J.C. Penney, King of the Soft Goods

Reaching its silver anniversary in 1927, the J.C. Penney Company found many reasons to celebrate. The amount of Penney stores had more than doubled since 1920 to more than 750 locations “in practically every State in the Union” according to the New York Times (close to it - 45 of the then 48 states), and annual sales of nearly $116 million.  

By this time the founder himself, James Cash Penney, had largely turned over leadership of the company to others while he vigorously pursued various philanthropic interests, most importantly a program to enhance America’s agricultural production. A farm boy at heart, Penney donated millions towards the development of dairy cattle herds, soil improvement initiatives and crop science, particularly in the South.  An October 10, 1929 article in the Atlanta Constitution summed it up as follows: “In his breadth of vision, unselfishness of purpose and devotion to the upbuilding of our agricultural interests, Mr. Penney is doing a work which stamps him as one of America’s outstanding citizens”.    

Two weeks after the article appeared, though, came the great Wall Street crash - the prelude to years of hard times for many American individuals and institutions. J.C. Penney the company weathered the depression reasonably well, although it would be five years before it again reached the lofty peak of its 1929 sales of $209 million. For J.C. Penney the man, however, those years were devastating. 

As it happened, Penney literally “gave away” his personal fortune during the 20’s and early 30’s, funding the various farm interests and other good causes to the tune of millions, with little awareness of the increasing gravity of the country’s (and his own personal) economic situation. In 1931, Penney’s lawyers advised him he was “virtually broke”, a story recounted in author Bill Hare’s “Celebration of Fools: An Inside Look at the Rise and Fall of JCPenney”, a rattling read. A number of top Penney managers, in an effort led by Penney president Earl Sams, pooled money to buy the founder a new set of shares in own namesake company, and for the first time in years the company paid him a salary. These were the first steps towards setting Penney, “an incalculable asset to the company that (he) founded and built”, as Hare wrote (in Sams’ voice), back on his feet. “After three years he would cease taking the salary, and by 1940, when the company declared a dividend of $5 per share, he owned 51,000 of them. But the going was rough at first.”

This incident also sparked a much-publicized spiritual awakening in the despondent Penney’s life, which occurred during a visit to the famed Battle Creek (Michigan) Sanitarium, founded by John Harvey Kellogg (brother of W.K. Kellogg, the cereal king). Mary Elizabeth Curry, in her fine book Creating An American Institution: The Merchandising Genius of J.C. Penney, tells the story of one early morning when Penney walked the halls of the sanitarium and overheard a chapel service where an old hymn called “God will take care of you” was being sung. Penney joined the service, “and asked God to help him, and what occurred next was so personally dramatic he liked to call if a miracle. He felt as though a heavy burden, all his fears and worries, had immediately lifted from his shoulders”, Curry writes. Penney himself wrote numerous books and gave hundreds of talks on the subject in the ensuing decades, alongside and as part of his emissary work for the company. Penney was by no means the only “famous businessman - preacher” of his time, but certainly among the best known. Such a combination is relatively rare in high profile business today.

As if the economic conditions of the 1930’s weren’t difficult enough, the Penney Company faced another hurdle in the form of the brewing “Anti-Chain Store” movement. As early as the mid-20’s there were rumblings in the press about the “So-Called Menace of Chain Stores”, as a December 1926 New York Times article phrased it. The company generally offered a “low-key response” to such challenges, according to Mary Elizabeth Curry, preferring to “emphasize service and values for customers”. “It isn’t the purpose and it isn’t the desire for our organization or to destroy the independent merchant. Our job is to serve well a community through our plan of economic distribution”, Curry quotes a Penney executive from 1930.

Push came to shove a few years later with the advent of the Patman Bill, a proposed piece of legislation that would have literally taxed many chain store operations out of existence. Faced with this, the company was forced to take a much stronger tack, and it was Penney’s chairman, Earl C. Sams, who took the lead in the matter, testifying before Congress in 1940.  He laid out Penney’s case against the bill in five main points, as quoted in the landmark book “Chain Stores in America 1859-1950” by Godfrey M. Lebhar: “1) It would destroy the Penney company or any similar company. 2) It would destroy the finest field of opportunity that has ever existed in retailing for the young ambitious man born without family means. 3) It would add to the cost of living for every American family of limited means and would lower the American standard of living. 4) It would deal a staggering blow to the entire economic life of this country and would be especially destructive of the smaller cities and towns for the benefit of larger cities. 5) It would hurt and tax this entire nation for the protection and enrichment of a small minority of self-interested middlemen and of another small minority group of ill-advised marginal retailers.”

