The Modern Side of J.C. Penney

“Picked at random, a single J.C. Penney Co. store can be a remarkably unimpressive establishment.” So went the opening line of a long and generally laudatory September 1950 Fortune magazine article about the then nearly 50-year old retailer. The statement was true enough of the majority of J.C. Penney stores of the day. While certainly not unpleasant, a “low-key handsomeness” was about the most one could credit to the typical Penney store design.

But scattered among their 1,600-plus stores at the time were a number of bonafide architectural gems –fine examples of deco and moderne styling that undoubtedly stood out from their respective city blocks at the time. A fortunate few of these buildings, including the two pictured above, survive today – though neither one has housed a J.C. Penney for years. One thrives as part of a major specialty retail chain, while the future of the other is less assured. In the first photo, the rented searchlight (note the name of the company, “Film Ad Co.” – with all the movie premieres in town, these were probably fairly easy to come by in the L.A. area) is on site and ready to go for the grand opening of the new Penney store at the corner of 3rd Street and Wilshire Boulevard in Santa Monica, California, which opened in 1949.

This store was designed by Milton L. Anderson, a little-known Los Angeles-based architect, who also designed fine-looking Penney stores in San Bernardino and Burbank around the same time. Like his more renowned counterpart, Stiles Clements (the store directly faced a Clements-designed Ralphs grocery store across the street), Anderson designed in the Spanish Colonial Revival style in the late 1920’s, a popular Southern California architectural motif in the era just prior to the advent of art deco/streamline moderne, which he later embraced.

The specific style of this building, according to a 2006 City of Santa Monica Landmark Assessment and Evaluation report, is classified as Late Moderne, a school that “borrowed the horizontality, curved canopies, and curved corners from the Streamline Moderne style, and the flat roof, window bands, and boxy form of the International Style… Broad cantilevered rectilinear or curved canopies were also a character-defining feature… (as were) soaring sign pylons that dominated (a) building’s facade.” The report underscores the store’s most notable design feature, the “cylindrical fluted tower on the building’s northeast corner that rises above the roofline to form a prominent anchor to the retail store building as seen from Wilshire Boulevard and 3rd Street.”

The store (which replaced J.C. Penney’s original 1930’s-vintage Santa Monica unit at 1328 3rd Street, just up the block) both predated and survived Penney’s “full-line era”, roughly the early 1960’s through the early 1980’s, when the company sold large appliances, sporting goods, automotive and other assorted hard goods in addition to the Penney staples of clothing, linens, towels and the like. In all likelihood, the Santa Monica store, due to its location and relatively small size, never ventured far beyond the company’s traditional soft goods offerings.

In 1965 a three-block area of 3rd Street, encompassing the Penney store and other retailers, was closed off for conversion to a pedestrian mall. Known since then as the “3rd Street Promenade”, it remains successful today, no doubt owing to its limited scope, successfully avoiding the pitfalls of overreach that have doomed conversions like it in other cities.

The store survived under the Penney flag into the mid-1990’s, a point when the vast majority of these had long since been supplanted by large, regional mall-based stores. (Amazingly, a similar store hung in there all the way until last summer.) Since 1998, the store has been a prominent location for Banana Republic, the upscale banner of Gap Inc. The famous façade has been preserved (sans the Penney signage, of course), and $7 million worth of interior renovations were carried out. As of this writing, it looks like The Gap is putting this one up for sublease. Perhaps another supplier of high-end khakis will show some interest in this beautiful building.

Even more striking, perhaps, is the second store pictured, which opened the same year at 5930 Easton Avenue (later renamed Dr. Martin Luther King Drive) in St. Louis, Missouri, in an area of town known as the Wellston Loop. Once again, Penney engaged the services of a local architect, William P. McMahon & Sons, and once again a stunningly-designed building resulted.

McMahon, a St. Louis native, had already enjoyed a long career at that point, having designed homes, churches and various commercial buildings around town beginning in 1907. By the 1930’s he was working in partnership with his son, Bernard, a recent architectural school graduate who favored Modernism and would spend time in California, where streamlined design reigned supreme. By the time the Penney project rolled around, Bernard had long since mastered the form. Not to be outdone, the elder McMahon brought his own Modernist sensibilities to the job, honed through aerodynamic design work he did for a military aircraft manufacturer during World War II, when building design commissions were slow in coming.

The Wellston J.C. Penney store is considered a prime example of the International Style of Modernism, according to a 2006 report submitted to the National Register of Historic Places. It “typifies (the International style) through its rejection of ornamentation, incorporation of horizontal ribbon windows with cantilevered surrounds and dependence on regularity to organize the primary façade rather than axial symmetry.” (The difference between ‘regularity’ and ‘symmetry’ being “lots of windows or other structural features placed at regular intervals” as opposed to “the strict symmetry of a Greek temple”, the historical precept upon which much architecture was, and is, based. This excellent series of articles explains the concept better than I could ever hope to.) The building’s crowning feature, literally and figuratively, is its floating partial canopy, with cutouts that “frame views of the sky.”

