young man, go West. There is health in the country, and room away from our crowds of idlers and imbeciles” is a phrase widely attributed to Horace Greeley, a famous 19th century newspaper editor and politician. Penney took his doctor’s (and Greeley’s) advice and boarded a train for Denver in June, 1897. To be sure, his health improved, but he did run into his fair share of “idlers and imbeciles” in his early work experiences there. Taking a job at the Joslin Dry Goods Company, the 5’8”, 135-pound Penney was subjected to endless hazing by the other clerks, so he left as soon as he could line up another job. A stint with a second area retailer came to an abrupt end when Penney discovered the store owner’s dishonest pricing practices. Disgusted, Penney demanded his earned wages on the spot and resigned.

Penney’s search for new employment led him 40 miles north to Longmont, Colorado, in the heart of cattle country, where a butcher shop was for sale. Penney decided he liked the town, and had his mother send him his savings of $300, enough to buy the shop and keep the butcher on the payroll. As it turned out, this particular butcher shop was heavily dependent on the business of one hotel, whose cook expected a bottle of whiskey each week on the side as a requirement for trade. (In researching this, I learned that most of Longmont’s early settlers came from Chicago. That explains that.) Penney complied for one week, and then refused to buy the cook off thereafter as a matter of conscience. So went the hotel’s business, and not long afterward, the butcher shop itself.

Eager to resume his career as a “dry goods man” after the butcher shop debacle, Penney applied for a job at a local store owned by T.M. Callahan, a dry goods and clothing operation similar to Hale’s, where Penney had worked back in his hometown. Callahan didn’t have any regular positions available, but informed Penney that he could fill in for one of his clerks who was ill and not likely to get back to work over the holidays – “so if you want to come in until he does come back,” he was quoted in Beasley’s Main Street Merchant, “I can put you on.” (And there you have it, dear readers - one of retailing’s towering figures started out as a “holiday temp”!)

Instead of letting him go upon the regular clerk’s return to work, Callahan, who was most impressed with Penney’s intuition and work ethic, made him an offer. Callahan’s business partner, Guy Johnson, whom he had set up with a dry goods store some 400 miles east in Evanston, Wyoming, needed some help. To help convince Penney to go for it, Callahan laid out his master plan to open a number of stores throughout Colorado and Wyoming, “the first time Penney had ever heard of chain stores”, Beasley states in his book. Penney eagerly accepted the challenge.

Not long afterward, Johnson offered Penney a partnership stake in a new store he and Callahan planned to open in Ogden, Utah, a town that at 35,000 in population was much larger than anyplace they’d opened their doors before. Upon making a visit to Ogden, Penney decided the city was “too big”, and while he liked the partnership idea, he preferred to operate in a smaller town. He expressed a desire to go to Diamondville, a ranching and mining town not far from Evanston. He liked the people he’d dealt with from there. Callahan suggested Kemmerer, Wyoming as an alternative, a “lively little (mining town)… between Diamondville and Frontier.” Penney agreed to move to Kemmerer, sight unseen. When Callahan and Johnson offered to finance Penney’s $1,500 stake at 8 percent interest, Penney opted to go with a bank in his hometown of Hamilton, Missouri instead, which had offered 6 percent terms, an early indicator of Penney’s independence and shrewdness.

In addition to the rustic conditions cited earlier, there was another major challenge facing anyone who cared to open up a “cash-only” store (which would be Penney’s rock-solid policy for more than 50 years) in a mining town like Kemmerer. There was very little cash in the town. Beasley quotes a banker describing the grim circumstance to Penney upon his arrival there: “Most of our people are miners. They are paid once a month. Most of them are clean out of money before the month is half over, and some of them seldom see any money.” In those days, mining companies often paid their workers in “scrip”, a form of coupon, in lieu of cash, and many goods were purchased at the mine-owned “company store” at unconscionable markups. The line in the song “Sixteen Tons”, a monster hit for Tennessee Ernie Ford in 1955, rang true for many mine workers in the early 20th century – “I owe my soul to the company store”. But rather than accept scrip, as other merchants (and saloons) in town did, Penney pressed on with his plans to open on a cash-only basis.

On Monday, April 14, 1902, the firm of Johnson, Callahan and Penney opened their first “Golden Rule Store” in Kemmerer, a one room building of wood-frame construction with “an attic, with the joists and rafters standing exposed”. In the days preceding the store’s opening, Penney had mailed out announcement fliers to 500 local mining families, and just before the store’s opening day, handbills – with a list of items for sale and their cash prices – were passed out on the streets of the town. The first business day, which didn’t end until nearly midnight, netted sales of $466.29.

Penney “considered it a sin if anyone came into the store without being waited on”, Beasley wrote, “(and) a greater sin if anyone went our without making a purchase”, so he and his wife Berta worked fastidiously, and demanded the same of their hired help. Another requirement, rooted in Penney’s religious upbringing, was that employees neither drank nor smoked. The first year’s results were far beyond any reasonable expectation, with total sales of $28,898.11 at a nice profit. Penney was able to pay off his loan and now owned his share of the store outright.

So impressed was Callahan with Penney’s performance in Kemmerer that he offered him complete rein over a fifty-store chain he was planning. Penney turned the offer down, though, citing he “was not ready for the responsibility.” Not yet, at least. The prospect soon took root in his thinking, however, and the idea of maybe three or four or six stores across “these mountain states” began to appeal to him, even though it would be “shooting at the moon”, as Penney said to his wife. She convinced him he was up to the task. Before long, Penney acquired partnership interests with Callahan and Johnson in two more stores, in Rock Springs (where he took over from a failing manager) and in Cumberland, Wyoming, a new venture.

In 1907, to Penney’s surprise, his partners informed him of their desire to sell out their shares in the three stores they co-owned with him. The agreed-upon price was $30,000, in a one-year note at 8 percent interest and Penney’s signature as the only security. Now he was on his own. Wisely, he chose not to stay that way for long.

Penney sought to emulate Callahan and Johnson’s “partnership” approach, where clerks were groomed for management and an eventual ownership stake in a store, but he would exercise more care in determining just who would be selected for these opportunities and when the time was right. “He felt…that the worst thing that could happen was to promote men before they were ready; when this was done, it meant defeat for both the giver and the receiver”, Beasley states.

Surprisingly, the man who would ultimately be the most important partner of Penney’s entire career showed up that same year, 1907. Earl Corder Sams was an ambitious 23–year old native of Simpson, Kansas. Having tried his hand at several trades and discovering he liked storekeeping the best, he engaged an employment agency to boost his prospects of finding a “dry goods” opening in the west, where he sought to make his future. The ensuing string of mail correspondence from Penney to Sams is presented in great detail in both the Main Street Merchant book and in Penney’s autobiography entitled Fifty Years with the Golden Rule, and makes for intriguing reading. In the typical ever-so-polite style of early 20th century correspondence, Penney expounds at length on his highly demanding requirements for the position, while cautioning Sams in detail about the pitfalls of merchant life on the frontier. You’d think he was interviewing for the most important position in the world. To Penney, it was. Sams made the trip to Kemmerer and then returned home, job offer accepted. After a month he returned, family and possessions in tow. Sams did so well as a clerk at Kemmerer that within months Penney put him in charge of the Cumberland store. A year later, Penney offered him part ownership in a new store in Eureka, Utah.