Beyond that, Sams attempted to debunk the theory “that chain stores were ruining the smaller communities”. The real culprit, he maintained, was the proliferation of quality, paved roadways that now enabled Americans to travel far afield to shop – no longer were they captive to the ‘local town square’ for the necessities of life. On the contrary, the chain stores had indeed served “as a check on the drying up of towns and small cities” (Godfrey’s words) because according to Sams, “(they) have brought  to these small centers the same values, the same crisp new styles, and the same modern stores that were available in the bigger cities. And the customers know it.” As it turned out, the arguments put forth by Sams and others did much to swing public opinion to the chains’ side. On June 17, 1940, Patman’s “chain store death sentence” bill “suffered the death sentence itself”, Godfrey wrote, when it was killed in committee, never to reach the House floor for a vote.

While J.C. Penney was known (and would continue to be for some time) as a “small town chain” despite its impressive sales and burgeoning store count, there were a growing number of exceptions to the “small town” aspect. In 1931, the company opened its largest store to date in Seattle, a new building on the former site of the Bon Marché flagship department store. (Some years later, Penney’s San Francisco unit would claim the distinction of largest store.) Around this time Penney opened other large stores in key Western cities, including Oakland, Ogden (Utah), Salt Lake City and Reno, all of which “(did) a large volume of business”, as the New York Times put it at the time.

From the mid-30’s to the mid-50’s Penney sales volume, from stores large and small, ballooned from $225 million to over $1.3 billion. An interesting side note, related in a September 1950 Fortune magazine article entitled “Penney’s, King of the Soft Goods”, was the way Penney store managers shared in the company’s good fortune, no pun intended. (Granted, they shouldered a great deal of responsibility, including all hiring, training, advertising decisions and ordering of all products stocked – no merchandise was “pushed” on a Penney store by the home office in those days.) The rewards were substantial, however - “A good manager in a fairly large store can make fancy money” (“fancy” meaning 1/3 of the store’s after-tax net –yikes!), the article said, citing the example of the aforementioned Seattle store’s manager who pulled $125,000 in one year. The plan was later modified to allow assistant managers and other key employees to share in the pie. Still, a good many managers earned $30 to 50,000 a year, and nearly a third (of then 1,600 store managers) raked in at least $15,000 annually – fancy money indeed when nice houses could be had in most corners of America for well below ten grand. 

By 1950 J.C. Penney was a solid third place in America’s department store sweepstakes, behind the mighty Sears, Roebuck & Co. and the faltering yet still formidable Montgomery Ward. One of the keys to continued growth, the Fortune magazine article surmised, was increased presence in the Eastern half of the country. Up to that time, Penney was still thought of as a Western retailer (with “a Penney store in practically town above 5,000 and many smaller ones”) despite recent inroads into some key Eastern and Midwestern markets. “In the East, nobody knows a damn thing about the Penney Co.”, one manager was quoted as saying.  To be sure, building up the Penney reputation to the same level it enjoyed in the West would take time, with rough going in a number of markets. In Camden, New Jersey for example, Penney went head-to-head with Gimbels, Strawbridge & Clothier and Lit Brothers, “(whose) heavy advertising pull(ed) customers away from Penney’s, not toward it”. And in Cincinnati, where Penney opened a stunning new store in 1948, fierce competition from Shillito’s and others kept the store in the red for nearly two years after opening, a most unusual occurrence for Penney.

Over time, Eastern Penney store managers, many of whom started with the company in its native West, would adapt to the unique needs of their new markets.  The article cites the Camden store manager, for example, who began with Penney in Spokane, Washington, transferring to Milwaukee then to Quincy, Illinois before landing at the helm in Camden, a market where a constant barrage of advertising was necessary to drive sales, a situation he hadn’t experienced in his earlier tours of duty.

