Every newly formed corporation needs a string of company officers, and so the first men on the F. W. Woolworth & Company team were duly installed: Frank W. Woolworth, president; Carson C. Peck and Clinton Pierce Case, vice presidents; Hubert T. Parson, secretary-treasurer; and Charles Griswald and H. W. Cowan as assistant treasurers. The first board of directors included the name of an old friend and colleague, Harry Moody. One month later, F. W. Woolworth & Co. of Massachusetts was formed, followed by F. W. Woolworth & Co. of Pennsylvania. The executive office remained in the Stewart Building in New York City, but a space in Mineola, Long Island, was secured for the principal office.
The common stock of the new company was only offered to officers, executive buyers, and select personnel. The preferred stock was offered to the same, along with store managers and certain “friends” of the company. The stock went like hot cakes, and between them, there were soon seventy-five shareholders, owning a combined 6,431 shares. Frank was happy when he heard about the quick sale of the shares, as this clearly showed him how much his colleagues believed in him and in the success of his company. However, it was with bittersweet emotions that Frank penned his next General Letter.
“This will be the last letter I shall ever write to you as individual owner and proprietor of all the five and ten cent stores running Jan. 1, 1905. It is a sad occasion and I will tell you later on why I am transferring my business to a corporation. Hereafter I will write to you as a representative of a corporation. I am sorrowful, but modern methods must be pursued. Time is fast flying away and I cannot expect always to be in control of this vast property”
It appears that Frank Woolworth would have preferred to remain an autocratic emperor of his five-and-dime domain, but he accepted the decision to go public as the wisest choice. Never a man to dwell in remorse, he quickly made arrangements for new signs to be placed over the doors of his Red-Fronts: “F. W. Woolworth & Co.”
To call the next five years “prosperous” would be a gross understatement. Woolworth’s Red-Fronts increased in leaps and bounds, and his stores were soon generating more than $50 million in annual gross sales. The only fly in the ointment was the growing “unfriendly” competition: Frank’s original idea had spawned a copy-cat industry of five-and-dimes.
Along with his friendly rivals, such as his brother Charles, and colleague Earle Charlton, Frank was faced with increasing competition from a host of ambitious, sometimes ruthless merchants. One of his greatest rivals was his own cousin, Herbert G. Woolworth (brother of Frank’s loyal employee, Fred Woolworth), who had taken off on his own after a brief training period with Frank. This was all acceptable until Herbert started plagiarizing Frank’s store setups, right down to the red-and-gold mastheads on the front of the buildings. Herbert copied the design and used his “Woolworth” name to create the illusion that he was one in the same as the real Woolworth five-and-dime founder. Soon after, when hostilities heightened, Herbert set out to open stores in the same towns where Frank’s stores were already operating. Frank never forgave Herbert for this indiscretion. He felt it was a dishonorable way to conduct business, especially given their blood relation. Frank considered a libel suit, but never followed through with legal action, partly because every time a rival five-and-dime opened near one of his own, it created more business and a fair amount of publicity.
The rival pressure was also increasing from stores such as McCrory, the Titus Supply Co., H. Germain, Rothchild & Co., Kresge, and Kress. So far, F. W. Woolworth & Co. reigned as the largest chain of five-and-dimes in the entire United States, but if Woolworth wanted to maintain his position, he knew he needed to develop a few new strategies. Individually, these rival merchants did not pose a threat, but collectively they did. This threat escalated late in 1905 when rumors started to circulate that his unfriendly rivals were considering a merger with the purpose of putting Frank out of business. These rumors triggered an unprecedented price battle between F. W Woolworth & Co. and his competitors; if Kress was offering china dishes for eight cents, then Woolworth’s managers would promptly display the same items for a nickel.
The rumored merger did not occur and, in fact, a financial twist of fate ultimately rid some of these merchants from Woolworth’s “worry list.” During the depression of 1907, three merchants—H. Germain, Holmes, and Herbert Woolworth—all went bankrupt. However, that still left the mighty Kress, Kresge, and several other chains to put a damper on Frank’s business. Woolworth realized that the only way to assure long-term success was to take drastic action.