Penney continued to refine his partnership idea, devising a system whereby a successful store manager who had saved his money could buy a one-third stake in a new store, “provided he had trained a new man capable of opening and managing the new link in the chain.” Thus every “new man” sent out to open a store had been fully mentored as a chief clerk in his previous store, and would be able to buy an ownership stake in his next one. This was Penney’s vision for the growth of his company, and over time he gained the nickname “the man with a thousand partners.”

And he wasted no time in carrying that vision out. Penney, who just a few years before considered fifty stores a daunting number, began to set his sights far beyond that. By 1908 there were 4 total stores, two years later there were 14, and two years after that, 1912, there were 34, including locations in Wyoming, Utah, Idaho, Colorado, Nevada, Montana, Washington and Oregon. By this time, Penney himself had relocated to Salt Lake City, where he set up a central buying office and warehouse for the company.

But amidst all of this came a personal tragedy, when Penney’s beloved wife, who was in no small part responsible for his success, passed away suddenly just prior to a planned European vacation trip. He “plunged himself into work, open(ing) stores in rapid succession”, Beasley wrote, and took an extended buying trip to New York. Instead of returning to Salt Lake City afterwards he sailed for Europe, alone.

Upon his return, Penney dealt with some pressing issues facing the business. One was a need to revisit the name of his stores as the chain rapidly grew. Unfortunately, the name “Golden Rule Stores” was not at all unique to Penney’s organization. His former partners, Johnson and Callahan, were still using it on a number of stores they owned (separately, as the partnership between those two men had since been dissolved), and a host of other unrelated stores in the West used the moniker as well. On top of that, the use of the name “Golden Rule”, based on the Biblical principle “Do unto others as you would have them do unto you”, was considered suspect by many customers who feared that less-than-scrupulous operations were using the name as a cover for shoddy (and shady) business practices. Penney decided to replace the Golden Rule name with his own.

A major dilemma was the need for increased financing to handle expansion. Penney “had reached the limit of his personal borrowing (ability)”, Beasley wrote, and now the only real option was to incorporate and sell stock. This forced a change to the partnership structure as Penney originally conceived it, where the partners’ ownership stakes in the stores were converted to preferred stock in the new “J.C. Penney Stores Company”, a Utah corporation, incorporated on January 17, 1913.

Soon afterward, Penney began the long process of moving the nerve center of the company to New York City, starting with a central buying office there. The move was initially met with protest by many of Penney’s partners, virtually all of whom were “small-town Westerners (who) knew the ways of the West” and “wanted no part of New York.” (I’m picturing those old Pace picante sauce commercials, but I’m sure it was more dignified than that. Dub Taylor would have made a good storekeeper, though!) The fact was that most of the partners were resistant to the idea of any centralized buying office, which in part spurred Penney’s decision to close the Salt Lake City buying operation not long after it opened. (Penney blamed himself for the failure, for bringing in an outside person to run it instead of one of their own.) Even Sams was skeptical of the idea at first, but Penney’s logic was rock solid – at the time, a huge percentage of clothing and other “soft goods” was designed and manufactured in New York’s storied “Garment District”, a roughly 40-block area of Manhattan. Penney, who for all his gifts as a developer of management talent was also a consummately skilled buyer, saw the advantages of being close to the action.

The ethical aspects of business were always topmost in Penney’s mind, and in 1914 he authored a famous document which would become known as “The Original Body of Doctrine” (later “The Penney Principles”) that has been quoted multitudes of times over the years in nearly every forum imaginable. They were: “1.) To serve the public, as nearly as we can, to its complete satisfaction. 2.) To offer the best possible dollar’s worth of quality and value. 3.) To strive constantly for a high level of intelligent and helpful service. 4.) To charge a fair profit for what we offer – and not all the traffic will bear. 5.) To apply this test to everything we do: ‘Does it square with what is right and just?’” Timeless principles from a “mission statement” issued nearly a century ago, long before they became obligatory.

At the end of 1916, Penney stepped down as president of his namesake company, turning the operation over to the very capable hands of E.C. Sams, while Penney assumed the title of chairman. Penney chose instead to concentrate on leadership development and philanthropy, and years later in his eighties and nineties was the smiling, grandfatherly public face of the organization. With the exception of a very brief period following Sams’ sudden passing in 1950, however, Penney would never really run the company again, although his input was sought in major decisions and he remained the subject of great affection and respect.

The 1920’s saw some key acquisitions for the J.C. Penney Company, but one stood out as most significant, if only for sentimental reasons. In 1923, Penney got wind that J.M. Hale, the owner of the store where Penney started out in his hometown of Hamilton, Missouri, was planning to retire and sell his business. A delighted Penney bought out his former boss (years earlier he had privately decided not to open a store in Hamilton until such time as Hale was ready to sell), and the reopening of the Hamilton store as a J.C. Penney unit was symbolically timed to make it the 500th in the chain. When the location was closed years later in 1981, the story made the New York Times.

In the next few years, two more old friends sold out to Penney as well. Tom Callahan had continued to operate 12 stores, years after he, Guy Johnson and Penney split up their three-store partnership, and in 1926 he sold those stores to Penney. Johnson had remained in the dry goods business as well, with 20 stores of his own which he sold to Penney two years later. True to form, the company paid cash in both deals, which put the chain at nearly 750 total stores.

The company had grown to a point where it was time to make some major changes to its structure. Penney’s “manager/partner” concept had led to a somewhat haphazard growth pattern with “scarcely little central planning”, as Beasley put it. And while allowing a manager to open a new store provided a good opportunity, it was also a burden that took time away from the needs of the store he was actually running. To replace a manager’s lost income potential from opening new stores, Penney instituted a plan which “guaranteed by contract a share of the net profits of the store he managed,” (One-third of the store’s after-tax net, according to a 1950 Fortune magazine article. I’ll put the Kleenex away now.), and the manager could fully concentrate on operating his store. Market planning, store locations and real estate deals would now be handled by centralized departments. With these changes made, the stage was set for even faster growth and the establishment of Penney as a truly “national” company. At the end of 1928, with over 1,000 stores and $176 million in annual sales, the company’s renown was rapidly spreading beyond its still primarily Western base.

Among the J.C. Penney Company’s growing legion of admirers were some of the top retailers of the day. Over a lunch meeting with Mr. Penney near his New York offices late in 1928, a prominent Chicago businessman floated the idea that Penney should consider a merger with Montgomery Ward & Company, America’s second largest mail order firm, which was just starting to open retail stores of its own. The would-be matchmaker was Marshall Field III, scion of the legendary Chicago retailing family and president of the company that bore his name. The idea piqued Penney’s interest, and that very afternoon he called a meeting of his board of directors, and within days Ward president George B. Everett traveled to New York to meet with E.C. Sams and other Penney executives to discuss a possible merger.

Unclear after the meeting as to what Ward’s intentions were, Sams wrote Mr. Everitt to see whether he thought Montgomery Ward & Company should acquire Penney, or the other way around. Were Penney to be the suitor, they would need to ascertain the value of three key aspects: Ward’s corporate goodwill, their “organization and experience in buying and distributing lines of merchandise” that Penney didn’t handle, and the mail order operation, Ward’s greatest asset and a business with which Penney had no experience whatsoever. Everitt, in response, assured Sams that his company wasn’t for sale nor did he presume that J.C. Penney was. Any combination of the two companies would be a merger of equals that would form a completely new company. Committees were put together on both sides and much correspondence ensued, but the idea was soon dropped.

