From the day of its humble beginning in Utica, New York, in 1879, Frank Winfield Woolworth’s “Great Five-Cent Store” filled an unmet need among the masses. While the more privileged could afford to shop at Tiffanys, or have their clothes made by French seamstresses, millions of people foundered in the “rest of us” category. Frank Winfield Woolworth recognized this reality and expanded greatly the concept of the general store. He created a retail chain that offered a wide selection of merchandise at prices so reasonable that, half a century later, even the hardest-hit Depression family could benefit. It didn’t seem to matter that the products weren’t always top quality, or that famous brand names were elusive. The fact was, that if you needed one of the thousands of utilitarian items that kept a household running, you could find it (and afford to buy it) at your local Woolworth’s. At F. W. Woolworth’s, everyone felt rich, and this was one of the secrets of its unprecedented success.
In the United Kingdom, the famed Red-Fronts were known colloquially as “Wooleys.”
For over a century, the company’s familiar red-and-gold mastheads dotted Main Streets across the United States and Canada, but the wonderful bargains of “Wooleys” were not exclusive to North America. Being a man of great foresight, Frank Winfield expanded overseas as early as 1909, when the first F. W. Woolworth & Co. Ltd. (a “three-penny-and-six” shop) opened in Liverpool, England.
In 1927, eight years after Frank Woolworth’s death, his administrative successor, Hubert Parson, adopted Bremen into the family, spawning the German Division’s first “25- and-50 pfennig” stores. By 1929, eight bustling Woolworth’s stores were even operating in the Republic of Cuba. Before Fidel Castro’s military coup in 1959, tourists and Cuban natives alike would routinely head for the Havana-based “Tencent” for American yo-yos, Milky Way bars, and Hula Hoops.
After World War II, the company formed alliances with even more manufacturers, allowing it to create extensive lines of “Woolworth-brand” merchandise.
Under the leadership of F. W. Woolworth’s president James Leftwich and, later, Robert C. Kirkwood, older stores were remodeled, food service departments expanded, stock was consistently replenished, and managerial training programs were enhanced. Slowly but surely, Woolworth variety stores moved into shopping malls, and long rows of “self-service” aisles replaced the old merchandising format of having a uniformed cashier stationed at individual counters. All of these factors combined to insure that the popular Red-Fronts, with their striped awnings, kept up with the changing American dream. Meanwhile, over in Europe, F. W. Woolworth & Co. Ltd. started to push on, determined to repair the damage rendered by Hitler’s aerial assaults.
On New Year’s Day of 1961, F. W. Woolworth’s executives boasted a milestone: the company had reached a record one billion dollars in annual sales. During this prosperous postwar period, F. W. Woolworth Co. acquired G. R. Kinney Corporation, and started to open colossal Woolco discount department stores in the United States and Canada. In 1969, the company also procured Richman Brothers, a manufacturer and retailer of men and boy’s clothing.
The F. W. Woolworth Company had much to celebrate during its centennial in 1979. The corporate giant owned or held majority interest in more than 4000 General Merchandise and specialty stores worldwide, and employed over 200,000 employees. From coast to coast, unprecedented sales and spectacular publicity events heralded the company’s achievements.
It certainly seemed as though the boom would never end. The profits were pouring in, the customers were happy, hourly wage employees felt as if they were an integral part of the Woolworth’s team, and administrators were feeling secure about their pensions. But behind the scenes, the picture was beginning to cloud.
Nineteen years later, every F. W. Woolworth Red Front in America and Canada was gone.
Bargains Abounded at “Everybody’s Store”
Sample pages from F. W. Woolworth’s 50th Anniversary Home Shopping Guide list some of the many items available to patrons in 1929 for under 10¢.
By 1939, the ten-cent limit had been lifted, but the stores offered an even wider selection of utilitarian items, most of which still could be purchased for quarter or less.
The Demise of an American Icon
One of the first questions that people ask, when reading about the demise of F. W. Woolworth’s, is: Why? How did this happen?
The answer is extremely complex. Countless factors and decisions, both good and bad, contributed to the death of these popular Red-Fronts. The exact details are known only to corporate insiders, and to those who have meticulously analyzed the five-and-dime’s rich history. Generally speaking, though, it is safe to say that the Woolworth’s variety stores perished under the strike of that double-edged sword known as Progress.
