Post New

I was wondering why I hadn't heard of a couple of high-end stores I fondly remember from my youth.

Founded in 1867, Keuffel & Esser went out of business primarily due to the rapid advancement of technology (the hand calculator, CAD systems, laser-based surveying equipment) that made their core products obsolete. The company, which specialized in surveying instruments, drafting supplies, and slide rules, experienced a sharp decline in market share and filed for Chapter 11 bankruptcy in 1982.

Hoffritz, a purveyor of the Victorinox Swiss Army knife, Solengen steel cutlery, straight razors and such, went out of business in 1993 primarily due to declining sales in the early 1990s, which was exacerbated by financial problems including being cut off from inventory by suppliers due to non-payment.

During my youth, NYC was cluttered with department stores. Since then, the landscape of the city has changed. On one hand, the Times Square area, once home to obvious street walkers and peep shows now sports an M&M candy store and Disney.

On the other hand, people would come to The City to shop at its multitude of department stores. Since then these come to mind as the departed (year of closure given to show how they align with various financial trauma):

Store Name Year Closed
Georg Jensen Inc. (NYC) 1968
John's Bargain Store 1971
Orbach's 1971
S. Klein 1975
Arnold Constable & Company 1975
Franklin Simon & Co. 1979
Martin's (New York) 1979
Korvette's (E.J. Korvette) 1980
J.W. Mays 1981
Gimbels 1987
B. Altman and Company 1989
Times Square Stores 1990
Bonwit Teller 1990
Alexander's 1992
A&S (Abraham & Straus) 1995
Woolworth's (NYC) 1997
Fortunoff 2009
Takashimaya 2010
Syms 2011
Loehmann's 2014
Henri Bendel 2019
Barneys New York 2020
Century 21 2020
Sears Roebuck (NYC) 2021
Lord & Taylor 2021
Hammacher Schlemmer 2023

So, we are left with Macy's (empty of customers), Bloomingdales, Bergdorf Goodman (if you haven't heard of them, you can't afford to shop there) and the relative newcomer - Nostrum's (which is not in great shape either). And, while no Walmart's, we have TJ Maxx, Marshals, Targets, Costco, BJ's and recently, Ross for Less. I still miss shopping for my clothes and shoe at Sym's and my wife misses Loehmann's - both of which were outlets for the NYC high-end garment trade (where they bought their inventory by-the-pound (literally) at the end of each season) before most manufacturing migrated to China et al.

To get the maximum shopping variety, we now turn to Amazon instead of their ancestor - the Sears catalogue.

How things have changed,

Jeff

Founded in 1867, Keuffel & Esser

In my high school and college classes, I always had a K&E drafting machine.

The City to shop at its multitude of department stores.

Is Bond's still around?

The one I shopped, via print mail order catalog, and on line, was J&R Music World.

Steve

...my wife misses Loehmann's

I am with your wife. I loved Loehmann's, and still have some amazing outfits from them. Also really mourn the demise of the original Filene's Basement in Boston, though the bastardized chain version of the store I was glad to see go. Those were simply mass market without soul and no great values. As a kid on field trips into Boston I would often take off with friends to shop The Basement, somehow never questioned by the teachers about the large bags of goodies I brought back home on the bus. There was a real art to trying clothes on in public without running into decency issues, (no change rooms, while Loehmann's at least had single sex communal ones.) Worst case scenario I bought the clothes and ran across the street to Jordan Marsh to use their change rooms, running back to return what I didn't want. My current leather pocketbook was bought at the Boston Filene's Basement. Great quality stuff!

Thanks for the trip down memory lane.

IP

Bonds closed in 1977 (my guess is they couldn't possibly sell enough to pay the rent.

Anecdotally, the "R" (Rachael) in J&R was my "Big Brother" when I was a freshman at Polytechnic Institute of Brooklyn (and was embarrassingly beautiful for a kid to be seen with the gorgeous graduating senior). Both Rachael and Joseph had immigrated independently from Israel. It is my understanding that the couple found the store, which existed from 1971 to 2014 was being excessively challenged by mail-order, but had used their profits to buy most of the commercial buildings along the row, opposite NYC's City Hall, and they transitioned into the real estate business (and, I guess it was more profitable to rent their store's space than to run the store. Good story here:

https://www.forbes.com/sites/heathersenison/2019/0...

My personal favorite, Syms, went out of business in 2011 due to a combination of intense competition, a weak economy, and a decline in their ability to acquire inventory.

Tough competition came from the rise of other off-price retailers, department store outlet stores, and the growth of online discount sites, which eroded Syms' competitive advantage. Additionally, the economy hurt consumer confidence and spending, while a shift in consumer tastes away from the men's suiting that made up a large part of their sales also played a role.

