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Jews and Department Stores

Jews and Department Stores

Liana Hitts
April 26, 2015

Wow! This is kind of scary. I’ve never had to give a presentation so involved to so many people. But I am up for it if you are! My major project is the history and evolution of Jewish-owned and operated department stores. Now, I love shopping like most 12-year-old girls, so when I started my project, I thought about how the history of the department stores I love so much is tied to my own heritage. Many major department stores that people shop at today were founded and made successful by Jewish people. So, this project took me on a very interesting journey, which I would like to share now.

If you’re walking around Manhattan, you’ve all seen historic department store sites, even if you didn’t know it. Many of the beautiful buildings people still marvel at today are famous flagship department stores. If you’ve ever been inside Bed, Bath and Beyond on 6th Avenue, you were in the original Abraham and Straus department store, founded by the same Jewish businessmen who owned Macy’s. This area is called the Ladies Mile, and in its heyday from the end of the Civil War to the start of World War I, it was the place where ladies shopped until they dropped, and is now an official historic district of New York City.

Even among Jewish people, many may not have given much thought to how Jewish department stores are woven into the fabric of our city, and really, our country.

You certainly know the department store Kohl’s. But you may not know it was founded by European Jewish immigrants. Of course you’ve heard of Sears, but did you know German Jewish immigrant Julius Rosenwald took over the struggling company in 1893 and turned it into a huge success story? And there’s the German Jewish immigrant brothers Isaac, Louis and Benjamin Stern, whose Stern’s department stores were leaders in the business for so many years.

People love to search for a bargain at Century 21, but they may not know it was founded by Syrian Jewish immigrant Sonny Gindi in 1961 in Bay Ridge, Brooklyn. Anyone who has seen the film Miracle on 34th Street knows of the great department store battle between Macy’s and Gimbels – but they may not know that Bavarian Jew Adam Gimbel pioneered department store franchising by opening up 30 stores by 1910, and that the Jewish German immigrant Straus family took over Macy’s early on, and then duked it out with Gimbel for shopping supremacy.

And that’s just for starters. There’s world-famous Bergdorf Goodman, Korvette’s, and other smaller, local and regional department stores founded by Jews who got into the retail trade all over our country.

Researching all these department stores, it didn’t take long to realize the vast majority was founded by Jews. I thought, what made this so? Why did the Jewish people gravitate toward the department store business? So my starting point is: How did Jewish people create this new kind of commerce in America, one that still influences the way America shop today?

I learned the department store pioneers came to the U.S. as part of a large wave of two million European-Jewish immigrants who settled here from 1840 to 1890. They arrived in an America that is very different from today, and it was a time of great change in America’s economy.

At one time, except for in the big cities, people generally grew their own food and made their own clothes – little needed to be purchased, and they often bartered with their neighbors. But by the middle of the 19th century, more tradesmen shipped out their surplus to make extra money, and they were looking for goods that might not be available to them.

Peddlers were small businessmen who bought items from manufacturers, usually on credit, and went door-to-door selling them. As you can imagine, peddling was a difficult and exhausting job, but it provided a decent income.

And most of those peddlers, from the 16,000 listed in the 1860 census, were Jews. They peddled everything from cloth to watches, linens to eyeglasses, bringing the products to the people.

Jewish peddlers roamed Europe as early as the Middle Ages. For 19th century immigrants to America, however, peddling was less a career than a starting point. It launched the idea for the general store, which later developed into department stores. Also, it was a good way to start a life in America for strong and fit men.

This army of European Jewish peddlers changed American life, and brought Jewish culture to American cities. They carried Judaism to places where Jews had never been seen before. By the end of the Civil War, the number of organized Jewish communities with at least one established Jewish building had reached 160, spread over 31 states.

Professor Hasia Diner of New York University wrote about the Jewish immigrant experience for peddlers, saying, “Rather than being a life sentence, as it had been in Europe, Jewish peddlers in their destination homes used peddling as a way to leave the occupation. Peddling represented merely a stage in a Jewish immigrant man’s life.”