The manager of the Springfield, Massachusetts unit worked in Penney’s San Francisco flagship store, moving to Santa Barbara before traversing the country to run the Springfield store. New England customers, as a rule, were very different from those in California. “In buying curtains a California customer wants to know first how wide the ruffle is, how full it is, and what the colors are; the Springfield customer asks whether the organdy (a type of fabric often used in curtains) is permanently finished, how securely the ruffles are sewed on and how long it will last”. Another cited example concerned towels, then as now one of Penney’s strongest product lines. Whereas bath towels typically outsold face towels 2 to 1 “presumably because a bath towel can serve either purpose”, in the Springfield store the opposite was true. The manager was undecided as to “whether the frugal New Englanders use face towels after they bathe, or whether they are just trying out Penney face towels before shooting the moon and buying the larger size.” (They also tended to say “ayuh” when responding affirmatively to questions, a point the article curiously omits.)

In any event, Americans were buying more face towels, bath towels, washcloths and all manner of other linens from their local J.C. Penney store than anywhere else, in addition to clothes for the whole family. “King of the Soft Goods”, indeed, but big changes lie ahead.

The first four photos above appear by courtesy of the J.C. Penney Archives at the DeGolyer Library at Southern Methodist University, the last is from an original slide in my collection. From the 1950’s, the following locations are depicted: Stockton, Long Beach and Glendale, California, followed by Rockwood, Tennessee (apparently a much older store, refaced) and Albuquerque, New Mexico, with a very nice hat tip to the area’s traditional adobe architecture. Note the gas stations represented in the picture – a Phillips 66 sign right next door, with a Conoco station across the street from it. Across the street from the Penney store itself, reflected in the store windows, is what appears to be a “Teague” Texaco. If you have a free week this summer, you can read about those and more here.      

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”.

A&P Goes to War!

Probably not the war you’re thinking of, although World War II fits in at roughly this point in the timeline. No, this was a war of A&P’s own – one that started earlier and ended much later.

As far back as the mid-1920’s, there were grumblings about the growing power of “the chain stores”. Most of this concern, understandably, was on the part of independent grocers, who by the mid-1930’s were looking at a full third of their potential market going to one competitor – A&P. Predictably, it wasn’t long before politicians on a variety of levels took notice. As a result, throughout the 1930’s, over half of the individual states passed laws regulating the operation and expansion of chains, and in nearly all cases a “chain store tax” was levied for good measure. By necessity, A&P took these as they came, complying quietly in nearly all cases.

As far as A&P’s business was concerned, they had weathered the Depression far better than most companies. Their aggressive pricing policies accounted for one reason, but another key factor was George L. Hartford’s insistence on short-term leases for all A&P stores. Very short term, in fact – the typical A&P store lease was for one year with nine one-year renewal options. In later decades this policy would come back to bite A&P in a big way, costing them many prime early shopping center locations, but the flexibility it gave the company to close or relocate unprofitable stores was an asset in the darkest days of the 1930’s.

Another development was the conversion to supermarkets. Faced with upstart competition from the likes of Michael Cullen, a former A&P employee who had started a chain of giant, self-service food stores called “King Kullen”, and others, it became evident to John Hartford that A&P would have to jump into the fray in order to remain competitive in their key New York/New Jersey markets and elsewhere. After considerable egging on by his brother, George Hartford, the conservative one who controlled the purse strings, agreed to a 100-store experiment with the newfangled supermarkets in 1936. Success soon caused the experimental number to be upped to 300. Before long, the “experimental” designation was dropped altogether, and supermarkets became the way forward for A&P.

In early 1938, according to the 1970 Progressive Grocer A&P Study, while supermarkets constituted just 5 percent of their store base at that point, they were contributing 23 percent of sales and nearly half of the company’s profits. As author William I. Walsh points out in his history of the company, “The Rise and Decline of the Great Atlantic and Pacific Tea Company”, although A&P didn’t come up with the supermarket idea, the fact that the company opened the first supermarkets to be seen in many locales often led people to credit A&P with the concept.

Further adding to the excitement, A&P decided to enter the publishing business. For some years the company regularly issued an illustrated giveaway recipe booklet, called simply “Menus”, but would now introduce a full-fledged women’s magazine, to be entitled Woman’s Day. The decision was spurred on in part by the success of another magazine, The Family Circle, which was then reaching nearly 1.5 million households through five major grocery chains, according to an October 1937 Time article. A&P’s new magazine would carry “menus and home hints”, but “no fiction or film gossip as does Family Circle”, according to Time. Twenty years later, A&P would sell the magazine off to an independent publisher, who made it available to all grocery outlets and other retailers. Of course, Woman’s Day and Family Circle remain staples of supermarket checkouts everywhere, alongside some distinguished longtime competitors and some shall we say “less uplifting” publications. (Personally, I miss the “Weekly World News”. You just can’t find solid news reporting anymore!)