Intense competition: Syms faced increasing competition from a growing number of rivals, including the large-scale expansion of similar off-price retailers like TJ Maxx and Marshalls, department stores opening their own outlet centers, and the emergence of online discounters.

Weak economy: The 2008 recession and subsequent economic downturn significantly impacted consumer spending and confidence. This was a difficult environment for a company that relied on consumers' ability to spend, even on discounted items.

Decline in buying opportunities: A key part of Syms' business model was buying overproduced or end-of-season merchandise directly from manufacturers. As brands began to create their own outlet stores and sell directly to discounters, the supply of this discounted inventory dried up, making it harder for Syms to secure profitable deals.
Changing fashion trends: The company's business was heavily reliant on men's suiting, which was a large part of its sales. As the trend toward casual dressing grew, demand for formal suits declined, further hurting Syms' core business.

Strategic missteps: The acquisition of Filene's Basement in 2009 was intended to attract a younger female demographic and create synergies, but it did not go well. The integration was difficult, and management was unable to adapt the combined company to changing customer demands.

In addition, they expanded to multiple outlets and what bargains they could find now had to be spread across all of their stores. Their multi-story flagship building in NYC's financial district was probably worth more in real estate value than the rest of the company.

This also reads like the almost identical story of my wife's favorite - Lohmann's. Back "in the day", when the "chain" had two locations (one on the Grand Concourse in the Bronx and the other in Flatbush, Brooklyn), old Mrs. Lohmann used to cruise the garment center of Manhattan with a bag full of cash, buying high end clothing at a per-pound basis - with the proviso that the designer's label on the collar had to be snipped (so it couldn't be returned to an official retailer for refund). Her kids expanded the company to numerous locations and its demise was nearly identical to Sym's.

Jeff

Keuffel & Esser...

I have a K&E slide rule, manufactured sometime before the 1960s as best I can tell (patent date 1919, very battered but robust leather case). I like to think it may have been used by an engineer working on the Apollo Project. Had a nice circular slide rule also made in the 1960s (purchased new), but it was lost to multiple moves.

I have a K&E slide rule,

I had a Pickett Simplex Trig, for years. After a couple years, the college coursework exceeded it's ability, so I added a bigger Pickett. When my mom sold her house, in the mid 80s, I added the slide rules to the stack in the garage sale. Couldn't believe it, but someone bought them.

I used an Alvin drafting set for years too. I thought Alvin had gone out of business, but I found a web site for them.

Steve

I went to a rather unique public high school (Brooklyn Technical High School) whose original premise was that not all students could afford to go to college, so they offered tracks in electrical, mechanical, aeronautical and chemical engineering as well as architecture and industrial design teaching a variety of courses in each which approximated those taken in college. The school was rather large (6,000 students +/-, ten stories, 12 double-sized elevators) and had modern labs, shops and facilities for each program. The common core, taken by all, included up to four years of assorted technical drawing (along with a number of years, depending on track, of machine shop, foundry, pattern-making and so on). Entry to the school was strictly by performance on a standardized test which was tough enough that the class was largely made up of valedictorians and salutatorians from schools throughout NYC. That also meant that the majority of students took multiple advanced placement (college credit) courses - which generally meant that going to college was a walk in the park for most.

Anyhow, every student not only had a slide rule (the K&E was the obvious luxury car), but also a professional-quality drafting set of compasses, triangles, mechanical changeable lead pencils, India ink pens (not to mention a micrometer, drill bits, lathe tools, a 6-inch steel scale) and so on.

So, fast forward to when my firm was in the business of selling CAD (computer aided design) systems during the late 1980's. Keeping a rather long story short, we ended up setting up the first classroom dedicated to teaching CAD in the NYC school system at my alma mater. I strongly advised that they teach a year of hand drafting before migrating the students to the computers in order to give them the basics of the craft. Well, that advice lasted about six months and, from then on, students started on the CAD systems (we had equipped a number of addition rooms by then) and all the tools required for hand drawing became land fill. There was a local store (between the nearest subway station and the school) which had supplied these tools since the 1940's. After this (and a couple of other changes to the curriculum) the store closed its doors for ever.

Changing hats to my construction-oriented divisions, in many cases we had to build what others drew. CAD systems allowed anyone with a minimum of training to turn out beautifully crafted drawings very quickly. Unfortunately, that didn't mean the designs were necessarily very good and the ability of CAD systems to mirror and duplicate parts of drawings meant design flaws could more easily be multiplied.

