The Offspring Outlived the Name on the Building
At its peak the company ran 53 stores across the country. A tobacco conglomerate shut it down by 1987 and sold its most profitable division for $1.5 billion.
Two Buildings and a Copper Bridge
The building was ten stories of stone and glass, wide enough to cover a city block, and a copper bridge crossed the street overhead to reach its second half.
Doors at street level opened to the subway below. An underground passage ran to the train terminal next door.
The selling floors stretched across roughly 27 acres. Across the intersection stood the most famous department store in the country.
The store with the copper bridge was Gimbels. For decades it was the only name that made its neighbor uneasy.
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Same lights. Same states. Nearly 7 times the price.
Guess who pays the difference.
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Google signed a 15-year contract. Bill Gates invested $100 million. And on October 20th, the government auctions a quarter-million acres of land that produces it, after the last auctions went for 206 times the asking price.
One company has spent sixty years building this industry.
The Real Profit Came From a Different Name
Adam Gimbel opened a general store in Vincennes, Indiana, in 1842. His sons moved the business to Milwaukee in 1887 and built a full department store. Over the next four decades the family added flagships in Philadelphia, New York, and Pittsburgh, selling clothing, furniture, housewares, and jewelry at prices set to compete with any store nearby.
In 1923 the family bought Saks and Company for $8 million and used the name to open Saks Fifth Avenue. The new chain sold luxury goods on a different block, to a different customer, at a very different price.
The department store every shopper knew as Macy's competitor was, for fifty years, the same company that owned and expanded Saks Fifth Avenue. By the 1950s Saks was generating more than half of the corporation's total profits.
Twenty-Seven Acres at the Center of the City
In the first half of the twentieth century the downtown department store was the center of American commercial life. The flagships sat in dense urban cores reachable by streetcar, subway, and commuter rail. The New York store had doors opening to the Herald Square subway station and a pedestrian passage to Penn Station.
The company staged the first Thanksgiving Day department store parade in Philadelphia in 1920, four years before Macy's started its own. A 1947 Hollywood film wrote the rivalry into popular culture.
By 1930 the corporation was the largest department store chain in the world, reporting $123 million in net sales across 20 stores. Sales reached $300 million by 1953, and the company employed 20,000 people. At its peak in 1965, the corporation operated 53 stores.
Shopping Followed the Station Wagon
After the Second World War, American families moved to the suburbs and shopping followed. Malls opened on the outskirts of every major city, and the department stores that adapted built suburban branches fast. The corporation expanded around its four existing cities but added nothing like the national reach its competitor was assembling.
In 1973 the family sold the entire corporation to Brown and Williamson, the American arm of a British tobacco company, for about $200 million. The buyer was drawn to Saks Fifth Avenue, and the volume stores came attached.
Batus, the holding company that managed both divisions, later described the volume stores as "a marginal performer with little potential for increased profitability." The middle-market department store had been overtaken.
Thirty-Six Stores Went Dark at Once
The holding company announced in 1986 that it would dissolve the division. It closed its remaining 36 stores by 1987.
Some branches were sold to other chains. The New York flagship was gutted and reopened in 1989 as a shopping mall.
The copper bridge still crosses the street, but the name beneath it is gone.
Three years later, Batus sold Saks Fifth Avenue to an investment group for $1.5 billion. The parent company had paid about $200 million for the entire corporation in 1973.
The Name on the Smaller Sign Survived
The phrase "Does Macy's tell Gimbels?" lingered in American speech for years after the last store was boarded. The Thanksgiving Day parade that the company created in Philadelphia in 1920 still runs every November under different sponsors.
The pattern repeats across modern retail. Parent companies shed their weaker volume divisions and sell the luxury names at higher valuations.
The flagship closed. The brand it created never did.
