Evans, Inc. History

Address:

36 S. State Street
Chicago, Illinois 60603
U.S.A.

Telephone: (312) 855-2000
Fax: (312) 855-3150

Website: www.evansfurs.com

Public Company
Incorporated: 1929
Employees: 900
Sales: $92.3 million (1998)
Stock Exchanges: NASDAQ
Ticker Symbol: EVAN
NAIC: 44812 Women's Clothing Stores; 44815 Clothing Accessories Stores

Company History:

Evans, Inc. is one of the preeminent retailers of luxurious fur coats and accessories for women in the United States. The firm's Black Diamond mink, one of its longstanding and most famous trademark furs, is a dark, plush, soft ranch mink that has been sold to privileged women across the country. Although fur sales account for nearly 80 percent of the company's revenues, Evans also sells a wide variety of sportswear, formal and casual dresses, and business suits for women through its retail stores and leased retail locations. The company had experienced continuous growth from its inception during the 1920s, but during the 1960s and 1970s a powerful anti-fur movement exerted a substantial effect not only on its sales figures but also on its strategic plans for growth and development. Compounded by the problem of warm winters, especially in 1997 and 1998, the company plans to sell all of its nine stores in the Chicago metropolitan area, but retain its fur-only stores located in Texas, and Washington, D.C., in addition to the 54 leased departments in retail stores across the country.

Early History

The founder and driving force behind the success of Evans, Inc. was Abraham L. Meltzer, born in 1903 to Jewish immigrants from Europe. Meltzer was raised in the midst of Chicago's booming retail industry, a time when famous families such as Field, Carson, Pirie, Scott, and a host of others were making their fortunes selling dry goods to the burgeoning populace of the city. Meltzer grew up with an acquaintance of the city, its environs, and the people who made it work. Having lived a relatively quite and peaceful existence in the city most of his childhood, the young man entered the retail trade during the 1920s and learned what it was like to provide service to those individuals who made large amounts of money in Chicago. As the stock market rose, fortunes were made almost overnight, and those people with more than enough money bought expensive clothing. By the end of the decade, Meltzer had learned enough in the retail trade, and had garnered enough experience as well as capital, to establish his own retail store.

Meltzer's choice of clothing was based on his experience with wealthier customers that he had dealt with throughout the 1920s. For Meltzer, there was a large niche market in Chicago for the sale of fur coats, and the ambitious young entrepreneur believed that he could turn a good profit in selling minks and other luxurious furs to the social elite of Chicago. There was another tangible element in Meltzer's decision to open his own fur store, namely, the harshness of the Midwestern winter. During the decade of the 1920s, and from his memory as a boy growing up in Chicago, Meltzer was well-acquainted with the biting cold temperatures and the bitter wind that swept down from Canada to freeze Chicago nearly every year. Meltzer also knew precisely how warm and practical fur coats could be in the midst of a Chicago snowstorm, and how desirable they were to well-heeled society women from Chicago's Gold Coast and the townhouses along South Michigan Avenue. Incorporating his business in 1929, Meltzer opened a small store at 162 North State Street, the heart of Chicago's retailing sector. The loft where he exhibited his furs during the first years of business was widely regarded to be rather cold during the winter months. Meltzer named his new fur business Evans Furs, Inc.

Within a short time after opening his doors for business, the New York Stock Exchange crashed and the entire country was thrown into the economic difficulties of what has become known as the Great Depression. Through 1930 and 1931, the economy of the nation continued to spiral downward with no solution in sight. Businesses went bankrupt, wealthy individuals and families lost their fortunes, and not a few men overwhelmed with debt took their own lives. When Franklin Delano Roosevelt was elected president in 1932, one of his first decisions was to implement a Bank Holiday, so that all the banks throughout the country could evaluate their prospects of remaining open to serve the public. When the banks finally returned to business, many of them were unable to reopen. Yet this was the first step in rebuilding a banking network with a financial basis that could not be undermined in the future.

Meltzer's fur store, although affected by the difficulties of the Great Depression, nonetheless was able not only to survive but to actually prosper during the 1930s. Forced to lay off some of his workforce, Meltzer devoted more of his own time and energy to supervising his business. To some extent, the fur retail business was recession-proof since those wealthy individuals who had not lost their money in the stock market were able to continue a lifestyle much the same as before the Depression. Furs were still purchased by socialite women for the winter season which involved symphony concerts, opera performances, and charitable fund raising events to help the less fortunate. In 1936 Meltzer decided to move the location of his company to the North American Building at 36 South State Street. The company's headquarters have remained at this address down to the present time.

Within Chicago retailing circles, Meltzer was widely regarded as a marketing genius. He was the first retailer in the entire metropolitan area to use advertising on the radio to sell his furs. Even more innovative was his decision to significantly alter the way fur coats were sold. Before Meltzer, the fur coat retail trade was highly individualized, with fur coats normally made-to-order on a person-to-person basis. A woman was measured for the size of coat that would fit her, she then chose the style and type of fur, the length and lining, and most often the retailer would order the fur and hand make it especially for the customer. Meltzer ushered in a new era in the fur retail trade when he began volume selling. In Meltzer's store, a woman could go in and look at a number of different furs and styles of coats that were already hanging on racks and ready to be taken home (perhaps with a few alterations). Not only did this reduce the price of purchasing a fur coat, but it made it a bit more accessible to upper middle class women.