On a more somber note, the “anti-chain store movement” was rapidly growing in intensity by the late 1930’s. By this time, the movement had an official face. Congressman Wright Patman, a firebrand who was aptly nicknamed “the fighting Democrat from Texas”, had taken the issue up as his personal crusade, and his sights were set directly on the good old A&P. In 1936, he had won passage of the Robinson-Patman Act, still a cornerstone of U.S. commercial policy today, which essentially prohibits manufacturers from selling the same item at different prices to different entities, in effect leveling the playing field for smaller retailers who are unable to purchase at the volume level of their larger competitors. (I’m massively oversimplifying this, for space reasons. And in the interest of keeping you awake.)

Two years later, Patman introduced a new bill to curb the influence and spread of chain stores, (accurately) nicknamed the “Death Sentence Bill”. The centerpiece of the bill was a national chain store tax of $1,000 per store, but “with a final clincher”, as the Progressive Grocer study put it – “the total tax would be multiplied by the number of states in which the chain operated”, a provision that would have meant utter devastation for A&P. The numbers in A&P’s case would have added up to a half a billion dollar tax for the company for 1937 – 60 percent of total sales and a mere 6,000 percent of profits. Bye, bye Tea Company, along with Safeway, Kroger, Woolworth and host of other household names. Even cooperative organizations such as IGA would have been under threat, according to the study. Fortunately, Patman’s bill never made it out of committee.

It wouldn’t remain quiet for long, however. In the early 1940’s, the Justice Department’s Antitrust Division filed two landmark lawsuits against A&P, one in Dallas in 1942 and a second in Danville, Illinois, in 1944. For the second suit, the list of charges filled ten pages, which Progressive Grocer condensed to a page and a half and I’ll further boil down to a few lines (This is “Web 2.0”, right? Whatever the heck that means.) as follows. The main points of the lawsuit alleged:

· That A&P purposely ran stores at a loss to drive out competition.
· That A&P held a “partial monopoly”, because of “illegal” practices in manufacturing, wholesaling and retailing.
· That A&P was able to obtain preferential allowances and discounts in violation of the Robinson-Patman Act.
· That A&P took profits from its manufacturing plants and used them to subsidize its retail stores.
· That A&P’s produce subsidiary, The Atlantic Commission Company, which sold to other chains as well, dominated or controlled markets, overcharging or selling inferior products to competitors.

A&P lost the case and a subsequent appeal, eventually agreeing to pay a $175,000 fine and to dismantle the Atlantic Commission Company. The judge who handled the case still had words of praise for A&P: “To buy, sell and distribute to a substantial portion of 130 million people (the U.S. population at the time) one and three-quarters billion dollars worth of food annually, at a profit of 1.5 cents on each dollar, is an achievement one many be proud of.”

Yet it wasn’t over. In September 1949, less than a year after the previous case finally ended, the Attorney General of the United States filed a new lawsuit – this time calling for no less than the Breakup of The Great Atlantic and Pacific Tea Company. Rumors were floating that the government was proposing a plan to split A&P into seven separate regional companies. (For those of you who are at least my age or maybe a few years younger, this may “ring a bell”. Get it? Ok, I’ll stop.)

A&P had used advertising to a limited extent in their previous struggles to help rally public opinion to their side. Exasperated that they were facing this situation yet again, they declared an all-out P.R. war this time around. In late 1949, a series of full-page newspaper ads were taken out in (according to Time Magazine) some 1,800 papers across the country, laying out A&P’s side of the story in painstaking detail.

By far, the most intriguing of these ads appeared on November 11, 1949, featuring testimonials from several of the company’s competitors, undertaking an impassioned defense of A&P. “Who hollered for Uncle?” “We Agree With A&P” “We Don’t Want the A&P Put Out of Business”, and so on, followed by detailed explanations of their positions. The motivations were wide-ranging –including a genuine respect for A&P as a major food supplier for millions, and concern for their tens of thousands of employees. Several of them started their careers with A&P before striking out on their own, the sentimental ties still evident. And then there were the objections on principle – as a “threat against our system of free enterprise”, a threat to growth aspirations of their own. Or perhaps the objections stemmed from a sense of being exploited, regardless of the potential financial gain for them should A&P go down.