Let me tell you about one such enterprising family, the Strauses, which included two brothers who changed the world of department store commerce. Nathan and Isidor were born to a Jewish family in Bavaria in the 1840s. Their dad Lazarus was a landowner and the family was important to the community. Isidor and Nathan’s great-grandfather served on Napoleon’s council to free Jews under his rule.

Their business fell apart in Bavaria, and in 1852 Lazarus moved to the U.S. by himself to seek a better life that would eventually allow his family to join him. He first lived in Philadelphia, and then in Georgia. There he partnered up with a local Jewish peddler and started a small dry goods store.

Two years later, Lazarus sent for his family, but life wasn’t easy – they were the only Jewish family in town. By the time the Civil War ended in 1865, anti-Jewish sentiment was strong in the south, and the Strauses left.

Lazarus moved the family to New York City, where they made their home on W. 49th Street. Oldest son Isidor went into business with his dad, starting a glass and china import business.

Nathan joined the business in 1866, and L. Straus & Sons became a big player in imports. In 1874, Lazarus and his sons made a deal with the department store Macy’s to run their glass and chinaware department. It only took a few years for the department to become the most profitable part of Macy’s, and by 1887, the Strauses were able to purchase the entire store from its founder R.H. Macy.

While Macy’s grew under the Straus leadership, Isidor and Nathan made another major purchase, one that would bear their name. They bought Joseph Weschler’s share of a store in Brooklyn called Abraham & Weschler, and along with their new partner Abraham Abraham (yes, that’s his real name!) renamed the store Abraham & Straus. It was another business success for the family – by 1900 they employed 4,500 workers.

Now, this story is particularly interesting to me because my family is from Israel. In 1912, Isidor and Nathan travelled to Palestine, a trip that affected Nathan deeply, but also led to a family tragedy. After a few weeks, Isidor wanted to leave but Nathan decided to stay on. Isidor and his wife booked passage on the Titanic. When the ship hit an iceberg and it became clear it would sink, Isidor was offered a seat in a lifeboat. He refused, saying women and children should be rescued first. His wife Ida also refused to get into a lifeboat, and they died when the Titanic sank. Nathan felt very lucky that he had not left with them, and his brother’s death drove him to become more charitable. He used his fortune to help the poor in New York City and fund Jewish and childrens’ projects. Straus gave two-thirds of his fortune to various projects in Palestine; in recognition, Netanya, a seaside town in Israel was named for him. Netanya is a Hebrew variation of the name Nathan, and I’ve been to the city several times.

Meanwhile, Macy’s and Abraham & Straus continued to grow. Isidor’s son, Jesse Straus, took over as president of Macy’s in 1919, and his son Jack followed him as president in 1939.

The Strauses continued to invest money to expand their department store operation – in 1928 they renovated the Abraham & Straus flagship store on Fulton Street in Brooklyn. The store grew to an amazing 1 million square feet, costing $8 million dollars. That would be over 100 million dollars today.

It was also around that time that the families sold the Abraham & Straus chain to the Federated Department Store Corporation, and the business became much less family run. In a strange twist of fate, however, Macy’s declared bankruptcy in 1994, and A&S owner Federated bought them. One of the first things they did? They dropped the Abraham & Straus name and renamed most of the stores Macy’s! They thought Macy’s was more famous and changing the names would support the Macy’s franchise. That 1 million square foot building that was the A&S flagship in Brooklyn is still bustling today – it is currently a Macy’s, the second largest Macy’s in the U.S. next to the Herald Square location.

Now, here’s a bit more about other New York Jewish department store giants. One is Century 21. Sonny and cousin Al Gindi opened their first store in Bay Ridge in 1961. It was a big hit, and they continued expanding, opening a massive flagship store in lower Manhattan. That store was famous during the September 11 attacks – it had to be evacuated when the first plane hit, and later, it suffered heavy damage when the towers collapsed. But the family repaired the store and eventually re-opened. Sonny Gindi, who died in 2012, was a generous man – he famously supported Jewish causes like the United Jewish Appeal, and served on the founding board of the Shaare Zion synagogue in Brooklyn. Century 21 continues to grow- it now has nine stores that take in $160 million a year.