It was an interesting transition to watch, but unfortunately, during the 1990's the school had a principle who "didn't get it" and who literally scrapped the machine shops and so on - to the extent that those who came after him couldn't recreate the infrastructure and had to create new curriculum (for my piece of that, I donated funds to the school to build a genetic research and gene-slicing lab.

That first CAD lab was my first significant sale to the NYC school system - which, with its 1853 school buildings, in aggregate, became our largest customer for goods and services including design/install of school-wide networks, surveillance system, auditorium audio/visual systems as well as a vast array of hardware items.

It's funny - what goes around, comes around.

Jeff

To get the maximum shopping variety, we now turn to Amazon instead of their ancestor - the Sears catalogue.

This has to be one of the worst, mistimed exits in history. Sears stopped sending out the catalog in 1993. Amazon was founded in 1994. Clearly Sears already had the infrastructure in place to bring customers and “home delivery” together, they’d been doing it for decades. But I suspect they didn’t have a single computer literate person in the hierarchy of the organization and never thought about it, I presume. Not that the trajectory of on-line would have been the same, just an interesting business juxtaposition.

Speaking of which: Western Union had the chance to buy the telephone from Alexander Bell, but said “Nah, nothing there.”

Yahoo had the chance (twice!) to buy Google for a pittance, but bid low.

Viacom could have had Facebook for $1.5B, but passed.

Blockbuster showed the Netflix boys the door when they came looking to sell.

Both Oracle and Cisco had offers to buy Salesforce, but didn’t.

Of course Microsoft could have bought all of Apple for a pittance after the dark days of Sculley but didn’t, and thank goodness for that.

Lots of opportunities flubbed. Probably more that I haven’t thought of.

Changing hats to my construction-oriented divisions, in many cases we had to build what others drew. CAD systems allowed anyone with a minimum of training to turn out beautifully crafted drawings very quickly. Unfortunately, that didn't mean the designs were necessarily very good and the ability of CAD systems to mirror and duplicate parts of drawings meant design flaws could more easily be multiplied.

My BIL was an aerospace engineer and worked on rocket motors. He started off in the days of paper drawings and of course transitioned CAD. He said it took just as long as long to come up with a final drawing on CAD as it did on paper. The difference was that they'd draw a part maybe six times on paper and 50 times on CAD. The result was a better drawing.

The school was rather large (6,000 students +/-, ten stories, 12 double-sized elevators) and had modern labs, shops and facilities for each program.

Mine wasn't so grand: 4 floors, probably about 1500 students. Elevators are for wimps! The building had been built in two phases, with the new section built in 1924. A bit disturbing is the "new" Kalamazoo Central building is now older than "old Central" when I started there. The building was U shaped. Of course, my EE class was on the ground floor, near the end of one end of the "U", and my English class, when was next, was on the 4th floor, near the other end of the "U". Didn't see many fat kids in that school. Several years ago, I told my doc I had come across my draft card. Told him the card reported my weight as 155lbs. He said "you were skinny!". I got a lot of exercise on those stairs every day.

(along with a number of years, depending on track, of machine shop, foundry, pattern-making and so on)

The Trades are pretty much gone from Michigan high schools. The schools teach to the "no child left behind" tests, and everything else has generally been defunded. I have told the story before about my coworker, asking for driving school recommendations for her spawn, as Livonia, the middle class Detroit 'burb where she lives, even defunded driver's ed.

There was a local store (between the nearest subway station and the school) which had supplied these tools since the 1940's. After this (and a couple of other changes to the curriculum) the store closed its doors for ever.

One day, at the pump seal company, 1980ish, one of the other guys in marketing, where I worked, came over to me and asked how the draftsmen in engineering did their lettering so nice and neat. Art had been an education major in college, so drawing the house he wanted to build required a skill set he had not developed. I flipped open my phone book to Wheaton Blue Print Supply, and told him he needed a lettering template. He picked up a template that night, and showed off his handiwork to me the next day. I just looked on line. Appears Wheaton has gone toes up.

Steve....obsolete

Of course Microsoft could have bought all of Apple for a pittance after the dark days of Sculley but didn’t, and thank goodness for that.

Somewhere, in my collection, I have a DVD of "Pirates of Silicon Valley", recorded off the air, when it was new. An interesting watch. So many guys named Steve, among we boomers. iirc, the movie ends with Microsoft buying into Apple.

Steve

Of course Microsoft could have bought all of Apple for a pittance after the dark days of Sculley but didn’t, and thank goodness for that.

