E. J. Korvette

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E. J. Korvette
Type	discount department store
Genre	retail
Founded	1948
Headquarters	New York City, United States
Area served	eastern United States
Industry	retail

E.J. Korvette was an American chain of discount department stores, founded in 1948 in New York City. It is notable as one of the first department stores to challenge the suggested retail price provisions of anti-discounting statutes^[1]. It is also notable for its failure to manage its business success which led to decline and its 1980 bankruptcy and closure.^[2] Founded by World War II veteran Eugene Ferkauf and his friend, Joe Zwillenberg, E.J. Korvette did much to define the idea of a discount department store. It displaced earlier five and dime retailers and preceded later discount stores, like Wal-Mart, and warehouse clubs such as Costco Wholesale^[1].

Contents 1 Notable Retailing Innovations 1.1 Discounting and Membership Program 1.2 Strip Malls and the Suburbs 2 Decline and Closure 3 The Origin of the E.J. Korvette Name 4 Former locations 4.1 Connecticut 4.2 Illinois 4.3 Maryland 4.4 Michigan 4.5 Missouri 4.6 New Jersey 4.7 New York 4.8 Pennsylvania 4.9 Virginia 5 References 6 External links

[edit] Notable Retailing Innovations

E. J. Korvette's founder, Eugene Ferkauf, began his discounting career in a 400-square-foot (37 m²) loft in mid-Manhattan, New York City. Inventory consisted of well known brands of luggage, household appliances and some jewelry. Discounts were one-third off regular price. Sales were over $2,500 per square foot. Ferkauf retired in 1968. (Discount Merchandiser July 1988)

E.J. Korvette's used several retailing innovations to propel its rapid growth. It used discounting even though most discounting was outlawed (or thought outlawed) at the time^[1]. Korvette's instituted a membership program, a technique from consumers' cooperatives that never been applied to a department store before. It also expanded into suburban locations at a time when most department stores were in a central business district.

[edit] Discounting and Membership Program

Korvette's low-price, low-service model was in some ways similar to that of earlier five and dime retailers such as Woolworth's, McCrory's, and S.S. Kresge. But Korvette's was innovative in avoiding the anti-discounting provisions of the Robinson-Patman Act, and undercutting the suggested retail price on such expensive items as appliances and luxury pens.

Korvette used "membership cards" (which it distributed in front of its stores, and to surrounding offices) to style itself a retail cooperative. In so doing, Korvette's was able to accept deep discounts from suppliers— something that competing department stores, such as Macy's and Gimbel's, could not do. In fact, Macy's and others filed numerous "fair trade" lawsuits against Korvette's to stop it from undercutting their prices^[1]. None succeeded. Arguably the lawsuits helped Korvette's by calling attention to prices so low that competitors thought them illegal.

Founder Eugene Ferkauf attributed his idea for membership cards and deep discounts to luggage wholesaler Charles Wolf^[1]. But where Charles Wolf made limited or even surreptitious use of it, Korvette's popularized it by instructing employees to distribute membership cards to any person entering any Korvette's.

[edit] Strip Malls and the Suburbs

While the first E.J. Korvette store was located on 46th street in Manhattan, its rapid growth in the 1950s was helped by its many stores in strip malls along arterial roads leading out of urban centers. This made E.J. Korvette ideally situated to meet the demands of the suburbs which grew in the United States during the that era.

First of modern type store was opened in 1954, a 90,000-square-foot (8,400 m²) store in Carle Place, Long Island, which for the first time carried apparel. (Discount Merchandiser July 1988) In 1956 Korvette's had 6 stores, including stores in Philadelphia and Harrisburg, PA. By 1958 it had 12 stores. At its peak, it had 58 stores^[1].

Korvette's expanded into the Chicago area in the 1960s. It successfully disputed the state and local Sunday closing ordinances and laws. Once those barriers were broken, many other retailers opened on Sunday.

[edit] Decline and Closure

Korvette's decline and closure are variously attributed to inconsistent management[1], failure to focus on merchandise it knew (such as appliances), and ultimately attempting to compete directly with the department stores in areas such as fashion (when it had neither the expertise nor the right store atmosphere)^[2].

Of note was E. J. Korvette's venture into the home entertainment business. The retailer established a rather out of context series of high-end audio salons within selected stores. Korvettes went so far as to market it's own "XAM" brand of stereo receivers, amplifiers (some manufactured by Roland Electronics of Japan) and speakers. At a number of the retail locations the audio department was, on dollar per square foot basis, one of the more profitable departments in the store.^{[citation needed]}

By 1966, Korvette's had begun to decline and chose to merge with Spartan Industries, a soft goods retailer. Eugene Ferkauf was eased out of the company leadership, and Spartan managers attempted to revive the company.