Beginning in 1962, with the opening of the first Woolco store in Columbus, Ohio, the company made its first giant leap out of its traditional five-and-dime image. It was now a player in the field of mega-discount stores, competing with other fledgling discount chains such as Grant City and K-Mart. When Woolworth’s joined forces with Kinney in 1963, it also ventured into the shoe business. Suddenly, Woolworth’s didn’t just mean “five-and-ten,” Woolworth’s meant “diversified retail.” The tides were changing, and continued to change with each passing trend. For example, in the mid-1970s, a new health-conscious generation showed an interest in designer sneakers. In response, the company introduced Footlocker stores. When enthusiasm for specialty sportswear climbed steadily throughout the 1980s, Woolworth’s was ready with its latest offspring: Champs. There were even experimental forays into small, mall-based shops. Some of these niche establishments like “Afterthoughts” endured, but others, including “Best of Times” did not, causing an additional financial drain on the company’s General Merchandise division.
As F. W. Woolworth’s focus changed, so did the faces of the powerful inner circle inside the great Woolworth Building on Broadway in New York. A study of annual reports shows that, with each passing term, fewer members of the board of directors were of the “home-grown” variety. The once strictly held traditions of working your way up from stock boy to chairman, or even of requiring that high-level executives have substantial experience in the variety store field, was fast fading. Equally significant, not one direct Woolworth heir was actively involved in the business. All of Frank and Charles Woolworths’ children and grandchildren had passed on.
It was a brand-new ball club at the F. W. Woolworth Company. A new guard had replaced the old.
Meanwhile, what was happening to the established Woolworth Red-Fronts? Well, hundreds of the dimestores were holding steady, especially those located in the prime geographical areas. As late as 1992, for example, the 34th Street store in Manhattan (one of the chain’s oldest sites) was bringing in over 20 million dollars per year, and the Ala Moana store in Honolulu was generating a sales volume of $24,300,000.
Yet, in some regions of America, customers began to notice a decided change in their once-sparkling Woolworth’s stores. Merchandise was not always replenished in a timely manner, pricing code systems seemed outdated, managers that had been in one location for decades mysteriously vanished, and the once-familiar faces of cashiers started to change from month to month. Part of the reason for this drastic shift in ambiance was that, the once-strong feeling of being part of a close-knit “Woolworth family” of employees was diminishing as the company expanded and diversified. Young adults, who once formed the core (and potential management pool) of the Red-Fronts, started job-hopping from retail chain to retail chain in search of better wages. Veteran managers of large Red-Fronts were retiring, or being transferred to other divisions of the company. In some cases, less-experienced employees filled the void. At the same time, the shopping habits of Americans were changing fast. Supermarket chains and discount pharmacies began to carry products that had once been staples of the old dimestore varieties. In the old days, one would automatically stop in Woolworth’s for a packet of needle and thread; now one co
uld just as easily pick up sewing notions at the local Shop-Rite, while en route to the produce department. Real estate costs in major cities were also skyrocketing. Consequently, a fair number of Red-Fronts were ousted when their old leases expired and the stores’ volume could not support the increased rents.
Further, the North American Woolcos, which were then considered the shining stars of the Woolworth Company, were feeding on the “five-and-dimes.” Company executives had decided to funnel large percentages of the established Red-Front’s profits into Woolco, and in some cases, to completely replace F. W. Woolworth sites with new Woolco stores. Money that had once been recycled back into the dimestores was now being used elsewhere. These are all common business strategies, but they left the old variety store division with a tighter budget—most noticeably in the renovation and remodeling departments. Prior to the company’s 1979 centennial, some of the older F. W. Woolworth stores did undergo extensive remodeling, but these were primarily high-visibility, historically-significant banner stores, such as the one in Lancaster, Pennsylvania. Sadly, a plethora of additional difficulties ensued, and in 1982, all of the American Woolco’s were closed. This resulted in a devastating loss of over 30,000 jobs. With Woolco out of the picture, the Woolworth Corporation’s athletic and shoe holdings became the new “cash cow” of the Red-Fronts. One former Woolworth executive explained it this way: “The (F. W. Woolworth) division was now the stepchild at the board’s table, forced to survive on the proverbial scraps remaining after the favored formats were satisfied.” Across America, new and growing chain stores gained momentum. Customers started to migrate to huge shopping malls instead of their home-town main streets.