Let's not forget Spindler and Amelio. It was Steve Jobs who made the agreement to sell $150 million of Apple stock to Microsoft. Apple got desperately needed cash and Microsoft's promise to continue making Office for the Mac's OS. Microsoft got a defense against government claims that it was an illegal monopoly. I'm doing this from memory, but I think Apple also agreed not to sue Microsoft over Windows infringing on Mac patents and copyrights.

OK, as long a we are doing anecdotes, back during the summer I graduated high school, I got a job as a machinist (yup, that shop stuff actually came in handy - as did the technical drawing a few months later when I got a part-time job as a graphic artist while in college). On my first day, the foreman called me into his office. He opened a drawer and handed me a blueprint describing a bearing. He asked if I could get him one by noon. OK, easy peesy. It took me an hour or two (as I was trying to get the sizes accurate to the thousandth of an inch to show off).

I proudly brought it into the foreman's office. He opened a drawer and took out an identical on. He put his micrometer on mine and compared it to his. "Pretty good", he said. "But next time use your brain!". It turned out that the blueprint's title box showed that it describe a bearing made by the company next door to our shop. He opened their catalog and showed me it cost something like $2.13 and obviously it would have made sense to simply buy one instead of wasting a couple of hours.

I've never forgotten the lesson - sometimes spending money saves money.

Jeff

The need for an operating system: In 1980, IBM needed an operating system for its upcoming personal computer. They initially approached Digital Research Inc. (DRI), a company that was the leading vendor of operating systems for personal computers with their CP/M system.

A deal falls through: Negotiations between IBM and DRI for a licensing agreement failed over financial terms. IBM wanted a one-time purchase, while DRI wanted a per-copy royalty fee.

Microsoft's opportunity: In the meantime, Bill Gates of Microsoft learned about 86-DOS, a CP/M-compatible operating system created by Tim Paterson at Seattle Computer Products. Paterson had written 86-DOS based on the publicly available CP/M technical documentation.

MS-DOS is born: Microsoft purchased the rights to 86-DOS for $50,000 with an agreement to provide, cost-free, any "updated" code to . They then licensed this system to IBM as the "IBM PC DOS" for a one-time fee of $50,000, while retaining the right to license it to others as MS-DOS.

Gary Kildall's reaction: When Gary Kildall found out about the deal, he threatened IBM with a lawsuit, claiming that MS-DOS was a copy of CP/M.

IBM released the PC with CP/M initially, which gave Bill Gates the time to re-write section of code that were in question. Then PC-Dos was released
The outcome: IBM responded by agreeing to make CP/M-86 available for the PC as well. However, they priced CP/M-86 at $240 and MS-DOS at $40, ensuring most customers chose the cheaper option. CP/M-86 was too late and too expensive to gain market share.

The controversy
CP/M influence: Critics, including Kildall and some forensic experts, argued that 86-DOS and MS-DOS were so similar to CP/M that it was a form of copyright infringement, though 86-DOS was technically a different product.

Paterson's stance: Tim Paterson insisted that he did not copy the CP/M code but instead created his OS based on the CP/M manual's specifications.
Legal and forensic evidence: While DRI's lawyers claimed there was evidence of infringement, a 2012 analysis of the code by a software expert found no evidence of direct copying from CP/M into 86-DOS or MS-DOS.

Seattle Computer Products (SCP) sued Microsoft in 1986, with the trial beginning that year and an out-of-court settlement reached in December. The lawsuit stemmed from a 1981 agreement regarding the licensing of the 86-DOS operating system, which SCP claimed Microsoft had misrepresented.

The conflict: The lawsuit arose from a 1981 agreement for the operating system SCP had developed, which Microsoft had bought the full rights to. SCP sued, alleging fraud and unfair competition, claiming Microsoft had not been truthful about IBM being a licensee, and that the original agreement was not meant to be exclusive. They claimed Microsoft owed them license to sell the re-write from PC/MS-DOS to version 2.0 and Microsoft said that, since it was not the same code, it was not covered by the agreement.

The trial and settlement: The trial started in late 1986. While the jury was deliberating, Microsoft and SCP reached an out-of-court settlement. Microsoft paid SCP $925,000 to end the litigation and to buy back all existing license agreements which gave SCP enough money to pay off their attorneys.

Seattle Computer Products (SCP) went out of business in the late 1980s, with a factory fire in 1984 contributing to its closure. The company struggled to compete as the market shifted to PC-compatible computers after Microsoft's acquisition of its operating system, 86-DOS and as they had lost the ability to sell a perpetual license to MS-DOS to another vendor due to the outcome of the lawsuit.

Jeff

Yahoo had the chance (twice!) to buy Google for a pittance, but bid low.