From 1971 to 1979, Korvette's was owned by Arlen Realty, a land development company that used Korvettes 50 stores as a source of cash flow. Under Arlen's ownership, Korvettes stores deteriorated and lost market share relative to other retailers. Soon the company soon became worth more for its real estate assets (such as its ownership or leasehold interests in valuable locations) than its retail sales.^{[citation needed]}

In 1979, Korvettes was purchased by the Agache-Willot Group of France^[3] which initially closed Korvette's least profitable stores, and began selling off merchandise, fixtures, equipment, and real estate. In 1980, they declared bankruptcy and on December 24, 1980 they closed all^[3] of their remaining 15 stores.

[edit] The Origin of the E.J. Korvette Name

According to Korvette's founder, Eugene Ferkauf, the name E.J. Korvette was coined as a combination of the initials of its founders (Eugene and Joe) and a re-spelling of the naval term, "Corvette." ^[4]. This claim, and the fact that the name pre-dates the Korean War by three years, directly contradict an urban legend that the name stood for Eight (or Eleven) Jewish Korean War Veterans.

[edit] Former locations

At its height, E. J. Korvette had 58 stores. Below are listed more than 60 locations which have served as E. J. Korvette stores at some point in the company's history.

This section needs additional citations for verification. Please help improve this article by adding reliable references. Unsourced material may be challenged and removed. (April 2008)

[edit] Connecticut

• Hartford - 901 Main Street
• Trumbull - Trumbull Shopping Park (now Westfield Trumbull) - later G. Fox, then Filene's, now Macy's

[edit] Illinois

• Arlington Heights - Arlington Heights Road & Rand Road
• Elmhurst - Highway 83 & St. Charles Road (later Builders Square, now Sears and Kohl's)
• Matteson - Crawford Avenue & Lincoln Highway
• Morton Grove - Waukegan Road & Dempster Street - now Bally's Fitness
• North Riverside - Harlem Avenue & Cermak Road (divided in to Kohl's, Petco, and Best Buy)
• Oak Lawn - 87th Street & Cicero Avenue

[edit] Maryland

• Baltimore - Northern Pkwy. @ Loch Raven Blvd.
• Bel Air - Harford Mall - later Hecht's, now Macy's
• Catonsville - Catonsville Shopping Center, Baltimore National Pike (US 40) later Caldor; then Kmart; now Forman Mills
• Glen Burnie - Governor Plaza, MD Route 3 (Gov. Ritchie Highway) later Ames, later became Syms, CompUSA, and Bally Total Fitness
• Langley Park - originally Lansburgh's, then Korvette's, then Kmart, now other stores, including a Toys "R" Us which closed in 2007
• Parkville - Perring Plaza Shopping Center, Perring Parkway and Joppa Road - became Ames, later became Burlington Coat Factory, Metro Food Market/Shoppers Food Warehouse, and Office Depot
• Rockville - Mid-Pike Plaza, Rockville Pike at Montrose Rd. - now G Street Fabrics, Bally's Total Fitness, Syms, Toys "R" Us, and other shops

[edit] Michigan

• Grand Rapids - Plainfield Ave. NE - later converted to Meijer corporate offices, building and property now for sale
• Madison Heights - 29101 John R. Rd. - now Kmart
• Redford - Telegraph Road - now Burlington Coat Factory and smaller stores
• Roseville - Gratiot Ave. @ 12 Mile Rd. - later became Roseville Town Center, a small mall featuring Service Merchandise; building now occupied by Office Depot and Marshalls Megastore
• Southfield - 29720 Southfield Road - later Service Merchandise and other stores, building now occupied by Burlington Coat Factory, Marshalls, and Staples
• Southgate - 16705 Fort Street - torn down, Super Kmart on site

[edit] Missouri

• St. Louis
  • 201 Evans Lane @ S. Florissant Road in Cool Valley - built 1964; now DRS Technologies, Sustainment Systems Division
  • Watson Rd. @ Lindbergh - later Marshalls, demolished 1995 for new Marshalls and Home Depot