The strategy worked. Before long, letters began pouring into Washington D.C. from hundreds of consumers, upset that the government was threatening to mess with “their A&P”. It soon became evident that a majority of people were convinced that the government’s case against A&P lacked merit. The case slowly faded away, ending in 1953 with a consent decree that called for a handful of wholly inconsequential changes at A&P.

Sadly, the one person who no doubt did the most to help A&P weather these storms passed away before their final legal victory. At age 79, John Hartford was still as active as ever, running A&P along with his brother and sitting on a number of other corporate boards. On September 20, 1951, Hartford collapsed and died moments after attending a Chrysler Corporation board meeting in their famous namesake building in New York City. It would be years before the full magnitude of the loss to A&P, in terms of ingenuity, judgment and fine-tuned empathy for the customer, would be completely realized.

At least now, though, A&P was finally free from all of the legal distractions and could chart its own destiny again.

The photos above are all from Chain Store Age, and from top to bottom, show – an unknown exterior from 1941, the meat counter from the Rockville Centre, Long Island, NY store from 1937, an exterior view from Birmingham, Alabama in 1939, an interior from Pittsburgh in 1937, exterior and interior views from Asbury Park, New Jersey (Or is that Granada I see? No, just Asbury Park.) in 1937, and finally two views of another Birmingham unit from 1939, from the Five Points shopping center, with Scott 5 and 10 next door.

Pictured below are John and George, the brothers Hartford, in contrasting styles of dress and matching Bakelite telephones, as photographed for Life Magazine in 1949. Two of the 1949 ad campaign newspaper pages can be seen in the background. (Thanks to Richard of the great Viewliner Ltd. site for the tip on the Google Life Magazine archives. Some fine stuff there!) Lastly, for your reading pleasure, are the two ads pictured behind the Hartfords. Click to enlarge and read.

Publix, Wonder of Winter Haven

America’s greatest business stories are the result of gigantic mergers and acquisitions. Just look at the titans of our time – AOL Time Warner, Daimler Chrysler, Suxco…an impressive group, don’t you think? These companies all were the product of grand executive vision – to create synergies, to optimize efficiencies, to be proactively active, maximizing core competencies and enhancing shareholder value while at the same time improving the drab, wretched lives of all “stakeholders” in a manner consistent with the company mission statement. Inspiring stuff, huh?

Okay, anyone who has read this site for a while has probably figured out by now that the preceding paragraph is ridiculous and doesn’t reflect my views at all, and I suspect not many of yours either. (And I know, “proactively active” doesn’t even work grammatically.) No, to me, the greatest business stories center on the companies that started from scratch – little to no capital or connections, just hard work, persistence, heart, an attitude of service, and a dream – very often the dream of one person. Eventually others are recruited to help fulfill the dream, and the result makes history. The story of Publix and its founder George Jenkins is a prime example of this.

Born in 1907 and raised in Harris, Georgia, a tiny rural community 90 miles southwest of Atlanta, George Washington Jenkins, Jr.’s family operated a small general store. At the age of 12, Jenkins began working there on and off, pushing a broom, stocking, and doing occasional counter duty. It was there that he learned the importance of quality service and keying in on a customer’s likes and dislikes, although as he later admitted, he had no designs on a retailing career at that point.

At that time, the economy of that area was almost fully dependent on a single crop, cotton. In the early 1920’s, the economy of the deep south and central Georgia in particular was utterly devastated by the boll weevil, a type of beetle that descended on the nation’s cotton growing areas like an insidious, relentless plague. By 1923, the entire area was in the midst of a deep depression, years before “The Depression” hit the country as whole. Jenkins’ father’s store, owed $ 50,000 in customer accounts he would never be able to collect, was wiped out. The elder Jenkins moved to Atlanta to start up a small grocery store - on a cash basis, of course. The rest of the family stayed behind in Harris, including George Jr., who had two years of high school left to finish.

