F. W. Woolworth Company


The F. W. Woolworth Company was a retail company and one of the original pioneers of the five-and-dime store. It was among the most successful American and international five-and-dime businesses, setting trends and creating the modern retail model that stores follow worldwide today.
The first Woolworth store was opened by Frank Winfield Woolworth on February 22, 1879, as Woolworth's Great Five Cent Store" in Utica, New York. Though it initially appeared to be successful, the store soon failed. When Woolworth searched for a new location, a friend suggested Lancaster, Pennsylvania. Using the sign from the Utica store, Woolworth opened his first successful "Woolworth's Great Five Cent Store" on July 18, 1879, in Lancaster. He brought his brother, Charles Sumner Woolworth, into the business.
The two Woolworth brothers pioneered and developed merchandising, direct purchasing, sales, and customer service practices commonly used today. Despite its growing to be one of the largest retail chains in the world through most of the 20th century, increased competition led to its decline beginning in the 1980s, while its sporting goods division grew. The chain went out of business in July 1997, when the company decided to focus primarily on sporting goods and renamed itself Venator Group. By 2001, the company focused exclusively on the sporting goods market, changing its name to the present Foot Locker, Inc., changing its ticker symbol from its familiar Z in 2003 to its present ticker.
Retail chains using the Woolworth name survive in Austria, Germany, Mexico and, until early 2009, the United Kingdom. The similarly named Woolworths supermarkets in Australia and New Zealand are operated by Australia's largest retail company, Woolworths Limited, a separate company with no historical links to the F. W. Woolworth Company or Foot Locker, Inc. However, Woolworths Limited did take their name from the original company, as it had not been registered or trademarked in Australia at the time. Similarly, in South Africa, Woolworths Holdings Limited operates a Marks & Spencer-like store and uses the Woolworth name, but has never had any connection with the American company. The property development company Woolworth Group in Cyprus began life as an offshoot of the British Woolworth's company, originally operating Woolworth's department stores in Cyprus. In 2003, these stores were rebranded Debenhams, but the commercial property arm of the business retained the Woolworth's name.

History

Origin

The F.W. Woolworth Co. had the first five-and-dime stores, which sold discounted general merchandise and fixed price, usually five or ten cents, undercutting the prices of other local merchants. Woolworth, as the stores popularly became known, was one of the first American retailers to put merchandise out for the shopping public to handle and select without the assistance of a sales clerk. Earlier retailers had kept all merchandise behind a counter and customers presented the clerk with a list of items they wished to buy.
After working in Augsbury and Moore dry goods store in Watertown, New York, Frank Winfield Woolworth obtained credit from his former boss, William Moore, along with some savings, to buy merchandise and open the "Woolworth's Great Five Cent Store" in Utica, New York, on February 22, 1879. The store failed and closed in May 1879, after Frank earned enough money to pay back William Moore. Frank soon made a second attempt, and opened his "Woolworth's Great Five Cent Store", using the same sign, on June 21, 1879, in Lancaster, Pennsylvania. Lancaster proved a success, and Frank never forgot the city for the rest of his life. Frank wanted to open a second store in Harrisburg, Pennsylvania, and so he asked his brother Charles Sumner "Sum" Woolworth to join him by managing it. The Harrisburg store opened as, "5¢ Woolworth Bro's Store" on July 19, 1879. After a falling-out with the landlord, that store moved to York, Pennsylvania, opening in March 1880. That store did not last long either, closing three months later. Frank searched for a larger, low-rent building. He found an ideal location in Scranton, Pennsylvania, at 125 Penn Avenue, and opened their "5¢ & 10¢ Woolworth Bro's Store" on November 6, 1880, with Sum as manager. The Scranton store is where Sum fully developed the brothers' "5¢ & 10¢" merchandising model. Sum spent a lot of time working the sales floor, talking with customers and employees. He often personally served customers. Sales grew steadily. By 1881, at Frank's suggestion, Sum bought out his brother's share of the Scranton store in two installments, in January 1881 and 1882. This made Sum the first Woolworth Bro's franchisee.
In 1884, confident enough to open another store, Sum partnered with his longtime friend Fred Morgan Kirby to open a store in Wilkes Barre, Pennsylvania, a neighboring town to the west of Scranton. Fred had been working as the head of wholesale operations at Augsbury and Moore of Watertown, New York. Each man put up $600 to launch the Wilkes-Barre store called "Woolworth and Kirby". Fred managed the new store and, while sales were initially poor, the store soon caught on. By 1887 he used his profits to buy out Sum and expand the store under his name; Sum and Fred remained the best of friends. During this time, Frank was expanding with more stores. Sum's approach was different; he worked to perfect the look and feel of his Scranton store. It had mahogany counters with glass dividers and glass-fronted showcases. The store was brightly lit, new, and the wooden floor was polished to a lustrous shine. The layout was soon adopted by Frank for his F. W. Woolworth stores and became the standard as the two brothers persuaded family members and former co-workers from Moore's to join them in forming a "friendly rival syndicate" of five-and-ten-cent stores. Each of the syndicate chain's stores looked similar inside and out, but operated under its founder's name. Frank Woolworth provided much of the merchandise, encouraging the rivals to club together to maximize their inventory and purchasing power.
At the same time, using his preference to have someone he could trust, Frank brought in their cousin, Seymour H. Knox I, to open a store in Reading, Pennsylvania, under the name "Woolworth and Knox". Seymour had been managing a general store in Michigan.