Penney had opened their first St. Louis store two decades earlier, in 1928, at 2604 North 14th Street, and two others quickly followed – at the corner of Morganford and Gravois in 1929, then at 5976 Easton Avenue (doors away from the featured store) in 1930. This gave the company locations “north, south and west of downtown” respectively, according to the NHRP report.

Interestingly, “Unlike St. Louis’s three largest department stores, Stix Baer & Fuller, Scruggs-Vandervoort Barney and Famous Barr, J.C. Penney chose not to build a central store downtown. Instead, Penney’s focused on a decentralized model of retailing along the lines of Woolworth’s and other national chains by locating multiple in neighborhoods where its customers lived”, the report says. (This wasn’t necessarily true of Woolworth’s or Penney’s in other large cities, though, as both chains had a number of major downtown flagship stores by this time. But St. Louis was an exception.)

The Wellston store’s location enabled it to capitalize on the migration of St. Louisans to the suburbs while continuing to draw a fair amount of business from city dwellers. (Penney opened a second very successful neighborhood location the following year, 1950, at the Hampton Village Shopping Center, with the polar opposite architectural theme – a “Colonial Williamsburg” motif. That store remains open today.)

As late as 1967, the Wellston store still qualified as a key link in the Penney chain, and as such it was approved for an extensive “New Image” makeover that year, putting it in league with their new mall-based showplaces at Northwest Plaza and South County Center. By 1976, however, things had changed. In the report’s words, “the trends that enabled the Wellston store to be successful through the 1950s and 60s propelled shoppers even further westward; changing neighborhood demographics hastened the company’s departure.” That year, the Wellston J.C. Penney store closed. For the last 37 years it has stood vacant.

The building has been the subject of controversy in recent years, and nearly met its demise a few years ago when the local alderman withdrew his previous support for its preservation. Fortunately, St. Louis is blessed with a preservation community that’s second to none, and with a disproportionate number of great mid-century architectural blogs that tend to put the word out about such things. The best of the bunch, in my opinion, is B.E.L.T. – “The Built Environment in Layman’s Terms”, written by Toby Weiss (who also sings in a band called The Remodels – how great is that?). She recently informed me that the building has indeed been added to the National Register of Historic Places, and that the referenced alderman “has backed off on wanting to tear it down.” Other than that, all is quiet.

Of course, the key to survival of any historic retail building is a viable tenant. Maybe someone offering mid-priced khakis will give it a go.

As always, my special thanks to the J.C. Penney Archives at Southern Methodist University’s DeGolyer Library for the use of these great photos.

Save At Venture...Save With Style!

A new field of study has emerged in the past several years. Our most esteemed institutions of higher learning – Harvard, MIT, Stanford, Triton and others - have been uncharacteristically slow to recognize it and develop the appropriate degree curriculums for it. This lack of formal recognition has not deterred those who carry on this vital work, however.

I’m talking about the Retail Archaeologists – those hardy souls who brave the elements… who risk running afoul of the law…who put their life on the line, walking on brittle abandoned department store floors and roofs, amid falling debris, in order to capture the perfect shot of a day-glo wallpaper remnant, a patch of original tile, a section of a zig-zag awning. These are the people who unearth the relics, who reveal the work of the ancient masters of the 50’s, 60’s and 70’s, buried beneath years of neglect and fake stucco remodelings. It is they who perform these arduous tasks, while the rest of us sit in relative comfort in front of our laptops, snacks at hand, while “The Office: Season Four” episodes on DVD blare from our television screens. Where would we be without them, I beg?

There is one type of relic that particularly warms their hearts, and many of ours as well. A good many of these relics are still out there, wearing one of any number of nameplates - Kmart, Big Lots, Hobby Lobby…you name it. They have a unique identifying feature – a mesmerizing, converging and diverging diagonal pattern etched into the cement facades, placed there for reasons unknown. Had Erich von Däniken looked into this, it would have surely scored him another best seller. These were the late, great Venture stores.

Venture was a relative latecomer to the discount store world. By the time the first store opened in January 1970, discount stores were part of a well-established concept. The controversial early years of discounting, which struck deathly fear into old-line department store chains and featured battles with (and the ultimate defeat of) fair-trade statutes - laws that allowed the manufacturers of goods to set minimum sale prices - were over. By this time, most of the key regional and multi-regional players were in place, from the earliest discount chains (Zayre, J.M Fields and the other former “mill stores”), through the famous ‘Class of 1962’ (Kmart, Woolco, Target and Wal-Mart, all founded that year) and a plethora of others. Indeed, within just a few years, the Seventies economy would begin to shake out some of the weaker players, the first of many unfortunate “elimination rounds” to follow.

The Venture stores were a creation of The May Department Stores Company, a proud 90-plus year old chain of – well, the name pretty much explains it, that was based in St. Louis. In 1969, just before Venture’s launch, May was America’s third largest operator of “traditional” department stores, behind Federated (Lazarus, I. Magnin, Abraham & Straus, Bullock’s, Foley’s, Bloomingdale’s and Filene’s, among others) and Allied Stores (Jordan Marsh - New England and Florida divisions, The Bon Marché, Stern’s, Maas Brothers, Donaldson’s, Cain-Sloan and others).