No sooner had the talks with Montgomery Ward ended that another overture came Penney’s way, once again from Chicago. General Robert E. Wood, president of Sears, Roebuck & Company, wrote a letter to Sams. Sears was underway with a rapidly-growing program to open retail stores as an adjunct to its massive catalog business, and Wood wanted to gauge Penney’s interest in a possible merger, as Penney’s store network was already sizable and becoming more well-developed by the month. The idea was too intriguing not to consider, and plans were laid for Sams to meet with “The General” in his Chicago offices. Wood proposed an idea (that Sears would ultimately adopt for itself in modified form) that the combined business “would have three segments: ‘a mail-order division; an A store division, which would include stores in the large cities; and a B store division, which would include stores in the smaller cities and towns.’” Under this arrangement, “Sears-trained executives” would continue to run the catalog business, while the “B” stores would be under the control of “Penney-trained merchants”. The larger “A” stores would presumably be run on a consortium basis, although some of Penney’s big-city units were impressive in scale by that time. Buying responsibilities would be split along advantageous lines, with Sears’ buyers continuing to handle hard goods, including appliances, farm equipment and automotive, while all apparel lines and other soft goods would become the responsibility of Penney people.

The merger would provide some advantages based on sheer size – the possibility of having the “dominating store” in town, the ability to split the country up into manageable districts “such as A&P and Woolworth now provide” and the ability to “attract outstanding personnel”. The talks heated up to the point to where the New York Times pulled the trigger on the story – “Penney Chain To Go To Sears-Roebuck”, the headline read in a December 3, 1929 article, based on “circumstantial” confirmation (insert choice remark here) by Sears Chairman Julius Rosenwald, who deferred to Wood on the details. (Rosenwald was Sears’ chairman, but Wood unequivocally ran the company.). Ultimately, Sams and the other Penney execs decided against it, out of concern that “our younger executives would have lessened rather than greater opportunities” in a situation where Sears would have clearly been the dominant entity. Beyond that, at the time Penney simply didn’t have the management manpower the deal would have required.

“The Penney Company” would go it alone, in a decision that was made for practical considerations. In light of history, of course, it turned out to be incredibly wise.

Shown above are various Penney stores from the 1920’s and 30’s, although some of the photos themselves postdate that era. Top to bottom, first up is the massive Oakland, California location, then a 1930’s Inglewood, California store followed by the small 1920’s store it replaced, a 1950’s view of a much older store in Cortland, New York (check out the shining details on that great porcelain sign), and a can’t miss “white goods sale” in Pasadena, California, with fine Spanish style architecture. These photos appear here courtesy of the J.C. Penney Archives at the DeGolyer Library at Southern Methodist University. My very special thanks to Joan Gosnell, archivist extraordinaire, for her extensive help and her sense of humor.

Pictured below is James Cash Penney’s second store in Kemmerer, in what is probably the earliest known photo of a Penney store. (Engravings and paintings of the first store exist, but no photos to my knowledge.) Something tells me the establishment next door was much more “saloon” than “opera house”.

Wednesday, September 28, 2011

When It Was Penneys

For most of their first sixty years of existence, the signs out front read “J.C. Penney Company” or “J.C. Penney Co.” in “black and mustard yellow“ as Time Magazine described them in 1965. Straightforward and prosaic these signs were, with the exception of some nice deco versions in the 1940’s. From 1971 until earlier this year, it was “JCPenney” in Helvetica, a much-loved classic in its own right. And just recently the logo has been tweaked, in an understandable way for understandable reasons.

But from 1963 to 1971, a snazzy, remarkable, highly individualistic logo took center stage, and even the name took on a new form – “Penneys”. Sure, the word “Penney’s” (in standard letters, with an apostrophe) had been used from time to time previously, on the odd blade sign here, the occasional newspaper ad or gift box there, but the new Penneys logo would be emblazoned on everything – traditional company products like clothing, sheets and towels, new offerings such as car batteries, stereos and sporting goods, and the cover of the newly-launched Penneys catalog. And on the stores themselves, of course.

The new logo, part of a “total graphics design program”, was the creation of New York design firm Peter Schladermundt Associates, who worked to achieve the following objectives, outlined in a February 1964 Chain Store Age article: “The Penney trademark would have to exude fashion, hint at broader merchandise interests and expanded consumer services, larger, more exciting stores (and) appeal to a more sophisticated ‘self-service’ shopper”. After coming up with several preliminary designs, they arrived at the perfect “P” – a black vertical “strength, durability” with a blue “cool color, for permanency” curved section “fashion flair, dynamic feeling of future”. The rest of the letters were designed in like fashion.

Late-term baby boomers like me (who to this day call the place “Penneys”) tend to look back at this logo with great fondness for a number of reasons. For many of us, it’s the earliest one we remember – in my case at the Golf Mill Shopping Center in Niles, Illinois. The short tenure of the logo is probably another factor – it’s truly a “sixties thing”. But most of all, it was just so cool looking! This admiration is by no means limited to over-40 folks however, as evidenced by the affectionate nickname the logo has picked up in recent years – the “Funky P”. (Although if you ask me, the whole thing is funky. Just saying.)

Getting back to the company’s newest logo, the all lower-case “jcpenney”, I don’t think it’s bad at all by current standards. Will it last as long as the “Funky P” did? I’m not sure – attention spans are kind of short these days. As long as the 1971 logo? Not a chance. But they can always go the “funky” route next time!

The publicity photo above, from 1964, depicts the inside entrance of the Penneys store at the Shepherd Mall in Oklahoma City, which opened in November of that year. Below, shown here by the kind permission of Chain Store Age magazine, are two graphics - the first showing some interesting experimental versions of the new Penney logo, the second showing the final version, with notes by designer Schladermundt. I think they made the right choice, don’t you?

Tuesday, September 6, 2011

Holiday Inn - The World's Innkeeper

The "Great Sign" combines with a rooftop sign to form a powerful image, 1972.

Rarely has a commercial icon been so appropriately named as “The Great Sign” of Holiday Inn. It was “great” in multiple senses of the word. Great in size - the standard version stood a titanic five stories tall and sixteen feet wide. Great in impact – striking green, orange and yellow colors by day, a blaze of multicolored neon tubing and chasing lights by night. Great in presence – a fixture at over 1,200 Holiday Inns the world over by 1970. And a great part of childhood memories for so many of us.

For us, Holiday Inns played a part in key events and everyday moments alike. We stayed there on vacation trips or on the way to visit family. For large gatherings – weddings, anniversaries, etc., we put up out-of-town family members there. We celebrated graduations, engagements and other milestones with dinner at the local Holiday Inn restaurant. And of course, our Dads got their shop towels there.
...and it was pretty appealing during the day as well. 1963.

The story of Holiday Inn’s origin has been told over and over to the point of becoming a part of American folklore: It was the summer of 1951. A Memphis businessman drove his family halfway across the country on a sightseeing vacation trip to Washington DC. The accommodations along the way were substandard at best – dilapidated motor courts, broken-down motels and the like. These places were dirty, uncomfortable, poorly maintained and offered no conveniences – no food service, no air-conditioning, no phone, pools or pets, no cigarettes. Worst of all, they charged extra per person – and he and his wife had five kids! Upon their return home, he dreamed up an idea for a new type of accommodation that would right all of the aforementioned wrongs. Plans were drawn up, financing was secured, and the first Holiday Inn opened up about a year later. The rest, as they say, was history.
I wonder who changed the rolls on that player piano.1961.