On April 11, 1911, Woolworth gathered his inner circle of friendly rivals for a secret meeting at the old Waldorf Astoria in New York. It was time to discuss the possibility of merging their own respective five-and-dimes into one giant corporation.
All of these men had done exceedingly well in their spin-offs of Frank’s original idea. Seymour Knox had 112 stores in the United States and Canada, Fred Kirby had ninety-six “green fronts,” and was the only one operating in the Deep South. Charles Sumner Woolworth owned fifteen five-and-tens, most of them situated in his favorite states, Pennsylvania and Maine, with a few scattered about New York. Earle Charlton had introduced the five-and-dime concept to the region west of the Rockies, as well as Montreal, Canada, and now had fifty-three stores. Frank himself had over 300, located in the eastern and mid-western United States, and overseas in the British Isles. The men met for many hours, first at the Waldorf, then at the Hotel Plaza. They agreed that the advantages of a merger were substantial. If they joined forces, they would have almost 600 stores in 37 states, along with a fair number in the District of Columbia, Canada, and Great Britain. They would be able to advertise themselves as a coast-to-coast chain. Their buying power would be unsurpassed, allowing them to purchase goods in bulk, and then reap the profits. Most important of all, they could individually and jointly assure that the business would not fall into the wrong hands. Regardless of the fact there were few male heirs among them, the business could stay in “the family.”
Early 1900s photo from Lancaster, Pa., shows Woolworth’s “skyscraper” adorned with Red Cross flags. McCrory set up a five-and-dime right next door.
More contemporary postcard of Clearwater, Florida, shows that McCrory consistently built his own stores next to rival Red-Front, F. W. Woolworth.
The line item that took the longest time to negotiate was Frank’s insistence that the merged company bear his name and his alone. It was true that he had started the entire craze, and had more stores than the rest of them, but this was still a tough nut to swallow. All of the men in that room had worked extremely hard to build their individual five-and-dime chains.
We can presume that Frank used all of his charm, perseverance, and tenacity to persuade his partners to see things his way. It is not exactly clear how he managed this, but in the end he won.
The new company would be called the “F. W. Woolworth Company.”
Frank felt this was a vital step toward preserving the posterity that he had worked his whole life to attain. (It is also one of the reasons why historians, Woolworth descendants, and long-term employees, found it so disconcerting when the Woolworth Corporation changed its name to the Venator Group in 1998.) The details of the merger were ironed out in September 1911, and the legal corporation agreement was signed on Thursday, November 2. Along with the Woolworth brothers, Knox, Charlton and Kirby, there was one more name on the agreement—that of William Moore. Frank had asked if Moore could be in on the deal, and his fellow founders had agreed, knowing how much William Moore had done to help Frank Woolworth make his dream into a reality. By then, Moore and his son were trying to make ends meet with his new five-and-tens in upstate New York. Overnight, he became part of one of the most important mergers of the century.
William Moore, the “sixth founder.”
The Founding Fathers of the F. W. Woolworth Co., 1912.
Left to right: Sitting: Fred Kirby, Frank Woolworth, Seymour Knox. Standing: Earle Charlton and Charles Woolwort
h.
As of January 1, 1912, the combined 611 stores of the circle started operating as a harmonious whole. Frank Woolworth issued a landmark General Letter, announcing that the corporation was about to be formed with a capital stock of $65 million. From then on there would be eight district offices in this country and one in Canada. At the end of this detailed missive, he added: “Please refrain from criticism.”
There was much excitement and much speculation about the merger, and only limited criticism. Most of his employees trusted Frank implicitly, and since their jobs were absolutely secure, they decided to roll with the punches. One inspired employee from Milwaukee even wrote a dramatic poem in honor of the occasion. Following the preliminary buzz, there was a virtual stampede for stock shares when the new F. W. Woolworth Co. offered all of its store managers and executives the chance to buy in at $50 per share for common stock, and $100 for preferred. The sheer number of stores that the F. W. Woolworth Company now owned gave Frank and his partners enormous buying power among distributors. Consequently, the company greatly expanded its selection of merchandise. Lingerie, musical instruments, costume jewelry, men’s accessories, and even inexpensive lines of luxury materials (such as velvet, satin, and angora) soon filled the counters of the five-and-tens.
