20 Retail Fortunes Built Before Shopping Malls Ever Existed

R.H. Macy & Co. was founded in 1858 by Rowland Hussey Macy, who had already failed as a retailer four times. He operated his store in New York City under a single, non-negotiable cash price, and emblazoned the establishment with a red star symbol based on a tattoo he got as a young whaler. Macy eventually elevated a distant relative, Margaret Getchell, to the position of store superintendent, an exceptionally high-ranking post for a female employee. At the time of his death in 1877, the business had grown to occupy a total of 11 buildings.

Frank Winfield Woolworth’s initial store, in Utica, N.Y., went under within a few months in 1879. That June, he opened another in Lancaster, Pa., but displayed items on open glass counters rather than locking them up. The five- and ten-cent price tags were posted clearly on the shelves. Woolworth’s five-and-dime stores soon proliferated throughout North America and Europe. By 1913, he had enough cash on hand to buy New York’s 792-foot Woolworth Building outright without needing a mortgage.

In 1886, Richard Warren Sears, then a Minnesota railroad agent, bought an unwanted shipment of watches and sold them on for a profit. In 1893, he teamed up with Chicago watchmaker Alvah Roebuck to form Sears, Roebuck & Co., which used the newly established Rural Free Delivery mail system to ship tools for farms, clothes, and even kit houses directly to remote farm households. By 1900, it had surpassed its nearest competitor and didn’t open its first brick-and-mortar store until 1925.

After Harry Gordon Selfridge worked his way up from stockboy to partner in Chicago’s Marshall Field’s department store, he invested £400,000 of his own money to open a shop on Oxford Street in London in 1909. It featured open-fronted displays, opulent advertisements in newspapers, a customer lounge, and Louis Blériot’s monoplane parked inside. His ploys proved successful for many years until his own lavish spending during the Great Depression caused him to be removed from the board of directors.

In 1852, Aristide Boucicaut and his wife Marguerite acquired a tiny Paris shop, Le Bon Marché. They got rid of bargaining and set fixed, marked prices. They permitted shoppers to wander through the shop without obligation to purchase, and they offered exchanges and mail-order service. By 1869, Boucicaut had engaged the engineer Gustave Eiffel to rebuild the shop into a glass and iron palace. Department store historians have long regarded Le Bon Marché as the archetype that shaped the modern department store.

In 1911, Leon Leonwood Bean, a hunter from Maine, sewed leather uppers onto rubber soles to create a waterproof boot and sent out a four-page flyer to other hunters outside the state the next year, promising a full refund on any unsatisfactory pair. Ninety of his first 100 pairs leaked and were returned. Bean paid them all back, as per his promise, and then replaced the rubber soles. The boot, eventually known as the Bean Boot, became the basis of a mail-order outdoor-gear empire founded on that single promise.

Herbert Marcus, his sister Carrie Marcus Neiman, and her husband A.L. Neiman had operated a successful sales agency in Atlanta, Ga., until 1907, when they were offered a buyout of the business. They were offered either $25,000 in cash or Coca-Cola bottling rights for Missouri or Kansas. They chose the cash and took it to Dallas, Tex., where they opened Neiman Marcus in September, selling fine ready-to-wear to clients with newly minted Texas oil money.

George Huntington Hartford worked at a New York tea company that would become the Great Atlantic and Pacific Tea Company, or A&P. In 1912, his sons, John and George L. Hartford, introduced a standardized “Economy Store” which dropped credit accounts, phone orders, and home deliveries to offer lower prices. By 1930, there were thousands of A&P stores, and the company was doing more business than any other retailer in the world.

In New York, David Hall McConnell sold books door-to-door. He observed that women cared much less about the books than about the free rose-scented perfume that came with them. In 1886, he established the California Perfume Company, based in Suffern, New York, and recruited Mrs. Persis Foster Eames Albee as his first sales agent. Her mission was to assemble a sales force of women who would sell cosmetics to people in their own homes. This company eventually became Avon Products in 1939.

The first off-price retail operation was the Automatic Bargain Basement, opened by Edward Filene in 1909 below his family’s Boston department store to clear merchandise from the shelves without lowering prices on the main floor. All goods were stamped with their arrival date and discounted incrementally, 25%, 50%, 75%, before being donated to charity after 30 days if they had not sold. The markdowns followed the schedule automatically, with no haggling or special pricing decisions required from staff.

