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Ethan Trex
The Origins of 7 Department Store Chains
by Ethan Trex - October 27, 2009 - 9:49 AM

You can’t set foot in a mall without hearing one of their names, but the stories behind the men and women who founded department stores aren’t often part of our food court conversations. Here’s a look back at Richard W. Sears, James Cash Penney and some of the other people behind the anchor stores.

1. Sears & Roebuck

searsRichard W. Sears inadvertently got his start from a botched delivery. When Sears was in his early 20s, he worked as a railroad station agent in Redwood Falls, Minnesota, and he was on duty when a shipment of watches came in for the town’s jeweler. The jeweler hadn’t ordered the watches and refused to accept delivery, so Sears talked to the watch wholesaler and worked out an arrangement—Sears would buy the watches for $12 apiece and then sell them for whatever he could get.

Sears had such great luck peddling the watches to his coworkers and local farmers that he quickly gave up the railroad business and moved to Minneapolis to start the R.W. Sears Watch Company at the tender age of 22.

Alvah Roebuck entered the story after Sears established his watch company. Roebuck, a young watchmaker from Indiana, was searching for a job when he found an opening doing repairs for Sears’ upstart company. Roebuck went to work for Sears in 1887, and by 1893 their friendship had grown to the point where they incorporated a new business together: Sears, Roebuck, and Company.

So Roebuck got fabulously wealthy as a result of his first watchmaking job, then? Not quite. In 1895, Roebuck talked Sears into buying out his share of their company for just $20,000. Although Roebuck stayed with the company as an employee of its watch division, he never saw the big money Sears made. After Sears’ death, though, Roebuck had a great quip when people asked him if he regretted not having as much cash as his late partner: “He’s dead. Me, I never felt better.”

2. Macy’s

dept2Rowland Hussey Macy played more of an active role in designing his company’s logo than most founders do. Before Macy, a Nantucket native, got into the dry goods business, he worked on a whaling ship that sailed off of the island. At some point during his whaling days, Macy got a red star tattooed on his hand, and the star later became his store’s logo when he opened his first New York shop in 1858.

The famous store was actually Macy’s fifth attempt at opening a shop after four failed tries near his Massachusetts home, and Macy’s shop only took in $11.06 on the day it opened its doors. However, by the end of his first year, Macy had pulled in over $90,000 and was firmly established as a popular New York shopping destination.

3. Nordstrom

dept3John W. Nordstrom began his life in Sweden as Johan Nordstrom. In 1887, a 16-year-old Nordstrom arrived in the United States with five bucks and no command of the English language. He spent 10 years working as a logger and miner in the Northwest before deciding to head to Alaska to look for gold in the Klondike. After two years of searching, Nordstrom finally made a strike.

Nordstrom sold his claim for $13,000 and returned to Seattle to invest his newfound loot. One of Nordstrom’s buddies in Alaska had been Carl Wallin, who owned a shoe repair shop in Seattle, and in 1901 the two friends opened the shoe store Wallin & Nordstrom. Over the next two decades, the pair built up a devoted following in Seattle, and the firm gradually expanded into the largest independent chain of shoe stores in the country. In 1963, the company started selling apparel as well, and the modern Nordstrom’s took off.

4. Neiman Marcus

neiman-marcusHerbert Marcus, Carrie Marcus Neiman, and A.L. Neiman might be the only people ever to lose money by founding a giant, successful department store. In 1907, Marcus, his sister, and his brother-in-law were business partners in a sales promotion business in Atlanta. Their firm was so successful that offers to buy it started rolling in, but there were only two deals the partners took seriously: an offer for $25,000 in cash, and a stake in an up-and-coming local soft-drink company.

The three partners conferred and decided they didn’t trust the “sugary soda pop business” and took the cash, which they then used to open their department store. The soda maker they snubbed, Coca-Cola, ended up doing pretty well for itself. Decades later, Herbert Marcus’ son Stanley became the CEO of Neiman-Marcus, and he often joked that the company was “founded on bad business judgment.”