By any standard, Kemmons Wilson was a successful man - long before his family’s fateful vacation trip and the resultant idea for Holiday Inn ever came about. He was the true embodiment of an entrepreneur, with boundless energy, curiosity and decisiveness, qualities that made him a millionaire at a young age. Born in 1913 in Osceola, Arkansas, and losing his father months later, Wilson and his resourceful mother, Ruby “Doll” Wilson, who installed a lifelong sense of self-confidence in her son, moved 55 miles away to Memphis before his first birthday. Wilson got his first “job” as a baby, when an image of his smiling face was used in advertisements for the local Sunbeam bread baker. A series of part-time jobs led to his first business venture before the age of twenty – he bought a popcorn machine for fifty bucks and convinced an area movie theatre operator to let him sell popcorn to the theatre patrons. When Wilson’s concession stand began to net twice as much as the theatre itself, the manager tossed him out, with little choice but to sell the machine for what he originally paid for it.

Wilson stayed in the amusements business, using the proceeds from the sale of the popcorn machine to buy a small group of used pinball machines, placing them in various local establishments, reinvesting the profits to continually add more machines. Within two years, he had saved enough money to try his hand at another venture – home building. Building his first house in 1933, Wilson was able to borrow enough against it to build more homes, and by the eve of Pearl Harbor he had assembled impressive holdings in apartment buildings and theatres (holding fast to the popcorn concessions, of course) as well. He also picked up the area selling rights for Wurlitzer jukeboxes, and soon built up their highest sales volume in the entire country. Wurlitzer dispatched a special representative to Memphis to present Wilson an award for top sales performance – up-and-coming bandleader Lawrence Welk. A few years afterward, Welk would be given a national television show, and in time all America would become familiar with his "A-one, an-a-two" song count-offs and the famous “bubble machine”.An early 60's Holiday Inn room. The TV set is a Philco Predicta. Reportedly, they didn't work very well, but they looked fantastic.

After the U.S. was plunged into World War II, Wilson, who was already an experienced pilot, joined the U.S. Air Transport Command, flying transport missions over the treacherous Himalayan route from India to China. Not wanting to burden his new wife, Dorothy, and his mother with debt should the worst happen, Wilson sold off his business interests for $250,000 prior to leaving the country. While in the service he made an acquaintance that led to one of his few business flops. An Army buddy of his owned the Orange Crush distributorship in Chicago and his enthusiasm convinced Wilson to buy the Memphis Orange Crush bottling company, which had done well during the sugar-rationed war years, when he got back home. Once sugar supplies returned to normal and soft drinks were in plentiful supply again, however, Memphians expressed their overwhelming preference for Coca-Cola, rendering Wilson’s $100,000 investment a bomb. (Reminds me of a conversation I had years ago with a work friend from Connecticut where we somehow got on the subject of soft drinks. He said “It’s like this - Pepsi is a Yankee drink. Coke is a Reb drink. There ya go.” I’m not sure it’s that simple, but I admired the way he had this squared away in his own mind.)

In any event, Wilson’s construction career kicked back into high gear, and it wasn’t long before he became one of the most celebrated businessmen in Memphis. And then came the fateful summer 1951 vacation trip, referred to above. Immediately upon returning home, Wilson set about conceptualizing his new “hotel court” idea in great detail, “siz(ing) up the ideal (room) dimensions for efficiency and comfort”, according to Wilson’s 1994 autobiography “Half Luck and Half Brains”. Interestingly, the dimensions Wilson arrived at, 12 by 18 feet, became an industry standard that remained in place for decades. Once his brainstorming was complete Wilson called upon Eddie Bluestein, a draftsman he frequently hired, to formalize his ideas in blueprint form. As it turned out, Bluestein’s contribution would be far greater than a mere clean-up of Wilson’s already well-thought out plans. The evening Bluestein drew up the plans, the 1941 film Holiday Inn, starring Bing Crosby and Fred Astaire, happened to be airing on television. (I’ve loved that flick since I was a kid. To this day, we never fail to watch it at Christmastime.) Bluestein watched as he worked, and on a lark he wrote the name “Holiday Inn” on the finished drawing. Wilson loved it.An early Holiday Inn front desk. The Mickey Mantle/Roger Maris cover of the Life magazine on the rack dates this to 1961.

A steaming Saturday afternoon in August (is there any other kind in Memphis?) of 1952 saw the grand opening of the world’s first Holiday Inn, on Summer Avenue (U.S. Highway 70), the main road leading into Memphis from the east. Among the dignitaries scheduled to be present was Frank Tobey, the mayor of Memphis, who would cut the ceremonial ribbon. As luck would have it, the mayor showed up late, and Dorothy Wilson convinced her husband to let their kids perform the honors instead. The press photo of that moment – the five Wilson kids all dressed up and lined up by age, about to cut the ribbon while the very first Great Sign looms in the background – stands today as an iconic American image.

Within just over a year, Holiday Inns were opened on the other three main thoroughfares into Memphis, on U.S. Highways 51 South, 61 North and 51 North. It was a fitting first example of one of Wilson’s key strategies for Holiday Inn – to build on the edge of a city, on every major route into town, on the right side of the street to catch inbound travelers. “So you couldn’t come into town with passing one of my places”, he later put it.

From the beginning, Wilson set a goal to develop a national chain of motels. 400 units would be the ideal number, he told his wife and others in early conversations, based on locating the motels at “day’s drive” intervals across the Lower 48. He soon realized the need for help to accomplish this goal, from both a financial and a management standpoint. In late 1953, Wilson called on an acquaintance of his, a fellow Memphis area builder named Wallace E. Johnson, “the biggest thinking man I knew” as Wilson later described him in 1971 Saturday Evening Post profile, who specialized in homes for middle and lower income families. Nearly twelve years older and possessed of a lower-key demeanor than the ebullient Wilson, Johnson rose from similar hardscrabble origins to become one of the nation’s top homebuilders by the early fifties.The Chicken Dinner was a Holiday Inn staple in the 60's, as was "Cheddar Apple Pie". The Holiday Inn Directories were close at hand.

Johnson’s understanding of the role of showmanship and bold moves mirrored Wilson’s own. Years earlier, he’d had 5000 cardboard signs printed up that read “Let Wallace E. Johnson Build Your Home On This Lot” and proceeded to put the signs up on vacant lots all over town, irrespective of the lots’ ownership. The publicity was worth its weight in gold, and more than a few stunned property owners proved willing to let Johnson build on their lots on a spec basis. Wilson realized that Johnson’s financial acumen and his strong ties within the National Home Builders Association (an eagerly-anticipated potential source of Holiday Inn franchisees) would be invaluable to Holiday Inn’s future, so he arranged to visit Johnson at home one evening, where he laid out his dreams and plans for the company. Impressed by Wilson’s thoroughness, enthusiasm and the Holiday Inn idea itself, Johnson was in – the start of a 25-year long partnership and a company that would impact the world.

Wilson and Johnson hoped, and had every reason to expect, that the Home Builders Association would yield an ideal pool of franchising candidates for their fledgling chain, but it proved to be slow going. Many members were well-heeled, respected in their local communities and had good access to construction financing. Understandably, the two men went all out in promoting their new venture within the organization – they had an elaborate model built of a Holiday Inn prototype and set it up at the nationally-renowned Home Show in Chicago. They invited a nationwide group of them to Memphis for a VIP presentation of the Holiday Inn program. Sixty-five builders attended, but amazingly there were only four takers. Despite Wilson and Johnson’s marketing efforts and their ridiculously low franchise costs - a $500 initial fee and a seven-cent per night fee (five-cent royalty and two-cent advertising co-op charge) per room – only a relative handful of their fellow home builders ever bought in. Eventually, it was obvious that they would have to widen their efforts.

