Gimbels--Soon Just a Memory to Herald Square

When Bruce A. Gimbel brought his young California bride, Barbara Poulson of Long Beach, to this retailing mecca after World War II, she spotted a few medieval tapestries and chairs scattered among the usual merchandise at his family’s department store.

These were remnants of a fabled event in 1941, when Bruce’s father, Bernard, bought William Randolph Hearst’s multimillion-dollar art collection and offered the entire lot for sale on Gimbels’ fifth floor in Herald Square. Shoppers had their pick of paintings, sculpture, china, jewelry--everything from Benjamin Franklin’s spectacles to a 15th-Century Spanish monastery, a steal at $50,000.

“Those were exciting and imaginative times,” Barbara Gimbel recalls.

They were also easier times--and glory days--for traditional downtown department stores. Macy’s and Gimbels were engaged in a fierce but friendly game of one-upmanship, suburban sprawl had scarcely begun, and years would pass before stores such as The Limited and K mart would complicate merchandising.

Now, after several years of sharp declines under a British owner that bought the chain in 1973, Gimbels is holding a different kind of sale. Liquidation ads proclaim: “20% to 40% Off Everything! Nothing Held Back!” With sad irony, a doorman at an elegant apartment building on the Upper East Side noted that New York was “celebrating the centennial of one institution, the Statue of Liberty, while another dies.”

Even though the Gimbel family’s ties to the business have long since been severed, it is “very nostalgic for us” that the stores will soon be closed, Barbara Poulson Gimbel said in an interview. “Gimbels was so much a part of my whole life.” Her husband, who died almost six years ago at 67, ran the company for more than two decades and was the last family member to leave his imprint.

Legendary Feuds

Indeed, Gimbels has been a part of many lives in New York, where the legendary feuds with Macy’s gave rise to the expression “Does Macy’s tell Gimbels?” It was probably coined by Eddie Cantor in vaudeville but has become the accepted response to any nosy questions about company secrets.

Both stores enjoyed the rivalry for its publicity value. Hollywood popularized the idea in “Miracle on 34th Street,” a whimsical 1947 film featuring a Macy’s Santa Claus who would steer customers toward Gimbels for better bargains and selection. Bernice Fitz-Gibbon, an advertising copywriter who worked over the years for both merchants, recalls in her book “Macy’s, Gimbels, and Me” that Gimbels once published an ad saluting Macy’s:

“We congratulate Macy’s on their 100th birthday. (They certainly don’t look it.) We’re only 115. (We certainly don’t feel it.)”

For a time, Gimbels became known for a Fitz-Gibbon ad campaign stressing that “nobody but nobody” would undersell the store.

Yellowed newspaper clippings show that the competition often reached a fever pitch. On the day Macy’s started a price war in 1951, bargain hunters pushed in opposite directions on a revolving door until it collapsed. Over at Gimbels, when a woman in front of the book counter overheard reporters noting that the price of a best seller was the same as Macy’s, she said: “Well, I’m from Macy’s, and it’s going to be less in a few minutes.”

Valuable Real Estate

Those days are long gone, and Gimbels joins a list of those succumbing to the vagaries of New York retailing--Franklin Simon, Wanamaker’s, Best & Co., Korvettes, Alexander’s and Ohrbach’s, a Dutch-owned store that announced its closing the same week as Gimbels. In many cases, especially Gimbels and Ohrbach’s, the old stores are worth more dead than alive because of their choice real estate locations.

Observers say the stores declined because of a combination of inept management, the high costs of running big stores, competition from discounters, specialty and designer boutiques and a failure to adjust to customers’ changing needs.

Of the dying department stores, Gimbels seems to have secured a special spot not just in the memories of its customers but also in the lore of American retailing. The Gimbels were generally regarded for decades as solid merchants to the middle class with a flair for innovation. The company’s Philadelphia division, for example, bought the first horseless delivery wagon in the country and in 1901 installed the first escalator.

When goods such as nylon stockings and soap were getting scarce in the early days of World War II, Gimbels stocked up on hard-to-get merchandise and leased warehouses to hold it. While other retailers apologized for bare shelves, Gimbels’ ads touted: “Gimbels HAS all the things you can’t find elsewhere.”

Innovation was what set Gimbels apart in the beginning. In 1841, a 16-year-old Bavarian immigrant named Adam Gimbel started working his way up the Mississippi from New Orleans, carrying a knapsack with a small stock of goods. Frontier women were delighted with the bolts of cloth and hairpins.

Revolutionary Pricing

Weary of carting the merchandise on his back, the young peddler opened a wooden-fronted shop called the Palace of Trade near the Wabash River in Vincennes, Ind., in 1842. He instituted a policy of putting a fixed price on all merchandise, revolutionary in the days of barter.

Soon after, two of Adam Gimbel’s seven sons, Isaac and Jacob, took charge of the business and opened stores in Milwaukee in 1887 and Philadelphia in 1894. By 1910, Isaac’s son Bernard had won his bid to bring the Gimbel Bros. name to New York City and go head to head against R. H. Macy & Co. He chose a site, in the shadow of Macy’s flagship store, at Broadway between 32nd and 33rd streets, a busy traffic hub.

In a city where department stores grew piecemeal, the 10-story Gimbels emporium was the first to open at full size, with about 1 million square feet of floor space. (For years, the Gimbels kept their store “as dowdy as was decent, on the shrewd theory that lack of fancy frills would encourage bargain hunters,” Life magazine wrote in the mid-1940s.) The store appealed to the lower-middle-class and middle-class customers for whom fashion was not a high priority.

Bernard Gimbel was legendary for his exuberant, hands-on approach and people orientation. He routinely would roam the aisles, greeting longtime workers by name and handing out toys to children.