Larry Page and Sergey Brin tried to sell their search algorithm to Excite for $750,000. Excite got cold feet because Page wanted to replace Excite's entire search algorithm and plus Excite made money by displaying adds. If users got their results too fast they would leave the site.

I have told the story before about my coworker, asking for driving school recommendations for her spawn, as Livonia, the middle class Detroit 'burb where she lives, even defunded driver's ed.

They don't teach it in schools around here either. Which I think is bonkers. The ability to drive is a basic adult life skill.

Mom used to take me shopping at so many of these stores. I still remember that B. Altman's smelled good because they had old wooden escalators instead of metal escalators. As for Loehmann's ... well, we spent many an enjoyable shopping day. And we would go to Georg Jensen to admire the Scandinavian designs.
Wendy

We had G. Fox in the Hartford area. Incredible store. One of the best in the country.

Mom would order baby clothing. The entire truck would come with racks of clothing. She'd try us in several things and send it all back. Not a problem.

One store not on your list that you probably have heard of lately is Abercrombie & Fitch. Abercrombie & Fitch started off as a high-end outdoor adventure outfitter based on New York City. They eventually fell on hard times and declared bankruptcy in 1976. The brand however survived and was later purchased by Les Wexner, who operated such brands as Victoria's Secret, Lane Bryant, Lerner, and other top fashion brands. Wexner also retained Jeffery Epstein as his financial advisor, but that's a different story. Abercrombie & Fitch then became the sexy, casual fashion brand we know today.

Back when my reflexes were fast and my eyesight keen, I use to trap shoot competitively. One of my shotguns that I still own is Perazzi. It is stamped on the barrel as imported from Italy by Abercrombie & Fitch. It blows people's minds who don't know the brand history when I show them that. The kicker though, is "Fitch" is misspelled "Fith." Somebody had one job...

I've never forgotten the lesson - sometimes spending money saves money.

I run into this all the time with my OCD oriented engineer DH. He does things to tolerances that are required to minimize the risk of a nuclear meltdown, as opposed to the job on hand, such as putting in a patch of drywall, which was my first clue with him. I was rehabbing a 250 year old house when we started dating, and indeed just about the only time I had to "date" was if he came to help me hang drywall. I left him with a small job to do and went off to tackle a bigger project upstairs, only to realize it had been over an hour since I had seen him start what should have been a 5 minute job. I found him pulling the piece of drywall out one more time to shave a miniscule amount off for a more precise fit. Instead I grabbed a piece of 2x4 and tapped it into place. That patch didn't need screws and almost didn't need tape and mud!

But he was and is a perfect fit for me, even 32 years and multiple home rehabs later. I've come to accept his OCD hours long search for something that costs a nickel, and he turns a blind eye to what he termed my "anal unretention," (strong attention to detail with what looks like zero organization: if you put things away I will never remember where they are, but leave them around and I can pinpoint their location exactly, because I will remember where I left it.) He has forced me to test my gut instincts on real estate and other investments by putting them into spreadsheet form, (which is the easiest way to convince an engineer that an idea is good, and to track your results,) and I have upped his risk tolerance.

Ironically, that is the one house I lost money on, because I couldn't chose the time to sell, with a job transfer for DH making it necessary during a bad housing market and the house not yet perfect. Our buyer sold two years later at twice the price she bought it for. But that job opened my eyes to what a great guy DH was and was worth every penny it cost.

IP,
glad there's nothing to discuss in the economy ;-)

Mom used to take me shopping at so many of these stores.

Lucky you! Shopping with Mom involved the Sears catalog and those awful polyester pants with the fake crease down the leg, or the much preferred, often natural fabric handmedowns that made the circuit from older siblings and cousins. Something like 3 large boxes of clothing packed with mothballs to try on each school year, before the Sears order being put in. Gave me a real love for unique clothing, as my handmedowns were 10+ years older than I. I loved Loehmann's for their unique offerings, and taught our kids the value of thrift stores, particularly on a limited budget. My environmentalist earns a good pay these days, but he still loves to see discarded items get a new life, and rarely buys new, if he can avoid it.

I finally in my late teens showed Mom the joy of going to the store. She loved being waited on and I made sure to be her personal shopper, with her only responsibility being trying on clothes I brought to her change room.

You guys are triggering great memories this morning!

IP

When Abercrombie & Fitch gave up the ghost, I went to their liquidation auction. I ended up with a pair of high-end hiking boots and a diary with the back of a shotgun shell glued to the cover as decoration. The boots are gone, but I still have the notebook - maybe I'll note something in it some day :-)

Another local chain that comes to mind is Daffy Dan's which closed in 2012. They specialized in selling the marketing samples of European fashion houses - frequently at 10% of the suggested retail price, and frequently unique if the style wasn't contracted.