The Home Builders’ group yielded one major plus, however. In late 1955, William B. Walton, the staff attorney for the group’s Memphis chapter, was persuaded to leave a comfortable job there on the strength of the Holiday Inn dream (and very little in the way of salary initially), joining the company the following January. The addition of Walton completed a management trio that would prove to be formidable indeed – Wilson the builder, ever scouting out new locations and pushing the frontiers, Johnson the financial liaison and sage advisor and Walton the operations man, responsible for developing and maintaining the Holiday Inn experience. Among the first things they did was to hire two salesmen and put them on the road to push the company’s franchise plan, with “job number one” being to get in front of any and all qualified franchising candidates. Interestingly, as Johnson noted in his autobiography Together We Build, when they doubled the franchise fee to a thousand dollars, “it was easier to find purchasers at that price”. As Holiday Inn grew, the fees went up significantly from there.Typical early Holiday Inn restaurants. Perhaps the "Space Age" isn't the best way to describe the 1960's. The "Sconce Age" might be better.

By the summer of 1957 there were 25 Holiday Inns, seven company-owned and eighteen franchised units. On August 20th of that year, in order to facilitate expansion and to help relieve the tremendous personal financial burden on Wilson and Johnson, Holiday Inns, Inc. held its first public stock offering. It was a smashing success, and was soon followed by a second one that was equally successful. By the end of the 1950’s Holiday Inn was well on its way to becoming a national brand, and the development opportunities were flowing in heavily. In order to take full advantage of those opportunities, which coincided with unprecedented growth of the economy and the explosion of the American roadside culture (in which Holiday Inn would play a seminal role), huge amounts of borrowed capital were needed. Later on, when President Eisenhower convened a meeting of business leaders in Virginia, Wilson attended and was able to make contacts with investors that eventually resulted in another $4.5 million in capital investment, which certainly helped. By the end of 1962, five years after the initial stock offering, there were over 300 Holiday Inns operating and nearly 180 more in the construction or planning stage.
Charleston, South Carolina, Mid 1960's.

The next couple of years saw two events that played an unequaled part in fueling Holiday Inn’s rocket-ride to the top. In 1963, Holiday Inn struck a long-term agreement with Gulf Oil Corporation, a petroleum giant with a near-national reach at the time. For some time the company had been interested in setting up a joint venture with an oil firm. The benefits were self-evident – the Holiday Inn locations “on major highways, catering to the traveling public, would be strategic locations for service stations”, Johnson noted in his book. They’d even tried it once before with another company (that Johnson declined to name) whereby Holiday Inn would receive royalties on each gallon of gas sold, once thirty of their stations had been co-located with Holiday Inns. “But we never did get the required thirty”, Johnson wrote.An early Holiday Inn/Gulf combination. At one point, Holiday Inn actually published a book featuring pithy sayings from the Great Sign marquee boards.

The Gulf agreement supplied a much-needed financial bonanza for Holiday Inn. Under it, Gulf agreed to loan the company $6 million outright and to buy five percent of Holiday Inns, Inc. preferred stock to the tune of $15 million. They also agreed to provide a 100 percent guarantee on Holiday Inns’ mortgage loans up to $25 million. On top of that, Wilson, in his never-ending quest for prime property for new Holiday Inns, was frequently able to sell the corner portion of the new properties for 25 percent of the total land cost to Gulf for construction of a new service station. As a result, hundreds upon hundreds of Gulf stations opened up next to new Holiday Inns throughout the 60’s and 70’s - a big win for the oil company, given the high quality of the locations. Most importantly, from a customer’s viewpoint at least, the Gulf Travel Card could now be used to pay for rooms and meals at Holiday Inns. The first arrangement of its kind, it was significant in an era when American Express, Diners Club and Carte Blanche cards were generally carried only by executives or upper-income families and bank cards (the forerunners of MasterCard and Visa) were in their infancy. Many Americans had gas cards, though, and sales went through the roof. Within a few years, Gulf cardholders were racking up more than $100 million dollars a year in charges at Holiday Inns. Eventually the design of the card itself was modified to depict a Holiday Inn.The Holidex control center in Memphis, circa 1965. Somehow I find this comforting.

The second major catalyst came with the launch of the “Holidex” computerized reservation system. By the early 60’s, most of the largest American companies were wildly enthusiastic customers of IBM, Burroughs or one of their competitors, and huge mainframe computer systems were popping up like mushrooms. Early on, most of these systems dealt strictly with accounting functions, but the frontiers were expanding rapidly. In 1964 a keenly interested Kemmons Wilson hired an IBM consultant to look into ways to connect and keep track of Holiday Inn’s increasingly far-flung empire. “At first, negotiations were stormy”, Wilson’s book states, with IBM reluctant at first to develop a custom system for Holiday Inn, then agreeing to do it at too high a cost. Wilson walked away and threatened to take the project to a competitor, spurring a visit by IBM’s legendary chairman, Thomas F. Watson, Jr., to Holiday Inn’s Memphis offices. An 8 million-dollar price tag was agreed upon (personally guaranteed by Wilson and Johnson in those still-fledgling days), and the following year, the Holidex system, employing two IBM System/360 mainframes in Memphis and a terminal at every single Holiday Inn front desk, became a reality.

With the Holidex system, inn operators had “instant knowledge of room listings open in any other Inn”, as Holiday Inn Magazine (“The Magazine for Travelers”) put it in 1965, and could make reservations for their customers at any of the company’s (then) “72,000 rooms in 608 locations” as a free courtesy service. Prior to that time, customers who lived outside major cities had to place a long-distance call to the specific hotel they were interested in to reserve a room. At that time, when even a quick long distance call could easily cost two or three bucks ($10-12 in today’s dollars) and 800 numbers were still a few years away, the appeal was obvious. Holiday Inn had double-jumped the competition, and from then on the company was besieged with franchise applicants, as Wilson says in his book – “from the day we got (Holidex), it was no longer a matter of selling franchises, it was a matter of taking orders for them. They stood in line waiting to get a Holiday Inn franchise…because nobody else had anything like it”.Somewhere in California, next to "the freeway".

And the growth came, like wildfire, with Wilson, Johnson and Walton spending much of their time surveying America’s various sprawling metropolises (metropoli?) by air, usually with Wilson himself at the Cessna’s controls. A particular obsession of Wilson’s, understandably, was Southern California, that wonderland of growth, and it reached the point where he was spending “two or three months a year” there scouting sites. Ultimately he assigned an assistant to track down the landowners near every single freeway interchange in the greater Los Angeles area. (For those of you unfamiliar with the area, they really are called “freeways” there. In other parts of the country we would say “Interstate 10” or “I-10”, but in L.A. it’s “The 10 Freeway.” Now when you visit there, you can impress the heck out of people - with my compliments.)

At the same time, Holiday Inn began to introduce additional hotel formats as a means of broadening their appeal. The company’s mainstay, as mentioned in their 1964 annual report, was the “dependable two-story highway side Holiday Inn” on the edge of town, but according to Johnson, they now realized “the need for at least one downtown Inn in big cities and are trying to fill it”. They began to fill it in a big way with high-rise hotels – an 18-story, 600-room hotel in Manhattan (440 West 57th Street), for starters, that opened on November 12, 1963 and was nearly twice the size of their largest existing unit, a Dallas location.Late 60's view of the Holiday Inn-Lake Shore Drive in downtown Chicago. The blue-peaked building in back of it is the American Furniture Mart. The John Hancock Center is under construction in the distance.