At the time, May had an impressive lineup of store banners, including Famous-Barr in St. Louis, Kaufmann’s in Pittsburgh, The Hecht Co. in Baltimore and Washington, D.C. and surrounding areas, and two small operations in Ohio’s steel belt (although it was starting to rust by that point, for sure) - O’Neil’s in Akron/Canton and Strouss-Hirshberg in Youngstown. There were four divisions that operated under the May name: May-D&F in Denver (the first May stores had opened in nearby Leadville in the 1880’s), May-Cohens, Jacksonville, Florida’s largest department store, “The May Co.”, a major Cleveland area chain that was struggling at the time (See comments.), and “May Co.-Southern California”, far-and-away the largest division, with 18 stores and counting in that most vital of markets. May was also a major developer/owner of shopping centers, including Northland, South County and West County in St. Louis and a number of huge Southern California centers, such as Eastland in West Covina, the classic Mission Valley Plaza in San Diego and L.A.’s legendary Topanga Plaza, among others. (“Topanga” is thought to mean “a place above”. I hate to admit that when I first heard the word years ago, it brought to mind the sound effects from Don Martin’s famous Mad magazine cartoons. Slap me.) Then there were some newcomers to the May Company fold – in November 1965, they bought out G. Fox and Co. of Hartford, Connecticut, a downtown department store that May intended to expand into suburban locations. In July of the following year, May acquired Portland, Oregon-based Meier & Frank, a downtown store with two branches, at Lloyd Center and in Salem.

These last two acquisitions caused a problem that formed part of the impetus behind the founding of Venture. In the mid-1960’s, the U.S. Federal Trade Commission took a surprisingly aggressive stance in the area of retail mergers. The supermarket chain Winn-Dixie, for example, was barred from acquiring any additional grocery chains for a ten-year period starting in 1966. The following year, the five-year old merger between Von’s Grocery Co. and Shopping Bag Markets was invalidated altogether, forcing Von’s to sell off the latter chain. Sure enough, May’s recent acquisitions caught the unwanted glare of the FTC, and an investigation was announced. To avoid further scrutiny and the possibility of having to give up their newly won prizes, May executives offered a self-imposed moratorium on any further chain buyouts for a five-year interval. “Ten years and ya got a deal”, the FTC responded in the fall of 1966. (Note: the foregoing is not the actual consent decree language. Just thought I’d clarify.) Thus, an important avenue of growth was now closed off.

There were other reasons behind May’s decision to plunge into discounting. While there wasn’t a “deathly fear” of the discounters, there was certainly an awareness that some business was slipping out of May’s hands into theirs. More importantly, it would provide an expansion gateway into areas that May didn’t have a presence, notably Chicago.

As it happened, the timing couldn’t have been better for May to launch a discount operation, as one of the industry’s true visionaries was suddenly on the market, ready for a new challenge. This was John Geisse, who in mid-1968 resigned from Dayton Corporation (renamed Dayton-Hudson the following year), for whom he started Target in 1962. Geisse is widely credited as the originator of the “upscale discount retail” concept. The accounts vary as to why Geisse left Target, ranging from disagreement with fellow Dayton executives about expansion plans (Geisse favored saturating existing markets over expanding into new ones, according to author Laura Rowley in her book "On Target") to a snub for the presidency of Target (despite his key role, he only held a v.p. title), to the notion that Geisse vastly preferred the excitement of the start- up period versus the long haul of day-to-day operations, as retired May chairman and former Dayton vice president David Babcock later told Discount Store News.

When Babcock, who himself resigned from Dayton to take an executive position at May in 1967, got wind of Geisse’s resignation, he immediately contacted him. The two men had worked together at Dayton since the early 1950’s, and Babcock was well aware of Geisse’s accomplishments there. He told Geisse he “felt there was room for another Target”, and arrangements were made for Geisse to pitch the “upscale discounter” concept to May’s executive committee. On September 3, 1968, a Wall Street Journal article made it official – “May Appoints Geisse To Head Discount Venture”. No pun intended.

The new subsidiary, called Venture Stores, Inc., was organized throughout 1969 with the goal of opening the first store early the following year. On January 29, 1970, right on schedule, the first Venture store opened in the St. Louis suburb of Overland, Missouri. The book “On Target”, in noting the similarity in layout between the early Venture stores and Target, features the following quote from a Target executive: “John (Geisse) went from Target [to the May Company] with the rolled-up blueprints of the chain under his arm – and the first Venture store was identical in layout.” Considering Geisse’s intimacy with the concept, of course, the blueprints themselves were hardly necessary. A successful formula was a successful formula, and by mid-1971 six Venture stores were open: four in the greater St. Louis area –Overland, Kirkwood, Kingshighway at Christy Boulevard, and Fairview Heights, Illinois - and two more not far away in Alton, Illinois and Springfield, Missouri.

Through Venture’s first couple of years, its expansion was fairly slow and methodical. By the end of 1972, there were 12 stores - a critical milestone, because that was the point at which May management felt that the chain “would have sufficient volume and market penetration to support a professional central organization”, as stated in May’s 1972 annual report. Only two additional stores were planned for 1973, including a huge 162,000 square foot store in booming suburban St. Charles.