5. Bloomingdale’s

bloomIf you ever find yourself desperately needing a hoop skirt, it might be worth checking your local Bloomingdale’s. After all, the wildly popular 19th-century garment gave the department store its start. In 1860, brothers Joseph and Lyman Bloomingdale began selling hoop skirts at their Ladies’ Notions Shop on New York’s Lower East Side, and when these skirts flew off the brothers’ racks, they eventually decided to expand their store’s offerings. In 1872, they opened a revamped store, the East Side Bazaar, that offered all sorts of European duds they bought through a purchasing office in Paris.

6. J.C. Penney

JCPJames Cash Penney got his start as regular clerk in a dry goods store. In 1898, he began working for a small Colorado chain called the Golden Rule. In 1902, his bosses offered him an ownership stake in the company if Penney would move to tiny Kemmerer, Wyoming, and start a Golden Rule store there. Penney jumped at the offer. His store was so successful that by 1907, he was able to buy out the other two stores in the Golden Rule chain. By 1912, Penney had over 30 stores in the region, and he incorporated them all under a new name—the J.C. Penney Company.

7. Barneys

bnyBarney Pressman, founder of New York-based luxury chain Barneys, owed a lot of his success to his wife. When Pressman saw a small store in Manhattan going under in 1923, he wanted to buy it and open a clothing store of his own. There was a problem, though: he didn’t have the cash. When Pressman told his wife, Bertha, about this predicament, she slipped off her engagement ring and told him to pawn it. With the $500 Pressman got from hocking his wife’s diamond, he took over the failing store’s lease and bought 40 high-end suits, which were the original inventory when Barney’s Clothes opened its doors shortly thereafter.

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Comments (15)
  1. Interesting stuff. I got to hear about the history of Nordstrom’s when I visited Seattle this summer. :)

    An apropro recaptcha: expos employees

  2. When Macy’s bought out Hecht’s a few years ago, they converted the Hecht’s to a Macy’s. Seems logical. But we already HAD a Macy’s. Best part was they did it right at the start of the holiday season. There were a ton of people who reported their car “stolen” to the security guards that year. “I swear I parked outside of Macy’s!” To this day there are still two Macy’s in that mall. One supposedly sells more high-end goods than the other.

  3. Our mall has two Macy’s as well, because they bought out Kaufmann’s. It’s weird, but I do prefer one over the other.

  4. I guess the next article should be on defunct department store chains, e.g., May, Wannamaker, and so on.

  5. Any idea what mall the JC Penny pic came from? It looks like my local mall before a renovation (but the mall owner has several malls, and I’m sure they all looked alike at one time or another).

  6. I’d like to see the engagement ring he got $500 for at a pawn shop in 1923. Seems like it would have been quite the ring for that value in that era.

  7. Our mall has 2 Macy’s also, after they bought out 2 other department stores–Filene’s and Lechmere, I believe. One is a standard Macy’s and the other holds only housewares and, strangely, the men’s department.

  8. I think most of the malls in Northern California have 2 Macy’s – usually one for women and the other for men, housewares, and children.

    I think most used to be Emporium-Capwells.

  9. FYI: According to measuringworth.com, $20,000 in 1895 was equal to $529,000 in 2008. While not nearly what Sears ended up being worth, Roebuck didn’t do as badly as some people do when they prematurely cash out of successful ventures.

  10. yes our mall has two macy’s (one womens, one houseware and mens). It used to be Bullocks. Remember Bullocks?!

  11. That JC Penny DOES look like the Ptown Northwoods.

  12. JC Penney actually got into the dry goods business because his original trade failed. His first store was a butchery in Longmont, Colorado. He couldn’t afford the kickbacks to the local hotel owner so he went bankrupt and went to work for the Golden Rule stores.

    I’m not sure if it’s true or not, but legend has it that during World War II, all of his execs went off to war. When the war was over, he offered everyone one their job back. All took him up on his offer, but one: Sam Walton, who went on to found the Ben Franklin stores with his brother before starting Wal-Mart.

  13. ac, Bullocks!! I haven’t heard that name in YEARS. The fashion show was the highlight of my summers at Grandma’s. sigh.

  14. I have to say that I despise Macy’s, mainly because it bought out Chicago’s best department store: Marshall Fields.

  15. A new book, We Were Merchants, describes the founding and operating of the largest family-owned chain of department stores in the nation (Goudchaux’s and Maison Blanche). http://www.weweremerchants.com

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