Two years to the day later, a 33-story Holiday Inn, complete with a top floor revolving restaurant (offering diners a striking panoramic tour of the Chicago skyline and Lake Michigan over the course of an hour) opened on Lake Shore Drive. This magnificent hotel was a point of pride for Holiday Inn for many years after opening, and could ostensibly be considered the company’s “flagship” at the time. I remember this one well, because it was next door to the historic American Furniture Mart building, which housed plush showrooms for all of the major furniture manufacturers, including the one my Dad worked for. Twice a year, retail chain furniture buyers and designers would converge there for the Midwest Furniture Show, but it was open year round. His office was there until the late 70’s, and he would often take my brother and I downtown on Saturdays to catch up on some work. We were usually the only ones there and had the run of the place - sitting in all the new recliners, drawing up org charts on Dad’s company letterhead (“No, I’m the president!”), and the like. Of course, when we had lunch at the Holiday Inn there it was in the main floor restaurant instead of the revolving one up top. Still felt like a big deal, though.A little Holiday Inn next to a little Gulf station. This sort of cuteness doesn't occur today.

High rise hotels would become a vital part of the Holiday Inn mix, but the company explored the other end of the spectrum as well. A limited service concept first called “Holiday Inn Compact” was launched as “Holiday Inn Jr.” in 1963. These were intended “to attract the economy-minded traveler” and at only 32 rooms in size would be ideal for “hospital parking lots, congested downtown areas and similar sites where space is at a premium”. The Holiday Inn Jr.’s had no pool, and a small coffee shop took the place of the standard restaurant and bar. Only a handful of these were ever built, and the company wouldn’t revisit the limited service idea until much later. But take a look at the Holiday Inn Jr. photo – is that cuteness personified, or what? (Maybe the phrase should be “cuteness objectified”, but I think you know what I’m trying to say.)Architectural renderings of early high-rise Holiday Inns from the firm of W.W. Bond.

For many of us, the enduring image of Holiday Inn is somewhere between the two extremes mentioned above – a medium-sized, four to six-story hotel flanked by the “Great Sign”, on whose marquee board might be congratulations to a newly-married local couple or one celebrating their 50th anniversary, or a welcome message to some group or organization arriving in town for a special event. Aside from the signs, the Inn exteriors reflected a distinctive image – brick and ornamental “screen block” on typical Inns, precast concrete slab on the high-rise behemoths. Much of the credit for the Holiday Inn “look” can be credited to W.W. (Bill) Bond Jr., their preferred architect. Memphis-born and Notre Dame-educated, Bond, like his most important client Kemmons Wilson, worked at a furious pace and was early to adopt computer technology, using it to develop a database of standardized designs for the multitude of Holiday Inns being built at the time. “Why draw things such as a standard roof expansion joint over and over again?” he told Holiday Inn Magazine in the mid-60’s.A very nice lobby from the mid-1960's.

Holiday Inns were noted for their interior designs as well, which became increasingly eclectic as the 1960’s progressed. In their earliest years, most of the company’s decorating was handled by none other than Ruby “Doll” Wilson, Kemmons Wilson’s mother, who held the title of Vice President of Design. Eventually, the job of “chief interior decorator” went to Tom Wells, a graduate of the University of Alabama and the prestigious Parsons School of Design in New York City. Wells had done the interior designs for a franchised Holiday Inn in Montgomery, Alabama, and Wilson fell in love with his work. Wells would go on to decorate nearly 500 Holiday Inns, becoming highly influential in the industry. Wilson’s book cites an article by a Memphis reporter that outlined Wells’ modus operandi and philosophy – “(Wells) mixes all styles and periods and colors…using one or two predominant colors and then bringing in all the jewel tones”. “There’s too much matching in decorating”, Wells told the reporter. “We never match anything.”

By the early 1960’s, the inns themselves were merely the center of a wide-ranging empire. In fact, one would be hard pressed to come up with a better example of “vertical integration” (when a company makes most things it uses or sells itself rather than buying them from outside sources) than Holiday Inn in that era. They made their own tables. They made their own lamps. They made their own hot dogs and note pads and stamps.

(They didn’t make their own stamps. I was just trying to write like Dr. Seuss there and needed a rhyme. Sorry.) They did make just about everything else, though. A longtime Holiday Inn executive was quoted in Wilson’s book – “if it took wood to build something, Kemmons wanted to own the forest.” For Wilson himself, it was a matter of control and the economy of scale – “And back then, we were building so many Holiday Inns, it was really worthwhile. We could get that stuff out when we wanted it. We saved an awful, awful lot of money.”

Examples were Holiday Woodcraft, makers of “custom counters and display cases”, Johnson Furniture - “stereo and television cabinets, living-room and dining-room suites”, Modern Plastics – “lamps and shipping containers”, Bianco Manufacturing – “all types of commercial seating”, Master Kraft Manufacturing – “facilities for refrigeration units” (?!), Inn Keepers Supply Company – room furnishings and cleaning chemicals (Maybe these were the origin of the “Holiday Inn scent”. Does anyone other than me remember that? It was clean but very distinctive. The sense of smell is a very powerful memory trigger.),Holiday Press – forms, stationery, Holiday Inn directories, Holiday Inn Magazine , and “a national business in commercial printing” according to Johnson’s book, General Data Corporation – Holidex and other computer-based systems, and General Innkeeping Acceptance Corporation to finance it all.The carpet department at the Instutional Mart of America. Holiday Inn owned the carpet mill as well.

To display these wares, Holiday Inn built a two-story, 300,000 square foot showroom named the Institutional Mart of America adjacent to their new corporate headquarters in Memphis. Time Magazine described a typical offering – “One popular item is a “$25,000 Club Escadrille bar, complete with World War I flying décor, wing emblems, portraits of Rickenbacker and Von Richtofen, and a muted sound track of planes landing and taking off.” (This kind of thing was big in the late 60’s-early 70’s, trust me.) Although the primary purpose of the IMA was to supply hotel furnishings to Holiday Inn franchisees, who flocked there en masse, they had no qualms whatsoever about selling to competitors. “A dollar made that way is worth just as much as a dollar made renting a motel room”, Wallace Johnson said in his book. The Time article cites a billionaire hotelier who “paid (Holiday Inn) a $250,000 consulting fee for help in planning his princess Hotel in Acapulco. ‘We saved him millions’, boasted Wilson.”With awesome packaging like this, I'd eat the stuff every day!

There was an aviation subsidiary called HI-Air that “sold small planes, operated a repair station and provided aircraft storage, leasing and rental (even today the Wilsons are big players in the general aviation business), a record company, of all things (featuring “Larry and the Accommodations” among their artists), a late-night easy listening radio program, “The Dolly Holiday Show”, broadcast on stations all over the country (“Dolly Holiday” in real life was long-time radio personality and vocalist Dotty Abbott.), and then my personal favorites, the food divisions – The Nat Buring Packing Company, which made “King Cotton” brand bacon and hot dogs but also sold them under the Holiday Inn name. (With the Great Sign on the package, who would care about nitrites?) There was also a candy division, which also featured the Great Sign on its packaging. (No nitrites, but maybe a few trans fats. Hey, this was the sixties. These weren’t harmful back then.)The famed "Coffee Host". Personally, I think these would go with any decor.