When the dust settled in the mid-1980s, both Woolco and F. W. Woolworth stores, had suffered irreparable damage. The lion’s share of company profits were pouring in from its highly-successful chains such as Champs and Lady Foot Locker, and from its growing Northern Exposure and San Francisco Music Box Company mall stores. By 1990, the original focus of Frank Winfield Woolworth’s company had completely altered. Where there had once been over 3,000 Red-Fronts in North America, there were now under 1,000. Along with the General Merchandise division (which encompassed the F. W. Woolworth Red-Fronts) there were also four more company divisions: The Athletic Group, Specialty Footwear, The Northern Group, and Other Specialty. At one point, The Specialty Division alone ran over 7,200 stores in thirteen countries. In the overall financial picture of the mammoth Woolworth Corporation, its variety stores had inadvertently become a disconcerting smudge on its projection sheets.
F. W. Woolworth: More Than Just a Five-and-Dime
In the 1960s, the traditional image of the F. W. Woolworth Company was forever altered when it developed a line of large Woolco discount chain stores and catalogue outlets, and then acquired Kinney Shoes.
By 1993, enough Woolworth Red-Fronts were losing money to arouse serious concern. In response, the newly installed CFO, William Lavin, launched a bold restructuring plan. He and his team cut the company’s General Merchandise division in half, by closing 400 of its least-profitable Red-Fronts. The company then sold its 122 Canadian Woolcos to Wal-Mart, and invested much of the resulting capital into more athletic and footwear interests. Meanwhile, as thousands of former F. W. Woolworth employees struggled with sudden unemployment, an accounting scandal broke loose. In the end, no wrongdoing was proven, but Lavin was replaced by Roger Farah.
TIME CAPSULE MEMORY
“Paper Doll Fun”
On Saturdays, mother took me to Woolworth’s in Tarentum. Excited, I beelined for the movie star paper dolls, or “cut-outs”. I spent hours cutting and fitting the fabulous costumes, then designed my own. I still collect paper dolls, but I can’t buy them at a five-and-ten. Woolworth’s is a lost piece of Americana no modern equivalent can match.
—Rosemary Schafer, Natrona Heights, Pa.
On the surface, this strategy of “streamlinesell-acquire” seemed to improve the situation. Overall sales in 1996 totaled $8.1 billion with a net income of $169 million, as compared to a loss of $164 million in 1995. The numbers looked good, but the five-and-dime division had experienced an operating loss of $37 million in 1996. Forecasters speculated that the variety store era had passed. Shoppers were being lured by big name competitors, glitzy malls, mail order, and cyberspace—and even by the corporation’s other retail holdings. In 1996, a modernized F. W. Woolworth format was tested in a few cities, including Wilmington, Delaware. Initially, the reaction was good, but for various reasons, the project was abandoned. More than ever, the new wave of corporate VIPs wanted to forge ahead, leaving tradition in the dust. Not everyone was ready to bury this popular mercantile icon, however. F. W. Woolworth stores in prime areas continued to show excellent profits, and consequently, many employees felt that the Red-Fronts could still be turned around. They believed that so many five-and-dimes were in the red because of corporate neglect, rather than a lack of consumer interest. Several people even suggested that, to capitalize on the growing American nostalgia craze, the dimestores revert back to their old-fashioned design of individual wooden counters and vintage decor. By this point, however, the writing was on the wall. The very Red-Fronts which had spawned Frank Woolworth’s empire, no longer fit into the company’s profit projections.
Good-Bye Woolworth’s!
On July 17, 1997, chairman of the board and CEO, Roger Farah, along with the company president, Dale W. Hilpert, announced that the F. W. Woolworth Corporation would be closing the 400-plus remaining F. W. Woolworth variety stores in the United States, and hundreds more abroad. Over 9,200 employees would be terminated; a small percentage would be reemployed in other company stores, such as Lady Footlocker.
Virtually every daily newspaper and every major television network carried the story, proclaiming that another piece of American popular culture would soon be gone.
