Third Floor, Shoes, Hats, Sports

Further background on department stores -- we'll get back to newspapers tomorrow.

It's hard to remember that as late as 1965, the shopping mall was a rare thing -- as rare as a city that didn't have two or three newspapers. Cherry Hill, the mall that set the tone for the future, was only three years old. In 1965 or '66, in my hometown, there was one non-enclosed mall, Glendale, with Ayres and Block's; one, Eastgate, with Wasson's and (I believe) Sears; and a new mall, Greenwood, with Ayres and Sears and/or Penney's. The other department store branches were in strip malls, and Block's had closed a freestanding store in the Broad Ripple neighborhood. In most cities it was similar -- a combination of downtown stores, strip mall stores, and freestanding stores made up the local department store locations. (Some were beautiful, such as in Los Angeles not only the famous Bullock's Wilshire but the Bullock's branch in Westwood and J.W. Robinson Co.'s in Palm Springs.)

Then came the great mall era, as developers put roofs over the entire center. In Indianapolis we got, in quick succession, Lafayette, Washington and Castleton Squares, all with Ayres, Block's, Penney's and Sears. Developers such as DeBartolo and Simon couldn't built them fast enough, as the big department stores -- many of them now part of chains such as Allied and Associated -- along with Sears and Penney's tried to clone themselves everywhere. Malls would have five anchor stores, as even out-of-town department stores got into the act. (The F. & R. Lazarus Co., from Columbus, Ohio, invaded Indianapolis.)

Sears, indeed, had a subsidiary, Homart, that just developed malls. And the change in attitude by Sears and Penney's was crucial. Until now Sears and Penney's had operated a hodgepodge of stores. Penney's-on-the-Circle in Indianapolis was a typical urban department store, but a Penney's in a Muncie or Anderson would be much smaller, and some Penney's were downright minute.

Sears had long built stores on the edges of downtown or even farther out, such as in Fort Wayne, to provide room for its farm stores but also to provide parking. (A lonely former Sears store stands on South Salina Street in Syracuse, blocks from where Dey Bros., C.E. Chappell & Sons, and E.W. Edwards once held forth.) Small-town Sears stores, though, were right on the main street. And when it got to the largest cities, Sears and Penney's weren't even downtown. Now both companies saw a way to create a new model based on nearly identical shopping mall stores, where they would have no disadvantage next to Younker Bros. or J.L. Brandeis & Sons or whoever the local merchant was.

The big-city stores, trying to get bigger to compete with Sears and Penney's and the discounters, and quickly running out of malls in their area, knew that they already drew customers from surrounding towns and could promote themselves to more on TV. They had started going into surrounding cities in the 1950s and early 1960s -- Burdine's from Miami to Fort Lauderdale, C.J. Gayfer & Co. from Mobile to Pensacola -- but the malls made it easier. Because the malls to some degree advertised themselves just by existing, and pulled shoppers in just to see the marvel of 72-degrees-in-any-weather, a store merely had to show up; success wasn't guaranteed, but it beat trying to establish yourself at the edge of Main Street.

Hochschild Kohn of Baltimore went into York, Pa.; the Philadelphia stores colonized malls in Reading and Harrisburg. In many cases the local department store didn't have the interest or the firepower to follow. A mall opened in Logansport, Ind., with, I believe, Penney's, Sears and Kmart; the Schmitt-Kloepfer Co. Golden Rule Store remained downtown with no mall presence (and no nearby Penney's or Sears, to draw shoppers, either).

I remember going to Fashion Square in Saginaw and wondering why the local store, William C. Wiechmann Co., had such a small outlet as opposed to Hudson's, Penney's and Sears. Only later did I realize that was all they could afford to commit to when the mall opened, based on their business, which draw only from Saginaw whereas Hudson's by that point drew from most of Michigan.

The urban unrest of the 1960s, meanwhile, scared middle-class white shoppers away from downtowns, as they sank into a nadir from which some have only now begun to emerge (and many still have not). And rulings in restraint-of-trade cases kept department stores from signing exclusivity agreements with brand-name manufacturers. This is a bit above my expertise, but as I understand it, previously, department stores could sew up the rights to sell, say, Sunbeam appliances and the manufacturer could set a floor price; if discounters could even get the goods, they could not undersell and could only do so with "off-brand" merchandise, the sort of stuff that used to catch fire in Consumer Reports tests. Now Kmart and Woolco could sell the same irons and toasters as the department stores, but for less. This is probably a gross oversimplification, but the result of whatever happened was that the department store no longer had a lock on selling, say, GE Toaster Ovens for $14.99.

More competition with lowered barriers, legacy infrastructure, transportation disruption, changing social attitudes, even "free" (as in the acres of free parking) -- sounds like the problems facing another business we know well.

Tomorrow, on to the fourth floor -- what department stores did to compete.