And then there was Coffee Host - gigantic, wall-mounted ancestors of the Keurig “K-cup”machines, where guests “could enjoy a delightful 4-ounce cup of coffee at any time of the day.” Not only were these available in many Holiday Inn rooms, but folks could buy the machines for home use! (Of course at 4 ounces each, I’d be enjoying about 37 delightful cups a day, but…)Holiday Inn shows off their new acquisition, Continental Trailways, early 70's.

In 1969, Holiday Inn acquired their largest division outside of the Inns themselves. This was Tco Industries, owners of Continental Trailways, at 2,500 buses the second-largest motor coach company, behind market leader Greyhound. Also included was Delta Steamship Lines, a fleet of 11 cruise ships. As Wallace Johnson said, Holiday Inn now “offer(ed) a service in the accommodation-transportation field that is without equal.”The Gulf station at Holiday City, mid-60's. The Great Sign and the corporate offices are in the background.

As impressive as this collection of enterprises was, the massive corporate center that housed them was equally so. Just seven miles from the original Holiday Inn headquarters (a ramshackle plumbing shed next to Wallace Johnson’s office), it was light years away by any other standard. Spanning an 80-acre tract along Lamar Avenue (U.S. Highway 78) in Memphis and populated by over 2,500 employees at its peak, “Holiday City” was a marvel to behold. Among other structures in the complex were the Holiday Inn world headquarters, four stories tall and faced with Italian marble, a state-of-the-art Holiday Inn hotel (where the service was impeccable, as one would expect), and a gleaming prototype Gulf station, pictured above in a mid-sixties advertising photo. The centerpiece of Holiday City was the aforementioned Institutional Mart of America building, and in front of that was a cylindrical, space-age building with floor-to-ceiling glass – the home of General Data Corporation, the subsidiary in charge of Holidex. Not coincidentally, there were drive-up branches of the National Bank of Commerce and the 1st National Bank of Memphis (later called First Tennessee Bank), two of Holiday Inn’s key lenders, on the property. Across the street were some of the manufacturing divisions referred to earlier."Don't you know we're riding on the Marrakech (Holiday Inn) Express?" With apologies to Crosby, Stills and Nash.

The “Great Sign” was rapidly becoming an international icon as well, with Inns “in places as varied as Greece and Swaziland, Switzerland, and Hong Kong, Morocco and Nassau”, according to a 1972 Time Magazine article. There was already a substantial presence in Canada, of course, and in (West)Germany and the UK. Plans were also underway to build the first Holiday Inns behind the Iron Curtain, with a venture to locate 36 inns in Eastern Europe.A late 1960's Holiday Inn room. The TV is far less interesting then the Predicta, but at least it's color!

One thing that stands out in reading Holiday Inn’s early press, and throughout the 60’s and 70’s there was a ton of it, was the company’s faith-based program, something that would be hard to imagine in an international, publicly held company today. A November, 1970 New York Times article mentioned the chain’s practice of having hotel maids leave the Gideon Bibles out on the dresser, opened, as opposed to inside a drawer. In 1967, Wilson hired Methodist minister W.A. Nance to oversee a program where a local “on call” chaplain was assigned to each Holiday Inn, ready to counsel a despairing Holiday Inn guest by phone should the need arise. In a 1977 Saturday Evening Post article, Wilson said the program had received over 100,000 calls and that “3,000 potential suicides” were averted. I’m intrigued by the “open Bible” aspect, and wonder which verse it was opened to – John 3:16? Maybe just a random verse, or one specified by the company or of the maid’s choosing.

By the early 70’s, of course, the Holiday Inn story was widely known, being featured in lengthy articles in a wide variety of publications including the New York Times, the Chicago Tribune, Look, The Saturday Evening Post, Newsweek and others. Most notable of these was a glowing 5,000 word profile in the June 12, 1972 issue of Time magazine, whose cover featured a striking pop-art image of Kemmons Wilson’s beaming face with the Great Sign in the background.An early Holidome. Shuffleboard is wildly underrated, don't you think?

This era also saw a new Holiday Inn innovation. Just as the Filet-O-Fish, Big Mac and Egg McMuffin sandwiches were developed by McDonald’s franchisees, so this was developed by the Holiday Inn franchisees in Wichita, Kansas. Years earlier, the Wichita owners had built a standard Holiday Inn of the day – Two-story, U-shaped, with a pool in the center of the “U”. One day they phoned Kemmons Wilson to tell him about “the improvements they had made to their hotel”. His interest piqued, Wilson flew there the next day, and saw that they “had covered the space between the two story buildings and, by doing this, created an indoor swimming pool and 20,000 square feet more space which really made the hotel outstanding”. Called a “leisure dome” at first, the “Holidome” as it was soon called, quickly became the standard for new and remodeled Inns. Wilson pronounced it a “near miracle”. They were the perfect settings for late-night mayhem on band trips and youth group outings. (Not that I would know, of course…)Waikiki Beach, late 1960's. The largest Holiday Inn in the system at the time it opened.

Not long afterward, however, the landscape changed drastically for Holiday Inn, as it did for American business as a whole. The oil crisis of late 1973, which badly damaged the travel industry, hit Holiday Inn particularly hard. In 1974, according to Wilson’s book, Holiday Inn’s profits dropped by 30 percent and the company’s stock was hammered, falling from $56.00 to $4.25 per share. This spurred Wilson to make some big changes, installing new top management. Bill Walton was elevated to Vice Chairman and assigned the new responsibility of representing Holiday Inn (and the tourism industry as a whole) as a “roving ambassador and industry watchdog” in an effort to underscore the importance of the industry to the U.S. economy. Wilson brought in Roy Winegardner, a native of Cincinnati and one of Holiday Inn’s longest-tenured and most successful franchisees, to run the company. Winegardner brought his protégé Michael Rose (who years later would succeed Winegardner as chairman) on board as they “set about reorganizing and streamlining Holiday Inn over the next several years”, Wilson’s book states.The Holiday Inn inspection team stands aside their fleet of 1968 Chevy Impalas. "Remember to keep those jackets buttoned, men!"

The next few years would see the departure of all three of Holiday Inn’s founding figures. In 1977 Wallace Johnson retired, leaving his corporate position to devote full time to Christian ministry. He passed away in 1988 at the age of 86. Bill Walton resigned in 1981 over the company’s decision to acquire the Harrah’s casino interests, and would later become chairman of Park Inns International, a limited service hotel chain. The founder, Kemmons Wilson, stayed on as Holiday Inn chairman until 1979. That year, Wilson found himself outvoted by his board for the first time when they decided to go ahead with the acquisition of Perkins, a 340-unit chain of family restaurants, against Wilson’s strong misgivings. (“We didn’t know anything about the restaurant business, and we had never made any money off restaurants”, Wilson said. They later dumped the restaurant chain.) No longer able to control his board, and acknowledging to a friend that “ just isn’t fun anymore. It’s time to move on”, Wilson resigned. It was the end of a great era, one fortunately captured in excellent autobiographies by all three men, Wilson’s Half Luck and Half Brains, Johnson’s Together We Build and Walton’s Inn Keeper.
Two versions of the larger metropolitan Holiday Inn - the "round" hotel (location unknown, but several were built) and a conventional version in Oakland, California, near the Bay Bridge.