At age 17, Jenkins moved to Atlanta, but ironically would never work in his father’s new store. Instead, he worked a series of short-term odd jobs – cab driver, lumber hauler, shoe salesman – while attending electrical engineering night classes at Georgia Tech. He then got a job that he stuck around in just a bit longer than the others, clerking at a local Atlanta Piggly Wiggly store. After a couple of months behind the counter, he began a series of fill-in assignments for area Piggly Wiggly store managers. After six months on the job, a local real estate entrepreneur talked young Jenkins into quitting his grocery job to try his hand at real estate, where he promptly sold a house at a nice profit. (It would prove to be his only sale ever.) Soon afterward, this real estate “mentor” convinced young George that their fortunes lie in Florida, where the real-estate market was allegedly reaching 1849 Gold Rush proportions. With $11 in his pocket, Jenkins made the trip, ending up in Ybor City, a predominantly Hispanic section of Tampa. His real estate-mogul dreams soon dashed along with the prospect of hanging on to his eleven dollars, Jenkins managed to locate some old friends who now lived in Tampa who gave him a place to stay. The Florida trip had become just a vacation, and he fully intended to hitch a ride back to Atlanta after a week or so.

Before that week ended, though, Jenkins would reach a turning point in his life. His Tampa friends brought him to meet a man “who just happened to own 14 Piggly Wiggly stores in the area”, as Pat Watters’ book “Fifty Years of Pleasure” puts it. Jenkins mentioned his experience working at the Atlanta Piggly Wiggly, prompting the chain owner to offer him a job, which George accepted as a means of earning enough money to resume classes at Georgia Tech the following fall. Starting at 15 bucks a week , again “as a broom pusher and a stock clerk”, Jenkins was soon promoted to manager of a St. Petersburg store at more than double the salary, plus a percentage of the store’s gross. The “Fifty Years” book cites that under Jenkins’ leadership, the store’s sales increased from $1300 to $6600 a week with a year’s time. Shortly thereafter, he was put in charge of the chain’s largest store, their $7000 a week Winter Haven unit, where he would spend the next four years.

The changing economic times ultimately had a negative effect on his store’s sales, and Jenkins saw his pay cut. In 1930, the entire group of stores was sold to an Atlanta-based operator, who “never took the time to visit the store”, as Jenkins would later mention in a 1978 speech. Frustrated with his new boss’ hands-off approach, Jenkins decided to travel to Atlanta to meet with him in person there. Arriving at the company headquarters, Jenkins was told the owner was in an important meeting, and would be unable to see him. Overhearing the boss’ conversation through the door, George soon discovered what the topic of the “important meeting” actually was – his golf game! Offended more by the owner’s negligence than by the personal slight, Jenkins resolved then and there to go into business for himself. The incident provided a huge lesson for Jenkins, one that would profoundly influence the philosophies behind the company he would soon start up.

Resigning from Piggly Wiggly upon his return to Winter Haven, Jenkins took $1300 he had been saving for a new car and used it to open his own grocery store – right next door to the Winter Haven Piggly Wiggly. His former employer had asked him to stay on one more week to train the new store manager, and George agreed. During that final week, he took every opportunity to tell his loyal customers about his plans for the “store next door”, inviting them to come check it out after he opened up. Most of them did, and before long, due to the loyalty of those customers and several months of Jenkins’ aggressive pricing approach, "the Piggly next door wiggled no more”. (Poetry fail.)

Jenkins borrowed the name for his new store from the Publix theatre circuit, a then huge chain of movie houses controlled by Paramount Pictures (the company was actually called Paramount-Publix Corporation for a brief time in the early thirties) that included such legendary theatres as the Paramount Theatre (Times Square, NY), the Brooklyn Paramount, the Chicago-based Balaban and Katz circuit, and a host of other theatres in towns large and small across the entire country. In 1935, the company became one of the more spectacular casualties of the depression, a big reason why we associate the name “Publix” with supermarkets instead of theatres today.

In 1935, five years after opening the first Publix, Jenkins opened a small second store in Winter Haven and incorporated his business as Publix Food Stores Corporation. In the years immediately following, he operated those two stores and also began to travel a bit to investigate a new food retailing concept – the supermarket. Delighted with the concept itself - huge volume, self service, etc. – but turned off by the barren, shabby appearance of most of the early supermarkets (most of which were former factories or warehouse buildings), Jenkins began to devise plans for a new kind of store - a full-line supermarket with an unprecedented level of shopping comfort and eye appeal, that he termed “America’s Finest Food Store”.