Rise and expansion

By 1904, there were six chains of affiliated stores operating in the United States and Canada. Between 1905 and 1908, members of the Woolworth Syndicate followed Frank's lead to incorporate their businesses; Sum maintained that he did not need to incorporate his stores. In 1912 the syndicate agreed to a scheme crafted by Frank Woolworth: to join forces and incorporate as one corporate entity under the name "F. W. Woolworth Company" in a merger of all 596 stores. The stock flotation raised over $30 million for the five founders of the merged chains. They all swallowed their pride and accepted Frank's name above the door, with Frank as President of the new Corporation. Sum Woolworth, Fred Kirby, Seymour Knox, Earle Charlton, and William Moore each became a Director and Vice-President. One of the "friendly rival" predecessor chains included several stores initially opened as Woolworth & Knox stores starting as early as September 20, 1884 as well as S. H. Knox & Co. 5 & 10 Cent Stores opened after an 1889 buyout by his cousin, Seymour H. Knox I. Knox's chain grew to 98 U.S. and 13 Canadian stores by the time of the corporate consolidation. Fred M. Kirby added 96 stores, Earle Charlton added 35, Charles Sumner Woolworth added 15, and William Moore added two.
Sum Woolworth continued to maintain his home base in Scranton, PA. He was not the type to get embroiled in the politics, as executives of the different chains sought to establish themselves in the merger. As he did from the beginning, Sum concentrated on improving stores, particularly in his native Pennsylvania, and training up-and-coming managers. Those managers eventually dispersed across the entire company, setting the style and tone of Woolworth stores worldwide.
In 1900, Frank launched his first development plan in the city of his first success, Lancaster, Pennsylvania. Rather than just enlarging his store on North Queen Street, he bought up properties along the street in an area which was not considered a "good" side of town. By keeping his plans quiet, Frank saw to it that real estate prices would not be inflated in that area. When he finished the real estate purchases, he announced his plan to build a building with five floors of offices above a large store. The roof had a garden and an open-air theater. The theater was a huge hit in town, and soon became the city's social center. This project was something of a dress rehearsal for his next venture.
, a 1935 photograph by Olive Cotton with some inexpensive cups and saucers from Woolworths
In 1910, Frank Woolworth commissioned the design and construction of the Woolworth Building in New York City. A pioneering early skyscraper, it was designed by American architect Cass Gilbert, a graduate of the MIT architecture school. The building was paid for entirely in cash. It was completed in 1913 and was the tallest building in the world until 1930. It also served as the company’s headquarters until it was sold by the F.W. Woolworth Company’s successor, the Venator Group, in 1998.
Frank Woolworth, president of F. W. Woolworth, Corporation, died in 1919, in Glen Cove, New York. Sum's demeanor made him the perfect candidate to head the F. W. Woolworth Corporation after the death of his brother. He was non-confrontational, as everyone else positioned themselves in the company. The Board of Directors unanimously asked Sum to take on the Presidency. With his infamous modesty he declined. He did, however, agree to take the new role of Chairman. Company Treasurer, Hubert Parson, took the Presidency. Over the following twenty-five years, Sum saw four Presidents come and go. He gave each one quiet-spoken advice and good counsel. As Chairman, he facilitated debate and ensured issues were properly confronted and argued out by the Board.
For many years the company did a strictly "five-and-ten cent" business, but in the spring of 1932 a 20-cent line of merchandise was added. On November 13, 1935 the company's directors decided to discontinue selling-price limits altogether.
The stores eventually incorporated lunch counters after the success of the counters in the first store in the UK in Liverpool that served as general gathering places, a precursor to the modern shopping mall food court. A Woolworth’s lunch counter in Greensboro, North Carolina became the setting for the 1960 Greensboro sit-ins during the Civil Rights Movement.
The Woolworth's concept was widely copied, and five-and-ten-cent stores became a 20th-century fixture in American downtowns. They would serve as anchors for suburban shopping plazas and shopping malls in the 1950s, 1960s, and 1970s. Criticisms that five-and-dime stores drove local merchants out of business would repeat themselves in the early 21st century, when big-box discount stores became popular.