It was an approach that made sense, considering the plight of a number of several discounters and variety stores in the unforgiving economy of those years. Soon, the casualties would begin mounting – the Interstate chains (Topps and White Front), the American-as-apple-pie W.T. Grant, and more to follow as the decade wore on. Meanwhile, the focus at Venture was on brand building. A May 1974 article by New York Times reporter Isadore Barmash on the gloomy state of the discount biz features some great insights from Venture chief John Geisse on his advertising philosophy, which was to promote “images, rather than seek to capitalize merely on the merchandise advertised. Our gross margin results seldom pay for the ads we run, so that we have to gear our ads to produce a good over-all image for the company.” It’s a shame more retail chains didn’t take his advice.

The pace accelerated in 1974/75, however, as Venture pushed on into two important new markets – four new units in the greater Kansas City area – two on the Missouri side (Kansas City and Independence) and two on the Kansas side (Kansas City and Overland Park), all large stores. The big move, from a long-term standpoint at least, came in February 1975, when the company opened its first three stores in the Chicago area – in Oak Lawn at 95th and Crawford, Calumet City at River Oaks Center, and in Mount Prospect at Elmhurst Road/Route 83 (“eighty-tree” for you non-natives) and Dempster Street, on the former site of a National Food Store. This last one was close to my heart, and even closer to my junior high school – just a couple of blocks away.

(It was an interesting era to be in grade school. Some of my teachers had begun their careers in the early 1950’s, and twenty-five years later still had the demure manner and conservative style of dress one associates with that era. Then you had my math teacher, who wore shoulder-length hair, a ‘stache and an attitude and played rock music 45’s in class. The class’ favorite was “Bad Time” by Grand Funk, which I’ve probably heard three times since 1976 but still remember very well. He inscribed my seventh-grade yearbook “Eat a peach”, as I recently rediscovered. The school was torn down in the early 1980's due to a declining kid population.)

Interestingly, these initial Chicago area Venture stores were all teamed with A&P supermarkets, with A&P as a lessee to Venture. The Mount Prospect store sported the first A&P “tri-color” logo sign I ever laid eyes on, looking subtly attractive and modern against Venture’s trademark diagonal-patterned cement facade. The stores shared a common passageway, to the probable relief of A&P, who viewed the “Venture venture” as a lifeline. It would turn out to be A&P’s last gasp in the Chicago area.

Venture pulled out all of the stops for their Chicago launch, with month-long grand opening sales and a huge TV advertising blitz, each spot ending in the soon-to-be-familiar refrain – “It’s not just another discount store!!!” Venture chairman John Geisse hit the promotion trail as well, showing up at all three grand openings and giving a speech before that all-important audience – the Mount Prospect Rotary Club, as reported in the Daily Herald on February 25, 1975. In his talk, he gave a historic overview of the discount industry, with insights along the way as to why certain chains succeeded and others failed. He cited the example of one chain that “maintain(ed)a ’controlled dirt’ level in its stores indicating to consumers that it was a low overhead business”, and mentioned others that “always thought the next step was the big promotion” or “had no fashion sense” , while the discounters that prospered were “properly managed”, ‘’offered one-stop shopping”, and handled “presold” merchandise – “items purchased periodically which the housewife doesn’t need guidance in selecting”. He also addressed the special appeal of discount stores to the teenage market, where “peer needs exceed their ability to buy”. Oh, how I’d love to have been in that audience, especially since it took place so close to home. As it was, it was probably a typical weeknight for me… putting off my homework until the last possible second…lobbying for permission to stay up and watch Hawaii Five-O or whatever else was on at 9pm...ah, the life of a sixth grader!

Not long afterwards, Geisse left the May Company to start his own consulting firm. In 1976, he was appointed chairman of Ayr-Way stores, the former discount division of L.S. Ayres & Co., an Indianapolis-based department store chain. A decision by the FTC, which was obviously pretty active in the 70’s as well, forced Associated Dry Goods to spin-off Ayr-Way after its 1972 acquisition of Ayres. Ironically, ADG would itself be bought out by May in 1986, while the Ayr-Way stores would ultimately become Target units. (I should probably put this stuff in scorecard format, it would be easier to keep up with. For me, that is.) In 1983, Geisse would start up yet another company, called the Wholesale Club of Indianapolis, which grew to 24 stores and $650 million in volume before he sold it in 1990 to Wal-Mart (Geisse was a close friend of Sam Walton), whereupon the stores were converted to Sam’s Clubs. John Geisse passed away in March 1992 at the relatively young age of 71.

In March 1978, Venture reached an agreement that would nearly triple its presence in the Chicago area, making it the company’s most important market. After 17 years, Jewel Companies, Inc., decided to pull the plug on its Turn-Style discount store division, which had been struggling of late. Venture purchased 19 of that chain’s stores, 10 of which were in the Chicago area, including key locations in Glendale Heights, Schaumburg, Deerfield, Skokie and Merrillville, Indiana, among others. Also in the mix were locations in the Quad Cities and in downstate Illinois. At the end of 1978, there were a total of 20 Venture units in Chicagoland, including the Turn-Styles and two newly-built stores. Two additional new stores would open there in early 1979. With some of the finest store locations in Chicago under their belt, the airwaves were soon filled with a catchy new slogan, “Save at Venture…Save with Style”, which was adopted in 1981.