Stats and Facts about the Great 65-Million-Dollar Merger
TIME CAPSULE
“A Tribute to the Great Merger”
When earth’s last ten-cent store has opened And the new painted red front has dried And the oldest clerk has her station Down near the register’s side, We will look to new worlds to sell to Perhaps Jupiter, Venus or Mars And the master of all the ten-cent stores Will put us to work in the stars!
—D.W. Doerr, manager of Seymour Knox’s Milwaukee store, wrote this piece after hearing of the Great Merger. It is a parody of Kipling’s “L’envoi.”
By the time the Great Merger was concluded, Frank Woolworth was a changed man, emotionally, financially, and physically. The legal pressures of the new partnership, combined with the pressures in his personal life, finally took its toll on sixty-year-old Frank W. Woolworth. He began weeping uncontrollably at odd moments. His joints became swollen and his appetite waned. The man already known as the “King of the Five-and-Dime” was diagnosed with a nervous disorder and ordered to Carlsbad, Austria, for a cure among the healing spa waters. It was not easy for Woolworth to agree to this because he was also in the middle of planning for his greatest structural triumph, the erection of the Woolworth Building of New York. However, he promptly sailed off for Austria, with another rest cure following in Spain. He returned many months later, feeling like he could take on the world one more time.
The Woolworths Take Their Place In Society
Following the merger, the momentum in Frank’s professional and personal life continued to increase at a dizzying pace. Frank W. Woolworth was now a millionaire many times over, and he altered his habits accordingly. While Woolworth was far from “the manor born,” he certainly adapted to a highbrow lifestyle without any visible difficulty. In reality, he had started changing his lifestyle many years before, when the first rush of wealth had begun.
Following the incorporation of F. W. Woolworth & Co. back in 1905, Frank had relocated his executive headquarters into even larger offices in the Stewart Building. This new location offered a view of historic City Hall Park, in the center of Lower Manhattan’s original financial district. “There was an imposing entrance hall,” wrote John Nichols, “a sample room and private offices for the leading executives. There were overhead lighting and mahogany furniture, upholstered couches and gaily painted wainscoting.”
TIME CAPSULE MEMORY
“Angora for a Nickel”
I grew up in Cheviot, Ohio, a suburb of Cincinnati. When I was in high school Woolworth’s was the headquarters for two items crucial to a teen-age girls’ life—nylons and angora. Woolworth’s sold nylons for only fifty cents a pair, and it was the only place in town where we could buy angora, in just about every color. The girls who received a ring from a boy just had to wrap angora around it so the ring would fit perfectly. Some girls even changed the color daily to match their outfits. Angora was only 5¢ a strand back then!
—Diana Hunter, Chardon, Ohio
Woolworth’s desk was now mahogany and gold, flanked by green Moroccan leather chairs. This setting was a far cry from his original Utica store “desk,” which amounted to a tier of package crates covered by cheap muslin. His clothes were now hand-sewn by the best European tailors, his soft leather shoes made by New York’s finest craftsman. His belly was growing larger from the elaborate meals he had his servants prepare and the equally sumptuous gourmet treats he enjoyed in France and Vienna. The farmboy who had once survived on boiled potatoes and chicken, now favored prime roast beef and imported caviar. As a matter of fact, he rarely ate chicken at all, so unpleasant were his early memories of tending them on the farm.
By the turn of the twentieth century, Frank’s three daughters were no longer children. Helena, the oldest, was twenty-two; Edna was seventeen; and the youngest, Jessy May, was almost fifteen. They had been spared the difficult hardships suffered by their parents and were instead coddled and spoiled with glee. All were pretty and polite, and enjoyed their frequent vacations and shopping trips. Helena, or Lena as her family called her, shared her father’s passion for art and antiques. Unlike Frank, however—who preferred to distribute his money only “within the family”—the adult Helena would set up numerous charitable foundations across the United States, and would become a devoted parent who spent as much time as possible with her husband and children.
