I hope that you’ve had a Happy Thanksgiving! Maybe you had a chance to watch the Macy’s parade or the broadcast of "Miracle on 34th Street" that followed. The pictures above are of Korvette’s 34th Street store which opened in 1967 in New York City’s famed Herald Square, right next door to Macy’s famous flagship. Two years earlier, Korvette had announced its intention to take over the Saks-34th Street store (which was a sort of outlet or “basement” store operation Note: See comment section for a correction regarding this statement) from Gimbel Brothers, Saks’ owner at the time. The first photo is an artist’s rendering of the original concept as announced with great fanfare at a 1965 press conference. Korvette’s plan as announced called for a complete renovation to the existing eight story building with a grand “neo-classical” façade and an additional seven story office tower built on top to house the company’s corporate offices. The second rendering and photo (from Isadore Barmash’s excellent Korvettes history book) show the store as it actually opened, vastly scaled-down from the original plans. The office tower addition did not materialize, and instead of the neo-classical façade, a series of alternating narrow marble strips and black spaces were installed to basically “cover up” the Saks façade, resulting in a modern but definitely odd appearance. The store was a moderate success, but came nowhere close to duplicating the magic of the 5th avenue store that Korvette had opened earlier. The whole thing was a metaphor (Ok, you can roll your eyes now. My apologies.) for what was happening to Korvette in general.
In 1966, Korvette merged with Spartans Industries, who at the time owned a very successful private label clothing manufacturer and two underperforming department store chains known as Spartan and Atlantic. Spartans was founded by Charles Bassine in the early 1940’s as Sparta Mfg. Co., with a single sewing plant in Sparta, Tennessee. Bassine, a New Yorker, was one of the earlier manufacturers to realize the advantages of locating in the South, where labor was cheap, land was plentiful and local governments were willing to bend over backwards to offer freebies if it would serve to build their industrial base. By the early 1960’s, Bassine’s company was raking in tens of millions each year making private label shirts and blouses for Sears, Penneys and Montgomery Ward.
Bassine, who had recently become a friend of Korvette founder Eugene Ferkauf, was the one Ferkauf turned to fend off the Coan challenge and to help stabilize Korvette’s business, and the marriage became official in September 1966. Spartans, although only half of Korvette’s size, became the surviving entity with Bassine as chairman and Ferkauf staying on as President.
By the mid 60’s the Korvette organization was developing serious cracks, and the merger did little to remedy this. Sales growth had slowed down, the furniture, carpet and supermarket entities were dumped, and the company struggled to find a consistent identity that consumers would identify with. Fashion became the company’s focus, but was also its biggest problem, with the cheaper Sparta goods having replaced Korvette’s earlier private label lines. The two-story suburban store design also led to an unforeseen and vexing problem that was only discovered over time – the stores were patterned after the more upscale department store mode, where two or more levels are commonplace and escalators aren’t compatible with shopping carts. This goes against the grain of the department store shopper’s mindset, where one can “load up” their carts with bargains as they pass by. Without carts, people tend to be more selective, if only so they don’t have to lug the stuff around. To cite a modern day example, Kohl's has keyed into this and wisely offers carts.
In 1968, Eugene Ferkauf resigned and cut all ties with Korvette. The “Duke of Discounting”, a man who done a great deal to create and popularize an entire retail category was gone. From here, the Korvette story becomes a long series of management changes and failed merchandising strategies. New store growth was sharply cut back. Plans to expand into Florida, long a standard move of northeast-based retailers, were scuttled. In a very controversial move in 1971, Bassine sold control of the entire company to Arlen Realty and Development, which was run by Bassine’s son-in law, Arthur Cohen. Arlen was one of America’s largest real estate developers at the time, with major holdings in New York City and other top markets, and had built many of Korvette’s stores over the years.
The early 1970’s brought more attempts to turn the company around, including shortening the stores’ moniker from “E.J. Korvette” to simply “Korvettes”, discarding the distinctive script logo in favor of a more conventionally lettered version. The biggest problem continued to revolve around the clothing lines, where an attempt to go upscale and compete with Macy’s head on proved to be disastrous. Facing increasingly severe competition upline from Macy’s and their ilk and downline from Kmart, the company would never again be able to effectively answer a fundamental question – “Why would someone shop at Korvettes?”
To make matters worse, Korvettes’ parent, Arlen Realty, found itself in the midst of its own downward spiral, due to the very difficult real estate economy of the early 70’s and a horrendous loss incurred from the shutdown of the moribund Atlantic stores chain. In April 1979, one last merger took place, when the struggling Arlen sold Korvettes to Agache-Willot, a French retail conglomerate. Agache-Willot kept Korvettes on a short leash, immediately pulling them out of Chicago and the other non-East Coast markets and paring down the store count in the other areas. It all came to naught, and Korvettes closed its doors for good on Christmas Eve 1980.
Gene Ferkauf would engage in a few small-scale retail ventures in the years immediately following his departure from the trendsetting, game-changing company he founded. Alive and well in his eighties, he and his wife Estelle live in New York City and are actively involved in a number of charitable causes.