From this point, Venture’s growth settled back into a steady pace, adding a handful of new stores per year in St. Louis and Chicago, and the occasional multi-store entry here and there into other heartland markets – three stores in Oklahoma City and two in South Bend, Indiana, for example. By this time, Venture was no longer the May Company’s only “discount” division – in 1979, May acquired Topeka, Kansas-based Volume Shoe Corporation from the Pozez family. Volume Shoe was better known by their principal store banner, Payless ShoeSource. By 1985, there were nearly 1,900 Payless outlets, compared to 62 for Venture, doing only two-thirds the sales volume of Venture, but turning in more profits. In any event, Venture accounted for an impressive 20% of May’s total sales that year.

The following year, another discount chain would join the May Company fold, one with a bit more similarity to Venture. In October 1986, after months of negotiation, May bought out rival department store operator Associated Dry Goods, picking up venerable nameplates such as Lord & Taylor and J.W. Robinson, among many others. Also included were the Loehmann’s women’s apparel stores, which May quickly sold off. The “similar” operation was Caldor, the 35–year-old, Norwalk, Connecticut-based discount chain with a geographic footprint extending from New Hampshire to Virginia. ADG had purchased the company from founders Carl and Dorothy Bennett in 1981. At the time of the May buyout, Caldor was in the midst of a major expansion in New Jersey, opening five new stores there in 1986. While larger than Venture (115 stores compared to Venture’s 65), Caldor was far less profitable. May’s 1986 annual report, the first one to follow the ADG buyout, acknowledged Caldor’s problems, blaming them largely on excess inventory. Speculation arose that May would combine Caldor and Venture into a single chain, presumably to spread Venture’s winning ways throughout the entire operation.

That never happened. As the 1980’s rolled on, it was evident that the May Company was no longer interested in the discount store business. By 1989, they were looking for a graceful exit. Many factors played into this, I’m sure, including little stomach on May’s part for “fixing” Caldor, and the fact that their two discount chains combined now made up only 12% of the company’s revenue. Maybe they saw the oncoming competitive threat from Wal-Mart, but few crystal balls were that accurate at the time. And with Lord & Taylor now under their wing, they no longer needed the discounter for a foothold in Chicago, if that was a concern. A June 1989 article by the NYT’s Isadore Barmash got to the crux of the issue: “May doesn’t need to sell these discount retailers, but admittedly, they don’t fit May’s department store image”, one analyst told Barmash, and a May insider added: “The fact is that Farrell and Hays (David Farrell, then May’s CEO and Thomas Hays, its president) never really liked the discount business, with its different economics.” Enough said.

One interesting scenario that made the press was a proposed “swap” arrangement, where May would trade the Venture and Caldor chains to Dayton-Hudson Corporation (the stores would then be converted to Target units) in exchange for their namesake department store chains, Minneapolis-based Dayton’s and Detroit-based Hudson’s. While this never came to fruition, May eventually did come to own the former D-H department stores, which by that time were flying the Marshall Field’s banner, in a 2004 transaction. (Dayton-Hudson had bought Marshall Field’s from the BATUS Group in 1990 and later adopted the Field’s name for all of their department stores. Let me get that scorecard out again.)

On October 11, 1989, May announced its plan – as reported by the Times’ Barmash the following day, Caldor (118 stores then) would be sold to CAL Holdings, a new company set up by Caldor’s top management and an outside investor group. The May Company would retain a 20% equity stake in the new firm. The 73-store Venture, on the other hand, would be spun off to May shareholders as a separate company, with each May shareholder receiving a proportionate number of shares in Venture Stores, Incorporated. Delayed for over a year, the spinoff finally took place in November 1990.

Venture’s existing management, including chairman Julian Seeherman, remained in charge, and they had ambitious plans for expansion. These plans included a move into a new region that would ultimately seal the company’s fate. Up to that point, their stores had been located in or bordered the Midwestern states. In late summer 1993, Venture opened 11 brand new stores in Texas - six in the Houston area and five in the Dallas/Ft. Worth metroplex, along with a distribution center south of Dallas in Corsicana.

The focus here would be on “micromarketing”, a beloved term at Venture of late, where merchandise assortments for each store were finely tuned to the local buying audience. (As if that weren’t already required in their existing markets, we’re left to surmise.) For the Texas stores, apparently, this meant home décor themed with “cowboy boot, coyote and armadillo designs” in wall art and on throw pillows, and “leather handbags with ‘Texas’ boldly embossed on the front”, according to an August 1993 Discount Store News article. I’ve seen lots of armadillos over the years, but never a live one, just the “roadside” variety. I wonder if they were pictured “feet up” or down. (My apologies for the preceding lapse in taste.)

Jumping into two markets that were among Wal-Mart’s strongest and best-established territories was not the biggest problem with Venture’s new strategy. Far worse was the diversion of resources that should have been used to shore up Venture’s key market, in the face of “an onslaught of new Wal-Mart and Target locations in metro Chicago”, as Discount Store News later put it. The same article revealed that “(by) mid-1995, fewer than half the beleaguered Chicagoland stores had been through major remodeling”.