Based on everything I’ve read about supermarkets of that era, I think it’s safe to say that if it wasn’t “the finest”, you could probably count its equals on one hand and still have some fingers left. With $25,000 in proceeds from mortgaging some orange groves he owned, Jenkins opened his new showplace in Winter Haven in 1940. The new Publix was a marvel to behold, with an art deco/streamline moderne exterior design finished with white stucco and black marble, a masonry and glass-block tower and huge plate-glass windows. The “Fifty Years” book cites another first, “something never seen in Florida for a grocery store –a parking lot.” Inside were wide, uncluttered aisles and “high-style decor”, as Chain Store Age would later refer to it. The most exciting features of the new store, in the mind of the public, were the electric-eye doors, rare anywhere in the United States at that time and absolutely unheard of in small-town central Florida before then. Jenkins himself considered the store’s air conditioning system to be an even more important feature, second only to the supermarket concept itself. The new Publix became a veritable tourist attraction. Soon after its opening, Jenkins sold off the two older stores.

Both the “Fifty Years of Pleasure” book and the text of the above-mentioned 1978 speech relate a moving story about Jenkins, sitting on the steps of the First Baptist Church, directly across the street from his new store on the eve of its opening: “I looked across the street at that beautiful store and said to myself ‘There will never be another one as pretty as that. This is the finest food store that can be built’”. Something tells me that he was also thinking into the future, beyond that one store, even though he wouldn’t be able to open another one for nearly five years and Publix was the furthest thing from ‘a chain’ at that time. I’ll take that over “synergies” any day.

The pictures, showing the 1940 Winter Haven Publix, are from the Florida Photographic Collection.

Woolworth's - The Largest Variety Store

On an icy winter’s night in 1963, the downtown Denver, Colorado Woolworth’s provides a warm oasis for shivering Christmas shoppers. Newly expanded to a huge 174,000 square feet, this store scarcely fit the traditional five-and-ten/dime store image with gold-lettered “red front” signboards above a quaint storefront that the name Woolworth’s conjures up to this day. (This impression persists despite scores of intricate art deco-exteriored Woolworth stores that opened in the 30‘s and 40’s.) If anything, the Denver store’s clean lines and imposing scale resembled the sprawling suburban mall department stores that by 1963 had come to symbolize the American Way.

Dubbed “The World’s Largest Variety Store” upon its grand reopening in October 1963, the downtown Denver location featured the typical Woolworth’s lineup of the time, albeit more of it. The store boasted “two miles of display counters” within “58 shops and departments offering more than fifty thousand items of goods for the entire family and whole home, ranging in price from a few pennies to upward of one hundred dollars”. These departments carried apparel for the whole family, housewares and home furnishings, garden, pet, camera and music shops, and of course toys. Also in-house were a “utility bill-paying station” and total restaurant/luncheonette seating capacity of 700 (!) people. Within the restaurant area was a sandwich counter, named the “Chuck Wagon” in salute to “Colorado’s famous livestock industry”. Of course, the western theme was stretched a bit with the addition of hoagies and pizza to the menu. (I was tempted to say “git along, little hoagie”, but thought better of it.)

One thing becomes obvious when reading Woolworth’s press releases from that time. Despite having launched a new chain of discount stores the previous year, Woolco, large variety stores like the Denver unit were the company’s pride and joy. They would continue to be the organization’s main focus for many years to come. Woolworth’s main competitor, S.S. Kresge Company, took a very different attitude. Kresge made it abundantly clear that their Kmart discount chain, also introduced in 1962, would be that company’s top priority. Within just a few short years, the Kmart program would have a transformative effect on the Kresge company, as it eventually would on mass merchandising in general. By comparison, Woolworth’s approach to Woolco seemed more tentative.

The story of the F.W.Woolworth Company is deeply woven into the American cultural fabric. Frank Winfield Woolworth’s company was founded with a single store that opened in Lancaster, Pennsylvania in 1879. Initially known as the “Great 5-cent Store”, it wouldn’t become a “five-and ten” until the following year, when the company began to carry higher priced goods. By 1886, the company had grown to seven stores, which now featured the soon-to-be-famous “red front” facades. That same year, Woolworth opened his new company headquarters in Manhattan. By 1900, Woolworth was operating 59 stores with total annual sales of $5 million. In 1909, the first British Woolworth stores (“three and sixes” as opposed to “five-and-dimes”) were opened. Woolworth sought unique ways to be of service to his customers, and one of the more successful ones was to introduce fabrics and other fine goods from Europe into his stores, at prices the general public could afford. Prior to that time, these goods were out of the reach of many American pocketbooks.