I do a fair amount of traveling around the world. I am saddened by the thought of being in a shopping mall and not being able to identify the country I'm in from its stores. Similarly, as there are no longer factories in the US to have surplus, "outlet malls" are now basically just another retail channel (I remember going to the Vanity Fair factory outlet in Reading, PA. when it was a massive compound of factories and all clothing offered started at 50% of retail price before layering additional discounts).

Fortunately, the less developed a country, the more fun it is to roam through their markets.

Jeff

Avery Truffleman has an outstanding podcast called Articles of Interest. Each season she focuses on a different aspect of apparel. This year it is on the influence that the military has had on what we wear. Companies have made fortunes selling clothing to the military and selling similar items to the general populace and gone bust over time. They have sold surplus until there was no more surplus to sell. Whole market segments, think outdoor gear, have sprung up as an outgrowth of supplying soldiers with gear. You can find the episodes at this link and the podcast on your favorite podcast player.
https://www.articlesofinterest.co/podcast

Clearly Sears already had the infrastructure in place to bring customers and “home delivery” together, they’d been doing it for decades

I had to drive past this place to head off to college: https://en.wikipedia.org/wiki/Sears,_Roebuck_%26_C...(Los_Angeles,_California)

"In December 1926, Sears, Roebuck & Company of Chicago announced that it would build a nine-story, height-limit building on East Ninth Street (later renamed Olympic Boulevard) at Soto Street to be the mail-order distribution center for the Rocky Mountain and Pacific Coast states...
The building was erected in six months, using materials that were all made in Los Angeles County, with the exception of the steel window sashes.[6] To accomplish the feat, the contractor had six steam shovels and a large labor force working night and day shifts. It was reported that rock and sand for the cement work were being delivered to the site at the rate of twenty carloads daily.[5] When the building was completed in late June 1927, the Los Angeles Times reported that:

"All records for the erection of a huge structure were believed to have been broken when last week the Scofield Engineering Construction Company turned over the new $5,000,000 department store and mail-order house at Ninth street and Boyle avenue to Sears, Roebuck & Co., having completed this height-limit project in 146 working days, or 171 days of elapsed time."[6]

The building had nine stories and a basement, with a total floor area of approximately 11 acres (45,000 m2).[6] The building was one of nine Sears mail-order distribution centers built between 1910 and 1929.[2][7]

The sprawling distribution center was a marvel of technology when it opened; employees filled orders by roller-skating around the facility, picking up items and dropping them onto corkscrew slides for distribution by truck or rail. The building was one of the largest in Los Angeles, and it attracted more than 100,000 visitors in its first month of operation, not including shoppers at the ground-floor retail store.[2][8]

Over the years, the building's 226-foot (69 m) Art Deco tower and "Sears" sign became a "beacon for Eastsiders returning home on area freeways,"[8] and has been described by the Los Angeles Conservancy as "one of the dominant visual icons of the Eastside" of Los Angeles.[9]"

This enormous distribution center adjoins not only I-5 - the artery connecting San Diego through Seattle - but a large spaghetti interchange interconnecting with two more major LA freeways and is within a couple of miles of a third.

Ever wonder how all the stuff gets from the Port of Long Beach to the rest of the country? The Long Beach freeway can't nearly handle it all.

Much of it goes via the Alameda Corridor, a 1990s retrofitting of the rail line that used to service the Firestone and GM plants before they closed in the 1970s. It starts at the Port of Long Beach and terminates in a rail yard pretty much just behind the Sears building. https://en.wikipedia.org/wiki/Alameda_Corridor

Workers? Boyle Heights is next door.

Electricity for all that newfangled computer stuff? Bethlehem Steel had a major foundry a mile or so away. It closed in 1982. Don't know much about metallurgy except that steel production is an electricity hog, so the grid in that area was robustly built.

--> Agree with goofy that in retrospect 1970s Sears management couldn't have done much worse.

--sutton
whose mother took him for back-to-school clothes there a time or two in the late 1960s/early 70s. Not a lot of hand-me-downs for a growing boy from two older sisters

Another local chain that comes to mind is Daffy Dan's which closed in 2012. They specialized in selling the marketing samples of European fashion houses - frequently at 10% of the suggested retail price, and frequently unique if the style wasn't contracted.

I remember Daffy Dan’s (by reputation only); others have used this trick in various genres. In New England there was (is?) a Building 19 1/2, which was a “more than salvage” (but not much better) warehouse with stuff just dumped on the floor, and you could find the most amazing things: Doors For $5, Hammers for $1, stuff like that.