It would be some time before the seriousness of Venture’s expansion miscue was fully realized, and during that interim they tried some new initiatives. One was a new logo, an update of the “equity-invested diagonal stripe concept of the previous Venture logo but replac(ing) its industrial-looking, hard-edged lines with softer ones that suggest a furled flag”, according to a July 1995 Chain Store Age article. The logo’s “softer lines’’ tied in with another management decision, a move to reposition Venture upmarket, emphasizing higher end apparel sales while downplaying consumable items. Then came a dip in the U.S. clothing sales market. Without the traffic-driving aspect of consumable items to offset this, the results were calamitous.

By mid-1997, it was painfully clear that the Texas move was a mistake, that most of the company’s stores there would not be profitable over the long haul. At that time, Venture made the decision to sell 20 of its stores to Kmart Corporation, including ten stores in Houston, five in Dallas, two in Indianapolis and one each in Tulsa, Des Moines and Waterloo, Iowa, as Discount Store News reported on June 21st of that year. The chain would now have 93 stores, down from its 117-store peak in 1996. The company’s stated goal was “to focus on its core markets of Chicago, St. Louis and Kansas City”, although eight of the better-performing Texas stores – three each in Dallas and Houston and one each in Corpus Christi and Amarillo – would be retained for a while.

Not a long while, as it happened. In May 1998, after yet more store closings, the company threw in the proverbial striped towel, declaring bankruptcy and announcing the closure of the then remaining 73 Venture stores. Some 45 to 50 of them ended up as Kmarts. (And more than a few of those are now something else, I’m sure.) Discount Store News summed up Venture’s demise as the result of a string of bad decisions – “failure to move into food” or to “compete promotionally with Target”, and “turning its back on tired, old stores in its core markets and heading to Texas’’ as previously discussed. At the most basic level, the company’s management “wasn’t hungry enough to beat the competition”, and they fell into a “middle zone” of not knowing whether to position Venture as “a lead(er) in price, assortment or service”. And so they bowed out, instead of facing the fiercely competitive retail world we’ve grown accustomed to in the 21st century. But I miss those diagonal stripes.

The first two of the May Company photos above depict scenes from the earliest Venture stores in 1970. Note the old, sliding credit card machines at the end of the checkout lanes, a good distance from the checkers, something I remember seeing in a number of discount stores. Funnily enough, I can remember my grandfather’s bank-issued Master Charge card (they’ve gone by the name MasterCard for eons now) actually had a photo I.D. section, back in 1971!

While the other three photos, from 1978, 1979 and 1981 respectively, are focused on the checkout areas as well, they provide a nice overall feel for the “golden age of Venture”, as well as an interesting glimpse of some fads and fashions of the time. The music: Neil Diamond (of course), Eric Clapton’s “Backless” album (panned at the time and underrated today – I think “Promises” is one of his very best songs) and Kenny Rogers’ Greatest Hits (I didn’t know anyone actually bought that album – I thought it was automatically issued to every American household at the time. Whether you wanted it or not.) Atari game systems make a couple of appearances, and then there’s the ubiquitous Milton Bradley “Simon” electronic game. (With a brain. Do what it says or go down the drain.) These photos also capture a tectonic shift in American life, the aftershocks of which are still felt today – the Transition from Paper to Plastic. In the last photo, you can see a lady buying a blue-and-white striped dress. She obviously wanted to continue the “Venture experience” at home. That’s the spirit!

Lastly, a 1971 Venture grand opening ad, for store number six, in Alton, Illinois:

Barney Kroger - The Cincinnati Kid

The history of Kroger, like that of so many companies born in the same era, is a great American story. The roots of today’s Kroger Company reach back to 1876, when 16-year old Bernard Henry Kroger took a job selling coffee and tea door-to-door for The Great Northern and Pacific Tea Company in his hometown of Cincinnati. Kroger, one of ten children born to German immigrants, worked hard to help support his family, who lived in a flat above a dry goods store the family owned. After two years, Kroger left Great Northern to join the William White Company, another coffee and tea firm, leaving that firm shortly thereafter for the Imperial Tea Company.

When Imperial began to run into trouble, the owners asked young Kroger (who had been working a wagon route up to that point) to manage the company’s store for a 10% cut of the profits, which at the time were virtually nonexistent. Convinced he could turn things around, he took up the challenge. A stickler for quality with more than a bit of starch in his personality, Kroger built a following for the store. Interestingly, as Progressive Grocer noted, “It wasn’t a wealthy clientele. They were wage-earners’ wives who came back to shop, and told their friends…” Having saved up $372 from a year of toil, a considerable sum in 1883, Kroger approached the Imperial Tea owners with an offer to buy a one-third interest in the company. They refused, offering an increased share of the profits instead. Adamant about owning a stake in the game, Barney decided to strike out on his own.

With an additional $350 borrowed from a friend, Kroger opened “The Great Western Tea Company”, a tiny store on Cincinnati’s Pearl Street, replete with fire-engine red paint and gilt lettering, with a horse-drawn wagon sporting the same colors. Through some initial setbacks, including the loss of the horse and wagon in an unfortunate train crossing accident, a flood which destroyed the store’s initial stock, and an attempt by his landlord to increase his store’s rent (forcing Kroger to move to a less attractive location on a side street), Kroger persevered.