[edit] New Jersey

• Audubon - Black Horse Pike Shopping Center, Black Horse Pike @ Nicholson Rd. - became Woolco, then Bradlees; demolished for smaller retail
• Ewing Twp. - North Olden Ave. at Princeton Ave. - later Laneco, now Save-a-Lot supermarket and office space^[5]
• Moorestown - N.J. Rt. 38 at Lenola Road - now Kmart
• North Brunswick - Brunswick Shopping Center - later Caldor, then Ames, now LA Fitness
• Paramus - Route 4, across from Bergen Mall - now Kohl's and Daffy's
• Watchung - Blue Star Shopping Center - became Caldor, now Kohl's
• Wayne - Wayne Towne Center - originally S. Klein, now Fortunoff
• West Orange - Korvette Shopping Plaza, Prospect and Eagle Rock Avenues - later Caldor, now Kmart
• Woodbridge - US-1&9 at Route 35 (became Caldor now ShopRite Supermarket)

[edit] New York

• Albany - Northway Mall - later Montgomery Ward, closed late 1990s, mall torn down
• Bay Shore
• The Bronx - White Plains Road at Story Avenue - became (TSS/Times Square Store), then (Alexanders, Caldor, and now Kmart)
• Brooklyn
  • Bay Parkway near Belt Parkway - became Caesar's Bay Bazaar in 1982, later Kmart, now Kohl's and Toys "R" Us
  • Fulton St - now a row of many different stores.
• Carmel - now a Hannaford supermarket
• Carle Place - Westbury Ave. - site being cleared for development
• Cedarhurst - Five Towns Shopping Center - store converted to Bay Harbour Mall, a small enclosed mall with 20 stores, plus Service Merchandise and Burlington Coat Factory as anchor stores. Mall space was gutted in early 2000s; building now occupied by Burlington Coat Factory, Bed Bath & Beyond, Best Buy, and Marshalls
• Commack - Veterans Memorial Hwy. - originally S. Klein; later Gertz, then Stern's, now Macy's
• Douglaston
• Flushing - now New York Health Insurance Plan - HIP Center
• Hicksville Mid-Island Plaza (now Broadway Mall) - originally S. Klein; store converted to food court and smaller stores
• Huntington - now Buy Buy Baby and Michaels(previously Service Merchandise/Filene's Basement)
• Lake Grove - later Gertz, then Stern's; store demolished in early 2000s to make way for outdoor shopping area
• Lawrence - on site of former Bargain Town; later Times Square Store, now Costco^[6]
• Manhattan

   *- Fifth Avenue (flagship store) - became Eastern Airlines building for a short time after
   *- Herald Sqaure - Opened as Saks & Co., later, Saks 34th Street, now Herald Center 
   *- 45th Street - Original founding location, now subdivided office space    

• Massapequa - Sunrise Mall (now Westfield Sunrise) - later Abraham & Straus, then Stern's, then Macy's Clearance Center, now Wal-Mart
• Nanuet - occupied entire Rockland Center strip mall entirely to right of Path-Mark store, subsequently divided into smaller units.
• Pelham Manor - Boston Post Road at Pelham Parkway - later Caldor, then Kmart, now vacant
• Port Chester - Boston Post Road - later Caldor, now Kohl's
• Scarsdale - 969 Central Park Ave - became Mays Department Store; later Burlington Coat Factory; now various stores
• Smithtown
• Staten Island - 2795 Richmond Avenue in New Springville - later Pergament, now Best Buy
• Valley Stream - Green Acres Mall - former S. Klein; later Gertz, then Stern's, now Macy's Furniture Store
• West Hempstead - later an indoor flea market called Shopper's Village, now National Wholesale Liquidators
• West Islip - Sunrise Highway - now Bob's Store

[edit] Pennsylvania

• Audubon
• Camp Hill - Camp Hill Shopping Center - demolished when strip mall was rebuilt as Camp Hill Mall
• King of Prussia - Plaza at King of Prussia - later Woolworth; store space razed and redeveloped in 1993 for mall expansion
• Philadelphia - Roosevelt Boulevard and Welsh Road - now Marshalls and a closed Tower Records
• Wyncote - Cedarbrook Mall (now Cedarbrook Plaza) - later Jamesway, then Caldor, then Kmart Supercenter]]; demolished for Wal-Mart Supercenter
• Springfield - Marple Crossroads Shopping Center - now Value City

[edit] Virginia

• Bailey's Crossroads - now TJ Maxx and Burlington Coat Factory
• Hampton - Coliseum Mall - later Montgomery Ward, now partially Burlington Coat Factory, to be torn down
• Springfield - Springfield Mall - former Lansburgh's; now Macy's

[edit] References

[edit] External links

• Discount Retailers
• When Giants Stumble
• American National Business Hall of Fame: Retailers
• Family in front of E.J. Korvette Store, Long Island, 1967
• 1970s commercial on YouTube