Evans, Inc. continued its uninterrupted success throughout the 1940s and 1950s. Although America's entry into World War II, and the global conflagration which went on until 1945, hampered the company's ability to expand its operations and sell more fur coats, Meltzer's uncanny ability to draw enough people into his store to buy an extremely high quality, expensive product was nothing less than impressive. In its store on State Street, the company had created an elegant and sophisticated atmosphere where women felt privileged to shop. This atmosphere of rarified luxury, where women were expected to dress properly and even have their hair done before coming in to shop, was what set the standard for fur stores across the country in the late 1940s and throughout the 1950s. During this time, Meltzer began to supply furs and handle fur sales for large department stores on the East Coast, an operation that eventually spread to retailers across the United States. By the end of the 1950s, Evans, Inc. was widely regarded as one of the most elegant and successful of all the furriers in the country. Sales were continuing to increase, and there seemed no end to the profitability of Evans. In 1959 Abraham Meltzer, and his brother who worked for him, were given the most prestigious and coveted award within the fur industry when they were named "Men of the Year."

Change and Transition: 1960s--80s

When Abraham Meltzer retired in 1964, he gave the reins of the company to his son David Meltzer. Even though David was educated in the fur trade, he was not prepared for the developments during the 1960s and 1970s that forever changed the way many people viewed those privileged enough to buy and wear a fur coat. In the mid-1960s, with student unrest on many campuses within the United States, animal rights groups, which had previously been considered fringe organizations whose membership was a radical few, began to attract students to their cause and garner much more attention than previously given them. Not-for-profit and advocacy organizations such as The Fund for Animals, International Fund for Animal Welfare, and the National Wildlife Federation skyrocketed to the forefront of what became known as the animal rights movement.

An offshoot of the animals rights movement was the anti-fur activism that focused on convincing the American and European public that wearing any kind of fur was cruel and malicious to the animal it was taken from. The more radical members of the anti-fur movement engaged in such activities as shooting out the store windows of furriers, pouring glue onto the fur coats of their owners, and throwing paint on women who walked by wearing a fur coat. Even though the entire fur industry stopped using furs designated as threatened by the Endangered Species Act that was passed by Congress in 1973, the damage to the fur industry had already been done. Compounded by a dramatic change in fashion in which younger women regarded the wearing of furs as fit only for grandmothers and matronly types, sales for the entire industry plummeted from $335 million in 1967 to just over $250 million by the mid-1970s.

Evans was not immune from these social movements and trends within the industry, and sales for the company began to drop slowly throughout the late 1960s and 1970s. In the early 1980s, however, David Meltzer became convinced that the only way to increase his company's slumping sales figures was to expand its operations. As a result, the company implemented a major expansion strategy that not only included establishing new Evans stores in the greater Chicago metropolitan area, and other select cities across the nation, but also included the sale of Evans furs in major department stores as well. Soon Evans, Inc. had fur salons in Washington, D.C., New Orleans, Las Vegas, Dallas, and Oklahoma City, and also sold furs in departments stores such as Macy's and Associated Dry Goods affiliates. As David Meltzer looked for innovative ways to increase sales and bring more women into the stores, he decided upon two ideas. First, Evans would expand its product line to include a wider range of women's apparel, and second, the company would also create a less formal, less intimidating atmosphere for purchasing fur coats.

The 1990s and Beyond

Unfortunately, Meltzer's ideas did not work. The expansion strategy cost more money than expected, and sales remained flat. By the late 1980s, Evans, Inc. found itself in serious financial difficulties with continuing criticism from anti-fur activists, prices slashed within the entire industry due to oversupply, and an economy that looked as if it were deepening into a recession. Other furriers were experiencing the same kind of problems: Antonvich International, Inc. filed for bankruptcy and was liquidated; Fur Vault, Inc. was sold to a Korean firm; and Alper-Richman Furs, Ltd. also was forced into bankruptcy and liquidated soon thereafter. As chairman of the board David Meltzer had appointed his son, Robert, to the position of president and CEO in 1988, but removed him as the company's financial crisis deepened. But even closing stores and pulling out of some of the larger department store chains was not enough. Finally, for the first time in its history, the Meltzer family turned to an outside source for direction.

The company's new president and CEO, Leonard Levy, had previously been president at The Fair, located in Beaumont, Texas, which he helped bring out of bankruptcy in two years. But within six months, Levy was let go, supposedly over a personality clash and David Meltzer's consideration of purchasing the leases of 23 fur salons in Lord & Taylor stores across the country, which Levy regarded as imprudent under the company's current financial circumstances. Consequently, David Meltzer again assumed control and direction of the company and, even though Evans, Inc. remained solvent, the firm still needed an extensive overhaul of its operations. Throughout the 1990s, Meltzer cut costs by eliminating staff, closing stores, opening others, and renegotiating leases. Because of these measures, confidence in Evans, Inc. remained high, and creditors either extended the company's line of credit payments, or continued to increase its credit line.

By the late 1990s, Robert Meltzer, who had been removed by his father from the position of president and CEO in 1991, once again assumed those titles. In spite of the fact that fur appeared to be gaining in popularity, Evans was still struggling financially. From 1996 to 1999, the company lost money, and its stock price had fallen to just above one dollar. In the summer of 1999, the management team at Evans decided to sell the remaining company stores in the Chicago area, and concentrate on the leased fur department store operation, located in such major stores as Bloomingdale's, Rich's, Lazarus, Dayton Hudson, Marshall Field's, and others. The company retained its fur-only stores, located in prime retail spots in San Antonio and Austin, Texas, and three within the Washington, D.C. metropolitan area.

As of September 1999, Evans, Inc. was still in the midst of a financial crisis, and a turnaround of the company was required. Whether the management team at Evans would overcome the flat sales endemic to the fur industry, and the ongoing effects of anti-fur activism, was open to question.

Evans, Inc. History

Company History:

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