Diversification

In the 1960s, the five-and-dime concept evolved into the larger discount department store format. In 1962, Woolworth's founded a chain of large, single-floor discount stores called Woolco. Some of these stores were branded as Winfields, after the founder's middle name.
1962 was the same year that Woolworth's competitors opened similar retail chains that sold merchandise at a discount: the S.S. Kresge Company opened Kmart, Dayton's opened Target, and Sam Walton opened his first Wal-Mart store.
The following year, in 1963, Woolworth expanded into the shoe store business with the purchase of Kinney Shoe Corporation, which eventually created the store that Woolworth would be taken over by, Foot Locker.
By Woolworth’s 100th anniversary in 1979, it had become the largest department store chain in the world, according to the Guinness Book of World Records.
During the 1980s, the company began expansion into many different specialty store formats, including Afterthoughts, Northern Reflections, Rx Place, and Champs Sports. By 1989, the company was pursuing an aggressive strategy of multiple specialty store formats targeted at enclosed shopping malls. The idea was that if a particular concept failed at a given mall, the company could quickly replace it with a different concept. The company aimed for 10 stores in each of the country's major shopping malls, but this never came to pass as Woolworth never developed that many successful specialty store formats. Also attempted was a revision of the classic Woolworth store model into Woolworth Express, a small, mall-oriented variant which was dubbed "a specialty variety store'', stocked with everyday convenience items such as health and beauty aids, greeting cards, snack foods, cleaning supplies and school supplies.

Decline

The growth and expansion of the company contributed to its downfall. The Woolworth company moved away from its five-and-dime roots and placed less emphasis on its department store chain as it focused on its specialty stores. Still, the company was unable to compete with other chains that had eroded its market share. While it was a success in Canada, the Woolco chain closed in the United States in 1983. Europe's largest F. W. Woolworth store, in Manchester, England, one of two in the city center, experienced a fire in May 1979. Despite the store being rebuilt even larger and up to the latest fire codes; the negative stories in the press, coupled with the loss of lives, sealed its fate; it finally closed in 1986. During the rebuild and partly as a result of the bad press, the British operation was isolated from the parent company as Woolworths plc. This proved fortuitous as the brand subsequently lasted a full twelve years longer in the United Kingdom than it did in the United States. On October 15, 1993, Woolworth's embarked on a restructuring plan that included closing half of its 800-plus general merchandise stores in the United States and converting its Canadian stores to a closeout division named The Bargain! Shop. Woolco and Woolworth survived in Canada until 1994, when the majority of the Woolco stores there were sold to Wal-Mart. The Woolco stores that were not purchased by Wal-Mart were either converted to The Bargain! Shop, sold to Zellers or shut down. Approximately 100 Woolworth stores in Canada were rebranded as The Bargain! Shop, and the rest were closed.

Transition

Amid the decline of the signature stores, Woolworth began focusing on the sale of athletic goods. On January 30, 1997, the company acquired the mail order catalog athletic retailer Eastbay.
On March 17, 1997, Wal-Mart replaced Woolworth's as a component of the Dow Jones Industrial Average. Analysts at the time cited the lower prices of the large discount stores and the expansion of supermarket grocery stores – which had begun to stock merchandise also sold by five-and-dime stores – as contributors to Woolworth's decline in the late 20th century.

Venator

On July 17, 1997, Woolworth's closed its remaining department stores in the U.S. and changed its corporate name to Venator. In 1999, Venator moved out of the Woolworth Building in New York City to offices on 34th Street.

Foot Locker

On October 20, 2001, the company changed names again; this time, it took the name of its top retail performer and became Foot Locker, Inc., which Woolworth started in 1974. The corporate history of Woolworth is legally included in the history of Foot Locker, Inc., which is the legal continuation of Woolworth.
As part of celebrating F. W. Woolworth's centennial on the New York Stock Exchange on June 26, 2012 a news release featured 1912 Woolworths store and a 2012 Foot Locker store.

Influence on popular culture

Greensboro sit-in

On February 1, 1960, four black students sat down at a segregated lunch counter in a Greensboro, North Carolina, Woolworth's store. They were refused service, touching off six months of sit-ins and economic boycotts that became a landmark event in the civil rights movement. In 1993, an eight-foot section of the lunch counter was moved to the Smithsonian Institution and the store site now contains a civil rights museum,
which had its grand opening on Monday, February 1, 2010,
the 50th anniversary of the beginning of the sit-ins.
Imitation sit-ins also occurred in other cities where there were segregated lunch counters at Woolworth's. In Roanoke, Virginia on August 27, 1960, two women and a boy "...sat at the lunch counter and ordered a slice of pie, a soda and a sundae, all under the watchful eyes of the biracial committee which had organized the event." The names of the three blacks were not reported at the time, and are now unknown. While the incident was uneventful, other sit-ins were completed, also without incident, at 17 other segregated lunch counters in Roanoke.

Presidents

In later years the chairman rather than the president was frequently the chief executive officer.
Gibbons succeeded Burcham as chairman-CEO in 1978 and died in office, succeeded by vice chairman John W. Lynn who was succeeded in 1986 by president Harold Sells.
Farah joined the company as chairman and CEO in December 1994 and Hennig was replaced by Dale W. Hilpert as president in May 1995.

Non-American retail users of the Woolworth name

Former F.W. Woolworth subsidiaries

Currently in business