A huge advance in the company’s growth came in 1912, when Woolworth consolidated his 319 stores with three northeastern variety chains - S. H. Knox and Co., F.M. Kirby and Co., E.P. Charlton and Co., and the stores previously held by his brother Charles S. Woolworth and by W.H. Moore. The new company was formally incorporated on January 12, 1912 as “F.W. Woolworth Company”, with a total of 596 stores across the entire country, and stock was offered to the public. The Woolworth organization was in place, and through much of the 20th century would be a dominant force in American business. Woolworth and The Great Atlantic and Pacific Tea Company became widely acknowledged as the twin behemoths of retailing. A year later, the magnificent 60-story Woolworth Building would open in New York City, the tallest building in the world at the time. President Woodrow Wilson ceremonially turned on the building’s lights for the first time, from a telegraph key in the White House.

The company continued to prosper despite Frank Woolworth’s passing in 1919. Ten years later, Woolworth would celebrate its 50th Anniversary with over 2,200 stores and $303 million in sales. Three years before that, in 1926, the first Woolworth units had opened in Germany, which would prove to be an important market for the company. The ten-cent price cap was doubled to twenty cents in 1932, and three years later, price ceilings would be done away with altogether. Woolworth’s would begin to stock all manner of goods, even featuring jewelry in some locations.

In the 1950’s, two major changes in American retailing forced themselves on Woolworth’s, and the company was smart enough to go with the flow on both. The first was the “self-service” trend, and the second was the shift away from downtown store locations toward suburban shopping malls and strip centers. In the mid-50’s, Woolworth closed in on nearly 3,000 stores, and many older stores were modernized. Another key international market, Mexico, was entered in 1956.

Through the entire decade of the 1950’s another trend gained traction, and by the early 60’s was akin to an unstoppable train – the emergence of the large, suburban discount store. By then, the success of the northeast-based discount chains – E.J. Korvette, Zayre, Topps and many others, along with the challenges this new type of store would present to the variety chains had become the cocktail conversation of the retail industry. In a September 1961 New York Times article, Woolworth president Robert C. Kirkwood outlined his company’s plans to open a nationwide chain of department stores under the name “Woolco”. Plans for 17 initial stores were announced, with the first store to open in Columbus, Ohio in the spring of 1962. Mr. Kirkwood told the Times “It is our goal to have the largest chain of discount stores in America”.

As it turned out, Woolworth wasn’t alone in that goal.

The Woolworth promotional photos above are from 1963 and 1964. The first four depict scenes from the Denver, Colorado store mentioned above, showing the store exterior, ladies’ and mens’ departments and the “Chuck Wagon” sandwich counter. The rest of the photos are from various Woolworth stores. Shown are the home décor section, with mirrors, tasteful paintings and groovy “starburst” clocks, followed by the bedding, paint and sewing departments.

The last three photos show the only departments that would have concerned me in my youth. (Well, I guess I’d have to count the restaurant as well!) The “music shop” and record department, which features two Kingsmen (“Louie, Louie”) albums and the soundtrack to the Beatles’ “A Hard Day’s Night” film (half of that album was made up of instrumentals – I had the 8-track in the early 70’s), the very colorful toy department, and finally, the place I would have been guaranteed to spend every possible minute - and every possible dime I could wheedle out of my folks – the book department, with its fine selection of Mad paperback books. These were collections of articles that had previously appeared in Mad Magazine. If you were into those, and precious few my age weren’t, click on the enlargement and dig the classic titles – “Fighting Mad”, “Son of Mad”, “The Mad Frontier”, “Mad in Orbit”, “The Organization Mad”, and among others, my all-time favorite – “We’re Still Using That Greasy Mad Stuff”. In an affirmation of my good taste (or lack of it), this book appears in the 1966 movie version of “Fahrenheit 451”, where it's burned up along such other classics as Jane Eyre, Othello and Wuthering Heights.

I know. “News you can use”, right?