There is now a thriving, if unorganized business in Selling Returns; I posted about it on the other Macro board (at the Fool) this morning:

Here’s an $846 billion industry you probably don’t think about: Returns. What happens to all that stuff that people send back?

What happens to the stuff no one wants
A lot of things get returned. A lot of things never get bought in the first place.

What do retailers do with it all?

Some of it gets donated, some of it gets sent back to the manufacturer or a retail partner (such as a third-party seller on Amazon), and some of it gets sold to a liquidator for pennies on the dollar.

Once the selected returned or unsold stuff is bundled into big boxes, it moves into what’s called the secondary marketplace. It can be resold in a number of ways, including in places like Dollar General and T.J.Maxx, at flea markets, or through independent shops, both brick-and-mortar and online.

Wirecutter: Reviews for the Real World

We Bought a 450-Pound Mystery Pallet Packed With Returned Goods From Amazon...
Pallets of overstock, returned, and undelivered-mail packages are an indicator of just how much stuff there is in the retail ecosystem.
A couple months ago I was looking for a particular tool that would work with the batteries I have for my others. I found it on Facebook marketplace, and messaged the guy, who gave me the address and I went.

^^^^ above from the article
vvvv below from me

In a dilapidated (to be kind) storefront in a nearly vacant strip mall was around 10,000 sq ft of pods of huge cardboard boxes, the footprint the size of a good size kiddie pool, filled or not (depending on how much of it had been sold) with returned merch. The guy I was buying from ran the place, he sold me the thing I came for, and I looked around and in all that detritus found exactly nothing else worth getting. But it was an education in how “returns” work.

Even more of an education was the handmade sign on the door. “New shipments on Friday, first come first served, no more than 20 people in store at a time, others wait in line here”. So there are apparently “return locusts” who descend on the place when the new stuff comes in, and the rest sits there until he decides to put it in the dumpster, haul it to the Salvation Army, or whatever else he does.

The article is from WireCutter, a subsidiary of the Times, and I can’t find a way to guest link it, but maybe it works without it? Anyway, here you go.


https://discussion.fool.com/t/about-those-returns/...

Here’s an $846 billion industry you probably don’t think about: Returns. What happens to all that stuff that people send back?

A couple years ago, the "news" ran a piece (advertising dressed up as news) about a company that liquidates returns. I pulled up their web site. Looked at things like returned electronics. Prices were barely below retail, with warranty, prices. Nothing but more media hype. Bah.

Steve

Steve, when I was in business, investing in tools was an everyday occurrence. While an electric drill at Harbor Freight might cost $30, a Milwaukee drill might cost close to $200. Why one rather than the other? When your union electricians cost you a hundred bucks an hour, you want them to use tools that are efficient to use and won't wear out during tough duty.

The tool distributor I dealt with also would sell the same tool, with the same lifetime warranty as a "rebuilt" at $125. They looked like they were brand new - because, essentially they were. These were returns which had been refurbished (maybe the cord was bad, or maybe the customer had buyer's remorse). To differentiate them, the serial number had an "R" punched at the end.

Then, of course, in bad times, there are auction sales. during the 1970's and 1980's, I would go weekly to pick over the bones of former competitors who went bankrupt. In those days, it was mainly tools and material for my contracting business which interested me. It was an important lesson. In every field, there are professional auction-goers (I considered myself one) who the auctioneers recognized and who knew each other. While collusion is patently illegal, there was a substantial amount of "interaction" of one sort or another. In my humble opinion, after dealing with dozens of them, there has never been an honest auctioneer born. Auctions bring out the worst in human nature as "winning" just means that you were willing to pay more for an item than anyone else in the room.

During the dot.com period, vast amounts of unopened network equipment was sold for a pittance on E-Bay and the game was afoot again - absent the physical auctioneer and utilizing different techniques to maximize the benefits.

Jeff

Then, of course, in bad times, there are auction sales. during the 1970's and 1980's, I would go weekly to pick over the bones of former competitors who went bankrupt.

Same thing in the office furniture business. I remember having a big conference table in the warehouse that had been bought by one of those "broadband network" operators, who had gone toes up, before we could deliver the table to them. I can't remember right now how the company got rid of that table. I almost remember the company having a furniture liquidation sale in the warehouse one day around 2002, to clear out the stuff from customers who had gone bust, or refused to pay the storage bill. During the Carly Fiorina era, HP built a flock of offices around metro Detroit. We installed all the furniture. Then HP tossed Carly, and shut down all those redundant offices. We were paid a second time to take all the furniture out of those spaces. iirc, the furniture, only 2-3 years old, went in steel scrap. Incredible waste in the office furniture business. One day, I saw one of the warehouse guys taking a couple speedpacks of brand new, in the box, under desk, PC holders to scrap. I rescued a couple. Turned out, I never used them, so I donated them to Salvation Army. Seems they were immediately snapped up by someone, because I never saw them on the shelves in the store.