Jennie Woolworth found herself married to a corporate magnate, a man greatly changed from the young naïve lad she’d met decades before in Watertown, New York. The new Frank W. Woolworth wanted his wife to take her place in high society—whether she wanted to or not. For several years, he’d been gradually moving his wife, and daughters, from humble abodes to glorious mansions.
It all started when, in 1889, Frank moved his family into their first wholly owned home, a modest but comfortable abode at 209 Jefferson Avenue in Brooklyn. Eight years later, they moved again, this time to the beautiful Savoy Hotel at 582 Fifth Avenue. They lived there, in spacious rented suites, on and off until 1901, when Frank purchased a huge, thirty-room marble mansion on the corner of Fifth Avenue and 80th Street. In time, Frank also bought a townhome for each of his daughters and their families. Helena and Charles E. F. McCann married in 1904, and Edna and Franklyn Laws Hutton in 1907. Jessy would not marry for several years, but already had her eye on young dashing James P. Donohue. On Millionaire’s Row, the Woolworths cohabited side by side, although, truth be told, Frank didn’t have much time for family socializing.
Rare photo of the Woolworths in Palm Beach. Frank and Jennie Woolworth along with their daughter, Jessie Woolworth Donahue, c. 1913.
When the breezes turned hot and balmy, the Woolworths often visited the cool country spas in Europe, but they also enjoyed vacationing closer to home. Back in 1893, Woolworth leased his first summer cottage in Asbury Park, New Jersey. For years thereafter, the Woolworths returned to that same cottage, each time with a finer carriage and pair of horses. On the expansive porch of 1109 Grand Avenue, Frank held court in what was then considered the “Monte Carlo of America.” Asbury Park, Allenhurst, Deal, and nearby Long Branch were all popular shore resorts frequented by the creme of society. At first, Frank was not privy to this blue-blood world, so he brought along his own population of the F. W. Woolworth & Co. elite. He could never quite understand, though, why he and Jennie were not included on all the party lists of the seaside “A” crowd. This fact probably hurt him, but he did his best to keep up a good front. Furthermore, even though some snubbed the Woolworths, there were plenty of other wealthy magnates and politicians who did not.
For one of his General Letters to the boys, Frank asked his old friend William Moore to impart some of their exploits “down the shore” in the early 19
00s. In response, Moore wrote:
“The first day the Ocean looked like any Ocean and the thousands of nice looking people did not look any better than our party and surely did not have any more fun. The Razzle-Dazzle ride, imitating a ship at sea was taken in, also Day’s ice cream. The bathing is piles of fun, the girls don’t look very much … when they have their bathing suits on. The suits they rent are awful long and don’t fit very good and the straw hats are tough …
“Sunday—All went to church, walked, music, singing, talking by the hour on Woolworth’s fine piazza. Boardwalk in the evening.
“Tuesday—the ‘Tally Ho’—was ready, but it looked like rain; four horses, darky driver—darky 2 with a bugle. What music that darky made with that thing! The top … is made with a folding ladder … some beautiful photographs of the ladies in graceful attitudes making for the top seats … but what a gay party … for the 28 mile ride down the beach!”
By 1899, Frank Woolworth’s name appeared on the roster of the new, prestigious Deal Golf and Country Club, along with men like President McKinley and William Hearst. His Asbury Park five-and-ten was also flourishing by 1900.
All in all, the summers were joyous for the Woolworths and Frank’s select circle of friends. These outings played an important part in Woolworth’s life; one of the few times he allowed himself to relax. Frank also had another notable diversion—his motorcars.
For years, Frank’s gleaming horses and carriages were the pride of his personal transportation collection, but in October 1903, he discovered the delightful new invention called the automobile. He purchased his first motorcar in Paris; it was a forty-horsepower, 1903 King of Begium model Panhard. He even hired a dashing chauffeur named Julius Billard, an experienced driver who had once won the Grand Prix. Billard would become one of Woolworth’s closest confidants, traveling with the Merchant Prince whenever a fancy motorcar was needed to impress. Billard was also Frank’s unofficial “social planner,” and he routinely traveled ahead of his boss to Europe to make arrangements for special outings. Frank also acquired a lush private Pullman rail car, which he used for dashing across the country on business, or to transport special guests to his headquarters in New York City.
Remembering Woolworth’s Page 10