The unemployment lines swelled and Americans were shocked. From California to New York, and everywhere in between, people dashed to their nearest Woolworth’s store to take one final nostalgic waltz around the aisles. Staffer Robert Sietsema of the Village Voice was among them. He wrote: “A soothing voice croons over the public address system like a grief counselor, punctuating offers of sale merchandise with, ’It’s our way of thanking you for 118 wonderful years together.’ If that isn’t enough to swamp the tear ducts, there’s the sight of the snacking lunch counter whose streaky gray Formica and twirling stools rocket you back to childhood. The five-and-dime lunch counter will soon go the way of the dodo and Automat.”
One New York radio announcer was so upset by the news that she gave out the number of Woolworth’s CEO over the air. Within hours, Farah’s phone lines were deluged. The announcer, like so many other people, was wondering what would happen to all those goldfish.
Farewell Woolworth’s!
In the summer of 1997, when the last of the Red-Fronts were being shuttered, customers from coast to coast flocked to their local stores for one last waltz around the aisles. They were greeted with signs reading “Closed Forever” and “After 118 Years.”
In Sante Fe, New Mexico, one multigenerational family posed for a souvenir photo.
TIME CAPSULE MEMORY
“Woolworth’s Was More Than Just a Dimestore”
It might seem odd that the demise of a variety store, has caused so much sadness in America … but you see, Woolworth’s was more than just a store. It was a part of our daily lives. Some people called it the five-and-ten, others the five-and-dime. I always called it plain Woolworth’s. For oldsters like myself, it was the place where we took our best girls for an egg cream at the lunch counter. And it was the place we got our first jobs, usually as stock boys, and bought our first tube of shaving cream. Woolworth’s was the place to go as a kid and gape at all the penny candy and stroll around the aisles, and later on my wife and I brought our kids there to do the same thing. It was a holiday tradition, when I was a kid during the Depression, to try to get as many gifts, for as many
people as you could, for fifty cents! F. W. Woolworth’s was always there, comfortable, like an old shoe. When the stores folded for good, there were employees caught in the shuffle that had devoted their entire life to the company. They thought they had a job forever and that was sad. I tell you, there’s a lot of history in that old Woolworth’s chain.
—Art Marshall, Scranton, Pa.
Nearly a year later, on the morning of April 27, 1998, Wall Street buzzed with more news. The great Woolworth Building, which had housed the corporate headquarters for three-quarters of a century, was up for sale. Considering its prime location across from city hall, this “Cathedral of Commerce” could easily sell for $150 million. Such a great influx of cash would certainly make the 1999 balance sheets of the F. W. Woolworth Corporation look greener, but the sands of time were running out for the Woolworth’s five-and-dimes that started it all. On June 12, 1998, one day after the company’s annual stockholder’s meeting, the F. W. Woolworth Corporation became known as the Venator Group. Reportedly, the name Venator was inspired by a classical Latin word for “sportsman,” which the chief executives felt was a moniker more in keeping with their heavy concentration of athletic holdings.
For those familiar with the rags-to-riches story of Frank Winfield Woolworth and his untiring efforts to establish a posthumous reputation for himself, the company name change struck a particularly discordant chord. It was even speculated that Frank W. Woolworth turned over in his grave at Woodlawn Cemetery, just as he had probably done the day in 1935, when the board of directors voted to lift the twenty-five-cent maximum price restriction on goods sold in the store.
Twelve days after the name change took effect, the final die was cast. On Monday, June 22, 1998, it was announced that the Venator Group had sold the Woolworth Building to a major real estate developer. Within months, workers were dispatched to destroy portions of the seventy-six-year-old building’s beautiful Italian Carrera marble highlights, as part of a massive renovation. The Grand Arcade Lobby of Frank Woolworth’s Cathedral of Commerce would presumably be spared, as it had been denoted an historic landmark. However, the fate of thousands of pieces of the Red-Front’s rich history still stored throughout the skyscraper (from early cash registers to glass photo negatives to Frank W. Woolworth’s hand-carved desk) remained uncertain. The Venator Group announced that, for the time being, it would maintain its corporate offices in what was once the tallest building in the world, but as of January 1999, they would be tenants of the Witcoff Group.
Remembering Woolworth’s Page 2