Within months, Kroger opened a second store, and by mid-1885 had added two more for a total of four units. By 1893, after ten years on his own, Kroger had 17 stores and was considered one of the most successful businessmen in Cincinnati. In 1902, The Great Western Tea Co. was reincorporated as The Kroger Grocery and Baking Company, which would remain the company’s legal name for the next 40 years. The word “baking” in the company’s name reflected an important aspect of Kroger’s business. At the turn of the century, Kroger made a splash by announcing his plans to set up the company’s own bakery, selling loaves to Kroger customers at half the average going price, then 5 cents each. Not only would this help build business for his stores, but it also would enable Kroger to capture a bigger chunk of his customers’ bread budget, beyond just bulk flour, butter and egg sales. As he acknowledged to a New York Times interviewer in 1901 - “In Cincinnati, with its large percentage of thrifty Germans, bread is usually baked in the home”. At two for a nickel, Kroger projected sales of 25,000 loaves per day to those thrifty folks.

Another innovative step Kroger took was born out of the company’s 1904 acquisition of the Nagel butcher shop chain in Cincinnati. After initially operating the meat markets separately, Kroger made a decision to integrate them into his grocery stores. Over the initial objections of his butchers, who resented the loss of their independence and the new bookkeeping requirements Kroger imposed, these early forerunners of the “complete food market” proved to be a huge success and had a great influence on the chain food store business as a whole.

With a solid base in Cincinnati, Kroger began to expand to other areas, first to nearby Hamilton, Ohio, then to Dayton and Columbus, where the company had 15 and 8 stores respectively by 1910. These initial forays were followed by an expansion drive (which reached a fever pitch by the late 1920’s) to other cities and the smaller towns in between- Detroit, St. Louis, Peoria, Indianapolis, Toledo, Cleveland, Grand Rapids, Youngstown and Charleston (WV), to name some examples. Much of this growth was accomplished through acquisition – 109 Piggly Wiggly and 43 Kohn Stores in the St. Louis and Central Illinois areas, 108 Piggly Wiggly stores in Louisville, 114 Bowers grocery stores in Memphis and the surrounding area, (along with yet more Piggly Wigglys) and Universal Stores of Madison, Wisconsin. In the coming decades, acquisitions would continue to provide a major vehicle for Kroger’s growth.

In late 1926, rumors began to fly that Kroger would merge with Philadelphia-based American Stores Company, possibly in combination with First National Stores or the H.C. Bohack chain. While some talks were held, these plans never came to fruition, and in my opinion would likely have not gone over well in light of the beginnings of a movement against chain store “monopolists” (or more accurately, oligarchs) that would gain sentiment as the 30’s rolled on.

In December 1927, B.H. Kroger sold his stock in the company, staying on as chairman but stepping down as president, turning that responsibility over to William H. Albers. Later on, he would repurchase a huge block of Kroger stock to help bolster confidence in the company through the depression years that followed. In November 1931, with nearly 4,900 stores in operation, he retired altogether. Barney Kroger passed away in July 1938, leaving behind a company that 70 years later is the largest company in America whose mainline business is supermarkets – an admirable legacy.

These photos are undated – the top photo showing a “B.H. Kroger” store circa the dawn of the 20th century. Below is a typical Kroger from the early 30’s, near the end of Mr. Kroger’s tenure with the company.

The Korvette Supermarkets

As mentioned previously, one of the key initiatives undertaken by the larger supermarket chains in the late 50’s/early 60’s was to expand into the area of non-food, general merchandise offerings. The reverse was true with a number of discount chains as well, including E.J. Korvette, the nation’s hottest and most successful discount store chain at the time.

Korvette went about it a bit differently than most of the others. Rather than try to put both grocery and general merchandise functions under one roof, from about 1960 on Korvette would typically build a series of buildings either adjoined or tied together by covered walkways – a two-story department store, a supermarket, a furniture and carpet center and a detached tire and auto center. The furniture/carpet and tire units were leased operations. Virtually shopping centers unto themselves, these “Korvette Cities” (as the company called them) had a striking visual presence. By 1965, Korvette was almost exclusively building “Cities” in their core East Coast markets and the newer markets of Chicago and St. Louis.

By 1965, however, it became obvious to Korvette management that the non-core businesses – furniture, carpets and most notably the supermarkets were causing a significant drain on the company's profitability. From 1960 to 1965 Korvette posted record sales increases every year, while profits lagged far behind. The furniture and carpet problems were due to in part to the slow moving nature of the products themselves, but mostly because Korvette’s lessees had become insolvent, forcing Korvette to take over ownership of the operations. As far as the supermarkets were concerned, it became clear that more depth of management expertise was needed in the grocery area. This expertise would come in the form of a merger, for which Korvette was finally ready and willing.

