F. W. Woolworth Co. - the history of the "five and dime"
Frank Woolworth was frankly, a genius. He was also a man of vision, who founded one of the most successful multinational retail chains ever, and made it a household name. He began, as many do, with a mistake, opening his first store in 1879 in Utica, NY with prices too low. His second attempt later the same year, in Lancaster, PA, was much more successful, so much so that he decided to go ahead with more stores. Over the next ten years, he opened a further 21 stores across the country, and applied the principle of partnership management, whereby local businessmen ran the store, along the lines of a franchise. By 1904, there were 120 stores throughout the States.
The secret of Woolworth's success was in recognising that selling small quantities with a high markup was damaging to a mass market. Instead, he focused on selling huge quantities of low-priced goods, and did it in such a way as to make his customers feel they were rich. His stores specialised in everyday household and personal items at rock-bottom prices. He also placed stores carefully, and by installing soda fountains in many of them, turned them into meeting places, informal community centres. This in turn,developed a fierce loyalty in his customers, who attached the Woolworth name to good value and a feel-good factor.
Store placement also contributed to success. Most stores were in the outlying, middle-class areas of the cities, and the business districts. Initially, relatively few were in working-class areas, although the balance began to change in the 1920s, but even then, the company's prime market place were middle-class residents.
In 1905, the company was incorporated, and by 1909, Woolworths was ready to move overseas, and began opening stores in Great Britain and Eire. This began a period of massive growth and strengthening, and he began meeting with competitors to discuss mergers, in 1911. At the time, Woolworth had 319 stores, his competitors, a total of 254. The new company was worth $65 million in March 1912, when all the 596 stores asumed the Woolworth name.
The huge turnover still provided for large profits, even though margins were low. His surplus funds, and vision for growth were such that he commissioned The Woolworth Building in Manhattan, which was completed in 1913, at the time, the tallest building in the world. This symbol of strength and size well reflected the strength of the business which peaked at over 10,000 stores worldwide.
The changing face of commerce has meant that the Woolworths name has declined in worth over the years. As more and more money circulated, and consumer confidence increased, sales began to drop, and Woolworths went looking for buyers. The corporation was eventually sold in 1997, to Walmart, who bought a substantial holding in the US, and in Britain, the Kingfisher Group took a similar interest in the UK operation.
History, Culture and Nostalgia
So many people have fond memories of Woolworths - it was more than just somewhere to shop, catch bargains or stock up. It was a gathering place - where you met your friends, often having lunch or coffee. In fact, A Woolworth's lunch counter was instrumental in kick-starting a social, political and racial revolution. On 1st February, 1960, a group of young black students met in the store in Greensboro, North Carolina, and sat for lunch. The refused to leave when asked to, and staged what was known as the first 'sit-in' protest. Public support grew, and many challenged Woolworth's company policy of racial discrimination, and eventually, they won out. The original lunch counter is enshrined in the National Museum of American History at the Smithsonian Institution's.
Woolworths is still a household name - Christmas in the UK always brings a rash of advertising, and business is growing back slowly, as the "cheap and cheerful" image is slowly shed.
Gorgonzola tells me that WalMart bought out Woolworths in the USA and closed all the stores. Ah, well. They are still doing fair business in the UK though, announcing a £73.1 profit in 2005, based on sales of £2.9 billion.