In 1861, John Wanamaker started a men’s clothing shop in Philadelphia. In 1876, he purchased an abandoned freight depot that he converted into The Grand Depot, one of the first big department stores. It was located at 13th and Market Streets. Wanamaker had a personal religious belief that business should be conducted fairly. So he placed price tags on every item, offered refunds for any returns, had electric lighting installed on the floors, and installed a restaurant. His business acumen led to his appointment as the United States Postmaster General in 1889.

Jewish refugee Michael Marks had been given a loan of £5 by English wholesaler Isaac Dewhirst, which he used to set up a stall in Leeds’ Kirkgate Market in 1884, advertising his goods with the sign “Don’t ask the Price, It’s a Penny.” In 1894, Marks’ cashier Thomas Spencer invested money as an equal partner, and together they opened “Penny Bazaars” throughout Britain. By 1903, they were running 36 stores, which formed the foundation of what became Marks & Spencer.

When Timothy Eaton, an Irish immigrant, opened a dry-goods store on Toronto’s Yonge Street in 1869, Canadian stores typically haggled over prices and allowed customers to pay on credit. Not Eaton. He would only sell for cash, and gave customers a guarantee of “Goods Satisfactory or Money Refunded.” In 1884, he published a mail-order catalog, so settlers could get clothes, foodstuffs, and even pre-cut kit houses from Eaton. By the time he died in 1907, his Toronto business alone had over 9,000 workers.

Sebastian Spering Kresge was a traveling tinware salesman who saved up enough money over the years to invest in a dime-store partnership in 1897. He soon took full ownership of his Detroit store, where he promised customers “Nothing Over Ten Cents.” That small chain of dozens of stores grew into hundreds over the next several decades, and eventually, the dime-store chain paid for the company’s first Kmart discount store in 1962.

Alfred Fuller was not always wealthy. After moving from the family farm in Nova Scotia to Boston, he lost three jobs. He then moved to his sister’s home in Hartford, Connecticut, where, in 1906, armed with only $75, he constructed a hand-turned brush-making machine in her basement. Fuller designed durable wire brushes for particular tasks. At night, he made brushes. During the day, he peddled them door to door. He recruited a national sales force, the “Fuller Brush Men,” who signed a courtesy pledge. Within a few decades, annual sales topped $100 million.

James Cash Penney started out with his own business, a Colorado butcher shop, that failed almost immediately. In 1902, Penney put up $2,000 to buy a third of a store called The Golden Rule in the coal-mining town of Kemmerer, Wyoming. Penney demanded payment in cash, no credit, to keep costs down and prices low. He gave store managers who excelled at their jobs a share of profits and a stake in a new store whenever the chain expanded. Rebranded as J.C. Penney in 1913, it flourished in hundreds of small Main Street towns.

Charles Walgreen took out a loan from his dad for the Chicago pharmacy where he was working, installed brighter lights, and began selling inexpensive house-brand products and operating a lunch counter. In 1922, Ivar “Pop” Coulson, one of his soda fountain employees, began mixing ice cream into malted milk, inventing the double-rich malted milkshake. The shake’s popularity helped draw throngs of customers through Walgreens’ doors. When Walgreen died, he left behind a thriving chain with hundreds of stores.

It was Aaron Montgomery Ward, a traveling salesman, who saw that rural farmers were paying enormous markups to middlemen at their local country stores. In 1872, he published the first general mail-order catalog from Chicago, a single sheet listing only a few products, and shipped the orders by train. A few years later, he added the phrase “Satisfaction guaranteed or your money back.” Within about 10 years, the catalog was hundreds of pages long with thousands of items, sold entirely through the mail until stores were opened many years later.

H. & D.H. Brooks & Co. was founded by Henry Sands Brooks in New York City in 1818, at Catharine and Cherry Streets. In 1849, during the California Gold Rush, the company introduced mass-produced suits that were ready to wear. His four sons inherited the firm in 1850 and rechristened it Brooks Brothers. A customer no longer had to wait weeks for his suit to be made; he could simply put one on and walk out of the store wearing it. Brooks Brothers later outfitted 40 U.S. presidents.

Prior to 1916, the process at grocery stores was straightforward: A clerk would pull out each item for you from behind a counter. On September 6, 1916, in Memphis, Tennessee, grocer Clarence Saunders changed all that with the opening of the first Piggly Wiggly. Shoppers entered through a turnstile, grabbed a basket, chose their own items from open shelves, then took them to a checkout stand. He received a patent for the concept in 1917 and then began franchising it across the country. He built the self-service grocery model almost every store uses today.

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