Then there is the Gimbel family. Coming from an industrious, Jewish German family, Adam Gimbel had several small general stores before opening his first Gimbels department store in Milwaukee, Wisconsin in 1887. It was a huge success, but Adam had a problem – he had eight sons, and he wanted all of them to join him in the business. His solution? Open a lot of Gimbels stores!

Adam ended up opening 30 of them, including its famous flagship store in Herald Square. It was only a block away from its archrival, Macy’s. Adam Gimbel was quite a character and loved to compete against Macy’s. Gimbels closed shop in 1987 when a corporation bought it out and turned most of the stores into Stern’s or Kaufmanns. The original flagship store is now Manhattan Mall.

Certainly the ritziest of the Jewish department stores is Bergdorf Goodman. The high-end department store attracts celebrities and millionaires from all over the world to shop its exclusive lines, and every designer in the world angles to get their lines placed in its store.

Founder Edwin Goodman was a Jewish American who worked as a tailor at a shop owned by Herman Bergdorf. The pair went into business together, but by 1901 Edwin was thinking big – he bought out Bergdorf and opened a large department store on 32nd Street in what became known as Ladies Mile. He eventually moved to its current location on 57th and 5th. By 1969, it was the last of the major U.S. department stores still operating independently. Bergdorf Goodman was so successful there was temptation to open up many stores, but Edwin Goodman said the only way Bergdorf’s could guarantee quality was to operate just one store. While Bergdorf’s was eventually acquired by Nieman-Marcus, they didn’t dare change the name of such a world-renowned store!

One of the innovative department store chains was Korvette’s. The store was founded by Eugene Ferkauf, of a German Jewish immigrant family. Eugene was a born seller – the name Ferkauf means “sell” in Yiddish, which he grew up speaking.

Ferkauf opened his first Korvette’s on E. 45 Street in Manhattan, then moved to a Herald Square location. Korvette’s operated differently than other department stores – Eugene sold cheaply and used high volume sales to make his profits. His low prices angered competitors, and led to legal battles for selling below the manufactured retail price. Ferkauf got around that by passing out “membership” cards to his customers – like how Costco and others operate today. Ferkauf was such a success he eventually opened up 58 Korvette’s around the country. A southern businessman named Sam Walton traveled to New York to find out how Ferkauf managed to make money with such price discounts. He took Ferkauf’s model and opened up the Wal Mart store chain. Ferkauf sold his share of Korvette’s in 1966, and spent much of the rest of his life donating his fortune to Jewish charities and other causes. The flagship Korvette’s is now the Herald Square Mall.

We’ve learned that many of the historic department stores of New York – Gimbels and Korvettes, no longer carry on under those names. But these Jewish immigrant families made a profound impact on America.

I feel pride learning the rich history of Jewish immigrants pioneering the department store industry – and you know, they were certainly good at it.

It’s made me realize more about my culture, how Jewish peddlers turned their businesses into storefronts, and think about my heritage. I wonder if many of these Jewish immigrants had trouble finding work in the U.S., so they created their own businesses to support their families. I don’t think you could say it’s ever been easy for Jewish immigrants to gain a foothold in America, but to see their ingenuity, and in many cases, their bravery in building such a dynamic business industry really makes me proud.

Jewish businessmen started from the very bottom and climbed to the very top, and they changed the face of America. Shopping has never been the same – I think it’s better, easier, faster and a lot more fun than before department stores came into existence.

From now on, whenever I walk into a department store, I will surely think of the rich history behind the business and be more appreciative of the hard work that went into it. I will also keep in mind that hard work does pay off.
By the way: If anyone wants to take me shopping after this, I’M AVAILABLE!!!