During the dot.com period, vast amounts of unopened network equipment was sold for a pittance on E-Bay

Nothing new under the sun department. My grandfather worked as a car/truck mechanic from the 20s to retirement around 1960. I remember him talking about other mechanics he knew, during the depression. The guys would lose their job, then pawn their tools for a pittance, for booze money. Then, if they did find a new job, they couldn't take it, because they didn't have any tools.

Steve

Same thing in the office furniture business.
______________________________________________

During my tenure of business ownership I had the dubious pleasure of moving them three times.

At the first location, the office furniture would today be deemed antique (a roll-top desk, some oak display cases which were refugees from some general store, etc.), but back then were deemed junk. When we moved to the next location, that "old wood crap" was trashed and we bought modern wood-grain Formica topped desks with chrome-plated legs - the sort Staples might sell today. We tossed the 1.5 ton "walk-in" railroad safe for a more petit Mosler and so on. That stuff survived the next move.

Then came the discussion with the moving company for our next move. He quoted a price and then made a pitch if we needed any upscale Steelcase furniture (in pristine near-new condition) where a desk and return would cost $115 delivered (it seems that when large firms moved in NYC, they bought new furniture for the new location and gave the "old" stuff to moving companies for free in order to turn over an empty floor to the old landlord. He also pitched me on crushing any old furniture we had at $5 each. I asked him how much he was charging to move each of my desks and he said $95. When I ask if that meant that for $20 a piece I could ditch all my old furniture and have him deliver far better pieces in newer condition, he pause for a moment absorbing what he had just done, looked a bit crestfallen and said, I guess you could do that - so that's what I did. At the same time, I bought a load of five-drawer Steelcase filing cabinets as well as a bunch of lateral files at $25 each.

When I sold my business, the guys who bought it didn't want any of my "old" furniture and, instead, bought a bunch of cheat Formica topped desks with chrome legs for their new place. I had the principal from the high school I attended send someone down to tell me what they wanted of the 18,000 square feet of tools, material and furniture. They sent about a dozen kids, and a shop teacher, rented a huge box truck and ended up filling it 14 times over the next week or so. The last couple of loads included the filing cabinets as the principal, without counting how many I had, said "and while you are at it, send me any filing cabinets you have". He should have been careful what he wished for :-). Besides those, they ended up with a complete CNC machine shop, and a massive amount of tooling ranging from diamond core drilling rigs to fiber optics test equipment.

Fortunately, the school had a vacant former machine shop room, on the first floor, measuring about 40 feet by 100 feet that this stuff went into until they could disperse their loot throughout the massive building (my high school took up 2/3 of a city block and was ten stories high).

Jeff

He quoted a price and then made a pitch if we needed any upscale Steelcase furniture (in pristine near-new condition) where a desk and return would cost $115 delivered

Every large user has their standard finishes. If one company wants to dispose of some furniture, it will be very difficult to unload, because it probably will not match anyone else's standard finishes. So resale value is peanuts, compared to the exorbitant price Steelcase charged for that stuff new.

I was walking through the warehouse one day, and the guy who did furniture asset management for AT&T was looking over what had just come off a truck for addition to inventory. I can't remember what started the conversation, but Randy mentioned he was going to throw a perfectly good Hon 4-drawer letter size file in scrap. "Why?" Randy said AT&T only keeps Steelcase, this was a Hon, so did not meet their standard, so was going to scrap. Randy also pointed out that the bottom drawer didn't close all the way. I had worked with Hon files, a lot, when I worked at Office Depot. I pulled the reluctant drawer open. It had an aftermarket Pendaflex frame in it, that had been cut too long. I took the frame out, and the drawer worked perfectly. There was a process for glomming on to stuff being disposed of. I pencil whipped the form, had the warehouse manager sign off, grabbed a hand truck, and that Hon file got a ride out to my Civic hatchback, which swallowed that 4 drawer file with no problem. I use that file to this day.

The waste in the office furniture business is enough to make a cheapskate like me cry.

Meanwhile, HNI, the parent of Hon, expects it's buyout of Steelcase to close by the end of this year.

Steve

Post New

Macroeconomic Trends and Risks FAQ

---

Contact Shrewd'm
Contact the developer of these message boards.