Under his leadership, the chain expanded into several other cities and began offering stock to the public. The company also bought another store on 34th Street owned by Horace A. Saks and proceeded to develop the Saks Fifth Avenue chain, starting with the original Saks Fifth Avenue at 50th Street. This was years before Rockefeller Center went up across the street, serving as a magnet for upscale retailers.

Made a Bold Move

“Retailing was centered around 14th Street then, so it was a bold move to go uptown,” Barbara Gimbel, an attractive 65-year-old, recalled in her comfortable, wood-paneled sitting room-library in a building between Park and Madison avenues.

(The Saks purchase proved to be a shrewd move for another reason. In addition to giving the company access to the upper crust, the stores also provided profits to bolster the frequently lackluster operations at Gimbels.)

After World War II, Bernard Gimbel’s son Bruce, who had ferried planes during the war and flirted with becoming a full-time pilot, agreed to enter the family trade, working his way up through the ranks. He was the only one of Bernard’s five children who did, making him the last of the retailing line. In 1953, he succeeded his father as president of Gimbel Bros.

Although not as flamboyant or promotion-minded as his father, Bruce did institute a vigorous suburban expansion program, starting with the opening of a Gimbels branch outside Milwaukee in 1954. “My father-in-law didn’t believe in branches,” Barbara Gimbel said. “He grew up in an era when big downtown stores were important.”

Bruce Gimbel also was one of the first to promote the merchandise of particular countries. For an Italian celebration at the Herald Square store, he erected a full-size plaster cast copy of Michelangelo’s “David”--to the dismay of some customers. “He got some irate letters about the nudity,” Barbara Gimbel recalled.

The executive also encouraged expansion of foreign buying offices, starting in Paris, then Italy, Spain, Germany and England.

Copies Considered Chic

Letitia (Tish) Baldrige, a well-known New York consultant on executive manners and etiquette, recalls New York society “going flip-flops” over the first French copies of Christian Dior, Yves St. Laurent and Givenchy that appeared in department stores in the late 1950s. For a time, she said, copies were considered more chic than the real thing.

Baldrige attended a cocktail party at the home of Vala Byfield, a prominent socialite and “one of the best-dressed women in the world.” The hostess wore a summer evening dress that she bragged was an Ohrbach’s copy. When a guest walked in wearing the same dress, Byfield purposely spilled wine on herself so that she could change her clothes and spare herself the embarrassment of wearing the same outfit.

Later, when Baldrige passed through Byfield’s bedroom, she casually looked inside the crumpled dress and was startled to see an Yves St. Laurent label. Byfield had passed off a $2,500 genuine article as a $200 copy. “That shows you the magic of those department store names in the late ‘50s,” she said.

For a brief time, author Fitz-Gibbon wrote, Gimbels sold more copies of Paris imports than any other store in the United States. It was one of the few periods when Gimbels would be prized for its fashion.

In the late 1960s, Bruce Gimbel set about to upgrade the store’s dowdy image with a new location catering to the well-heeled Upper East Side crowd. It would be his biggest mistake.

Monroe Greenstein, then a young retail analyst, recalls looking at projected numbers for the store, which was to be housed in a 12-story building on a narrow lot at 86th Street and Lexington Avenue.

“I said he’d need sales of $125 per square foot (per year) just to break even,” said Greenstein, now with Bear, Stearns & Co. (Today, he said, a good store would do $200 a square foot.) He recalls Gimbel saying: “I know it’s a terrible gamble, but my father left something after him, and I want to leave something, too.”

Store Was a Loser

Soon after the store opened in 1972, however, it started attracting customers from nearby East Harlem, one of the city’s poorest communities. A year later, the company acknowledged that the store, built for $30 million, was a loser.

“He thought it was the heart of the silk-stocking area, but it worked just the opposite,” said Marjorie S. Deane, a retailing consultant who publishes the Tobe Report. “Here was a brand-new store; they had an opportunity to do something new and exciting but instead copied everyone else.”

The store design had serious flaws, she added. “They put the escalators hugging the elevators (instead of) in the middle to tease customers as they rode up. It also gave an easy exit for shoplifters. It was a terrible mistake from day one.”

The 86th Street store was another blow to Gimbel Bros., which had started to falter in 1969. That was the year of the “maxi,” a full-length apparel style that didn’t catch on. “The whole industry had a bad year,” Barbara Gimbel said.

Gimbels also suffered from start-up expenses at branch stores, poor inventory control and the beginning of high inflation. The stock price dropped precipitously from its high of $45 a share, and the year ahead did not look good. Bruce acknowledged to his wife: “Everybody else is coming back, but we’re having our own private recession.”

An investor soon made an unfriendly offer to buy control. As a result, Bruce Gimbel was pleased when a subsidiary of British-American Tobacco proposed to buy out the company in 1973. Under the new owners, Gimbel served as chairman until 1975.

Batus Ignored Store

Observers have criticized Batus, the British owner’s U.S. subsidiary, for concentrating its efforts on Saks Fifth Avenue and its other store properties while letting Gimbels fall to ruin. They point to excellent results at Macy’s after that retailer upgraded its image and fashion merchandise.

The closings affect not only thousands of store employees but others as well. Faced with a loss of almost $11 million a year in advertising with the closing of Gimbels and Ohrbach’s, the New York Daily News said recently that it will cut its staff and other costs. “Survival is at stake, and there is no time to lose,” publisher James F. Hoge said in a letter to employees.

Despite these troubles, Barbara Gimbel has many fond memories. “I will be telling my great-grandchildren about the store we used to have,” she said. “It will make a lovely tale.”

FO