The leadership transition at Holiday Inn was hardly unique in the annals of American business. The mantle had been passed from the founding generation – the entrepreneurs, the visionaries – to professional managers. Mike Rose, who succeeded Roy Winegardner as chairman in 1983, is quoted in Wilson’s book – “Kemmons could do things I could never do…On the other hand, there comes a point in a company’s development where it needs a less entrepreneurial style of managing and more of a systems approach as it gets bigger and bigger. And I think with Holiday Inn, that was the time where people like myself were brought in to add more value to the company.”Near the Atlanta Airport, early 1970's.

And at the end of 1982, they began to come down...the Great Signs, that is, replaced by conventional internally lit rectangular signs atop wide, black columns. The multi-colors of the neon star gave way to an orange and gold symbolic version, and the trademark “Holiday Inn” script logo was updated and softened – the snappy downstroke of the “y”, for example, replaced with a nice, safe curve. There were ‘good reasons’ for this, of course, as cited in a lamenting October 1982 article by Chicago Tribune columnist Bob Greene – for one thing, they cost 35 grand apiece to build and $6000 a year to operate, whereas the new ones would be far more economical. Also, public taste was apparently becoming more sophisticated - “Holiday Inns has commissioned research that shows its customers now consider the old signs – the ‘Great Signs’ – to be tacky. Tacky and cheap and old-fashioned.” the article goes on to say. (I’d like to have a little talk with these particular survey respondents.) I didn’t happen to read the Greene article or any others that may have appeared on the subject at the time, and from my perspective the Great Signs disappeared in a flash – here one day, gone the next. Like the Baltimore Colts. In any event, the signs were completely gone within a couple of years, and with them a significant piece of Holiday Inn’s identity and an American roadside icon. Kemmons Wilson, who almost never criticized his successors, summed it up best: “It was a hell of a mistake.”
Shining bright at night, circa 1972.

In August 1989, Holiday Corporation (as it was now known) shocked the business world by selling off its flagship brand, Holiday Inn (and the upscale Holiday Inn Crowne Plaza), to British conglomerate Bass PLC, the famous brewer, which also held extensive real estate holdings. Bass would later change its name to InterContinental Hotels Group after one of its upscale brands. Bass paid Holiday Inn shareholders $125 million in stock and assumed $2.1 billion in debt, which would render Holiday “a vastly smaller but healthier company that will concentrate on gambling”, reported The New York Times. The “gambling” referred to here was the chain of Harrah’s casinos acquired in 1978, a deal initiated when Kemmons Wilson was still chairman. Interestingly, the Times article failed to mention the company’s exploding Hampton Inn chain, a limited service chain launched in 1984 that had grown to 300 hotels (there are over 1,700 now), and the Embassy Suites chain. Holiday Corp. management, led by Mike Rose, decided to invest in the new brand rather than undertake the massive chainwide renovations it would take to keep Holiday Inn on top. The new entity was renamed Promus Hotel Corporation. In 1999 Promus, which had picked up the DoubleTree hotel brand along the way, was acquired by Hilton. And for the first time, none of these enterprises would be based in Memphis.

The “remnants of the empire”, the former Holiday City complex along Memphis’ Lamar Avenue, can still be seen, if you know what to look for. The Holiday Inn hotel there has long been boarded up. The Italian marble-faced original headquarters building later became the home of Catherines women’s stores and now sits empty behind a chain link fence, as does the grand Institutional Mart of America, which later became the main headquarters building. The Gulf station still operates as an independent tire shop, and now bears little resemblance to the beauty pictured above. The furniture factories across the street now house other businesses, but hotel note pads are still printed up in the old Holiday Press building, under different ownership. Most of the thousands of drivers who travel that now desolate, desperate strip of road each day haven’t a clue that one of America’s (and the world’s) most vital, vibrant corporate centers once sat there - a place where dreams were hatched.

But Kemmons Wilson had long since moved on. A true “happy warrior”, he remained active as ever after his retirement from Holiday Inn. In early 1980’s he developed one of America’s most successful timeshare ventures, the massive Orange Lake Resort in Kissimmee, Florida, near the gates of Walt Disney World. In the late 80’s and early 90’s he developed a new chain of hotels under his own name – the Wilson Inn and Wilson World properties, with locations in the Mid-South, Florida and Texas. At the time I was frequently in Memphis on business and stayed there numerous times. They were fun, with elegant wall murals in the dining rooms that evoked those of the earlier Holiday Inns, and each hotel featured an old-time popcorn cart - a hat tip to Wilson’s first business of many decades earlier. He continued to maintain a multitude of other ventures in the Memphis area as well – office parks, distribution centers, snack food and printing companies, among others. On February 12, 2003, Kemmons Wilson, a giant of American business who impacted our everyday lives in a way that few could, passed away at the age of 90.

In 2007, InterContinental instituted a re-launch of the Holiday Inn brand – a new logo design, combined with a more aggressive weed-out/ update of older hotels and a stepped-up new building program. The new look represents a final break with the classic Holiday Inn graphic image, to the dismay of some, but it does seem to have been fairly well received by the traveling public. And in recent years, the Wilson family ties to Holiday Inn have been strengthened. Their Orange Lake Resort complex is now marketed under the name “Holiday Inn Club Vacations”, and they also own and operate a number of Holiday Inn hotels, including a new showplace near the Wolfchase Galleria Mall, just a few miles from the site of the original 1952 Holiday Inn. At the grand opening in July 2009, the Wilsons reenacted their famous ribbon-cutting of yore. I visited the hotel recently, and it’s something else – the lobby and ballroom walls throughout are lined with huge, stunning framed black-and-white photos depicting great moments in Holiday Inn history, and the famous Kemmons Wilson/Great Sign Time magazine cover has been recreated as a glass waterfall backdrop. Forget Graceland - this is the must-see next time you’re in Memphis!
Not Rolling Meadows, but Des Plaines will do, right? A fine use of screen block, late 1960’s.

Despite the many Holiday Inns we stayed at on trips, the one that stands out in my memory above all was close to home. I certainly couldn’t say for sure whether it was designed by Bond or decorated by Wells, but the chances are likely as not. It was and is located in Rolling Meadows, a northwest suburb of Chicago, on Algonquin Road near Illinois Route 53, and it opened in 1968. Unfortunately, I don’t have a have a photo of it to show you. The Inn’s restaurant-lounge was called “The Black Fox”, symbolized by a cartoon fox mascot, standing tall, with a top hat, tails, a cane and an “I’ve got the world on a string” look on his face. My grandparents (proud Holiday Inn stockholders, they were) stayed there once or twice on trips to visit us, and when we ate there I can remember the excitement I felt – “Wow, here we are, having lunch at the Black Fox! Is this cool or what?” (It doesn’t take a lot to excite a 7-year old.) The Rolling Meadows location had the good fortune of being just a mile or two from the future site of Woodfield Mall and the plethora of office buildings it spawned , and in the late 70’s the Inn was expanded, doubling the amount of rooms in order to handle the increased business. Many years later I attended a Dun and Bradstreet seminar there, with lunch served in the Inn’s restaurant, and the memories brought a knowing grin to my face. My co-worker was probably thinking “The heck’s up with Dave?” while I was thinking “Wow, here we are, having lunch at the Black Fox! Is this cool or what?” It doesn’t take a lot to excite a 27-year old. Or a 47-year old, for that matter.

If you have Holiday Inn memories of your own and would like to share them here, we'd love to read them!

The photos above are from various Holiday Inn publications of the 60’s and 70’s, the one below is a detail from an early 60’s postcard.And remember, friends – here at Pleasant Family Shopping, our posts are always Sanitized for Your Protection!