On February 1, 1965, Korvette merged with Hill’s Supermarkets, a family-owned, Long Island-based chain of 42 nicely profitable stores, most of which were located on Long Island itself. All stores would be renamed “Hills/Korvette Food Centers”. Hill's chairman, Hilliard J. Coan, was similar in age to Korvette’s Eugene Ferkauf, but couldn’t have been more different in temperament. Coan was a buttoned-down executive of serious demeanor, while Ferkauf, ever the idea man, didn’t even maintain an office or desk at Korvette Headquarters. Coan was named board chairman while Ferkauf held the title of CEO. On the surface, the mix should have worked; the personalities should have been complementary. Ferkauf excelled in what today would be called “management by walking around” – prowling the stores, monitoring merchandising and firing up the troops. He had little desire or patience for the tedious details of running the $700 million corporation Korvette had become. But tensions appeared, and as often seems to be the case with mergers even today, company executives split into two factions - in this case the Ferkauf and Coan loyalists.

Things rolled along in a sort of uneasy truce until a fateful day in May 1966, when Coan summoned Ferkauf to a meeting, and in the presence of two other Korvette execs demanded that he surrender the chief executive officer’s title and effectively leave the company. Understandably furious, Ferkauf (who was still the largest Korvette stockholder by far) right away pursued another merger, this time with Spartans Industries, owners of the Spartan and Atlantic discount stores and a very lucrative private label clothing manufacturer. Talks began immediately, and within months Korvette was no longer an independent stock company – it was now a division of Spartans. Coan was forced out, and in October 1966 he would become president of First National (Finast) Stores. Ferkauf would remain as Chairman of the Executive Committee of Spartans. Almost immediately, the supermarkets would begin to be sold off, first the Chicago units (to Dominick’s, as mentioned), then the Baltimore units to Food Fair, eventually followed by the others to various buyers.

This story (along with the rest of the Korvettes saga) is told in great, entertaining detail in an excellent book by the late New York Times retail writer Isadore Barmash, "More than they bargained for-The Rise and Fall of Korvettes". Highly recommended reading for retail fans.

The first three photos, from 1965, are of a brand new Hills/Korvette store in Lawrence, Long Island, NY. If you look carefully you can see the reflection of the Korvette Auto Center in the window, with the rarer red signage variant. The fourth photo is a 1962 produce department, and the last one an artist’s rendering of the Korvette Food Supermarket (what other kind is there?) as built in the earlier Korvette Cities.

E.J. Korvette - The Dawn of Discounting

In the history of American retailing, The E.J. Korvette Story is a fairly brief chapter. This brevity does not do justice to the tremendous, arguably unparalleled influence the company and its visionary founder, Eugene Ferkauf, wielded during its halcyon years – the mid-fifties through the early nineteen-sixties.

E. J. Korvette, Inc. was founded by Brooklyn-born Eugene Ferkauf in May 1948 with a single, cramped second floor store in Manhattan, where the main product sold was luggage. The store’s name (contrary to the popular legend which said it stood for “Eight Jewish Korean War Veterans”) was derived from Ferkauf’s first initial along with that of Joe Zwillenberg, a childhood friend, who would join Ferkauf in his new business. “Corvette” was the name of a class of Canadian Naval ship. The name was modified in deference to Canadian Naval regulations of the era which apparently forbade commercialization of military nomenclature (this was several years before General Motors’ Corvette).

Small appliances (sold at very low markup) were soon added to Korvette’s product mix, and after only two years sales passed the $2 million mark. By 1957, nine years after its founding, sales were at $71 million, and only five years later were over $237 million. By the end of the 50's, Korvette had begun to place a huge emphasis on clothing and and other soft goods, which helped fuel the company's rise.

Korvette played a major role in the downfall of “fair trade” laws – where goods manufacturers were allowed to set retail prices (today’s laws only allow them to “suggest” prices). To a large extent, these laws protected traditional department stores, who sold at typical 40% markup versus the discounters who often sold at margins of 20% or less. On hundreds of occasions, Korvette was sued by manufacturers for undercutting their mandated prices. Korvette’s response in nearly every case was to switch to a different manufacturer of the same product. The court cases also resulted in a ton of free publicity for Korvette, burnishing their image as an advocate for the poor, hapless, overcharged consumer.

Korvette also led the charge toward building in suburban locations, often arriving ahead of their department store competitors, including Macy’s and Gimbels. By the early 60’s, the company was building huge 200,000-plus square feet “Korvette Cities”, consisting of a “promotional department store” (they avoided the term “discount store” like the plague) with an adjoining Korvette supermarket, furniture/carpet center and tire store.

The department photos (and exterior artist’s rendering) shown above date from 1962, as the company continued to ascend at a furious pace. That year, Korvette opened 6 stores for a total of 21 in the New York, New Jersey and Philadelphia markets. A push into the Chicago area would come the following year, with St. Louis the year after that. Most of the stores opened in ‘62 were suburban locations, with one very notable exception – the company’s new flagship store on New York City’s legendary Fifth Avenue, which opened in June. Discount retailing, still a fairly new phenomenon at the time, had from the start been rebuffed and ridiculed by critics as a passing fad. Korvette’s success was a vital factor in showing those critics (along with everyone else) that discount stores were here to stay. Undeniable proof that Korvette’s influence had expanded far beyond its geographic boundaries came in the July 6, 1962 issue of Time Magazine, which featured a glowing cover story on Eugene Ferkauf and his brainchild.