The Bon Marché, Inc. History

Address:

1601 3rd Avenue
Seattle, Washington 98181
U.S.A.

Telephone: (206) 344-2121
Fax: (206) 344-6251

Wholly Owned Subsidiary of Federated Stores, Inc.
Incorporated: 1890
Employees: 6,200
Sales: $892 million (1996)
SICs: 5311 Department Stores

Company Perspectives:

Service to the community, support of human and social needs, and seeing our efforts help others, are the cornerstones of The Bon Marché's community service mission. Together we build the future.

Company History:

A venerable department store operator for more than a century, The Bon Marché, Inc. operates 42 stores in the northwestern United States. Tailoring itself as a moderately priced retailer, Bon Marché held sway as the dominant department store operator in the Pacific Northwest during the late 1990s. The company's greatest concentration of stores was in Washington State, where the company was founded in 1890.

19th Century Origins

In 1875 Edward Ludwig Nordhoff left his native Germany on a journey that ended 15 years later in Seattle, Washington, where he founded The Bon Marché. Nordhoff left Germany at age 17 and made his first stop in Paris, where he gained his first experience in retail business. Nordhoff worked at the Louvre department store while he lived in Paris, displaying a keen interest in the way department stores were operated during his five-year stay there. He was most impressed with an innovative store on the Left Bank called the Maison à Boucicault au Bon Marché, reportedly the first store to arrange like goods by department and thus earn the distinction as the first department store. Nordhoff was impressed with the service at the Maison à Boucicault, and he vowed that if presented with the opportunity to own his own store he would operate it like the famed store on the Left Bank.

Next, Nordhoff was off to Buffalo, New York, where he joined his brother Rudolph in 1881. Nordhoff worked briefly at his brother's dry goods store in upstate New York, then renewed his westward travels before the end of the year, relocating to Chicago. In Chicago Nordhoff worked at a well-known department store called Willoughby and Robey, eventually earning a promotion to manager by 1887, the same year he became a U.S. citizen. One year after his promotion, Nordhoff married a Willoughby and Robey saleswoman named Josephine Patricia Brennan. The newlyweds had a child the following year. Just when it seemed Nordhoff was putting down roots in Chicago, however, he moved again. Health problems convinced Nordhoff that he needed to move to a milder climate, and he chose Seattle, arriving there in 1889 with his wife and their one-year-old baby girl.

One year after their arrival, Edward and Josephine Nordhoff invested their life savings of $1,200 to start their own department store, which they christened "The Bon Marché," in homage to Edward's inspiration in Paris. A brick veneer building, located north of Seattle's business district, was rented for $25 per month. Still in her teenage years, Josephine took an active role in running the store, helping stock shelves, keep books, clean, mop, and wait on customers. She was frequently seen measuring dry goods with her baby girl on her hip, as she attended to customers while Edward was away on trips to buy merchandise for the store. When Edward returned from his first buying trip to the East Coast in the early 1890s, he brought back a sack of pennies, introducing the coins into Seattle's economy. Until that time all change had been given to the nearest nickel, but with his sack of pennies, Edward was able to advertise merchandise for prices such as 19 cents, 29 cents, and 49 cents. Seattlites made the additional effort to walk the several blocks north from the city's business district to take advantage of the savings, and for those customers who took a streetcar to the Nordhoffs' store, their fare was refunded.

The Nordhoffs kept their store open 14 hours a day during the week and 15 hours on Saturdays, working day and night to ensure their fledgling store stayed in business. Josephine learned to speak the Chinook language to better serve the store's Native American customers, while Edward labored to make The Bon Marché a worthy replication of the esteemed department store he had frequented in Paris as a youth. The Nordhoffs' industriousness paid off. By 1896 their store was doing well enough to necessitate a move to larger quarters, this time to a location closer to Seattle's expanding business district. Although the store's business was growing each year, the 1890s would be the last decade the couple worked together. The health problems that had prompted Edward's move to Seattle finally took their ultimate toll. Edward died in 1899 of tuberculosis, leaving Josephine solely in charge of running The Bon Marché.

Josephine was not alone for long, however. Just before he had died, Edward had written to his brother Rudolph for help in running the store. Rudolph was en route when his brother died. When he arrived in Seattle, Rudolph helped his sister-in-law run the store, but by no means did Josephine fade into the background. She was as active as ever in running the store, spearheading its expansion once again in 1901. That year she married a merchant tailor named Frank McDermott, who, along with Rudolph and Josephine, helped run the store. Under the stewardship of this triumvirate, The Bon Marché flourished. The store underwent numerous expansions, as annual sales swelled from $340,000 at the beginning of the century to $8 million by the early 1920s. Death marked another transition in management in 1920, when Josephine died of cancer. Her death, mourned by thousands of Seattlites, left McDermott, Rudolph Nordhoff, and a long-time employee, Frank Radford, in charge of the company's fortunes.

Excavation for a new, four-story building began in 1927, as McDermott, Nordhoff, and Radford sought to end the nearly annual store expansions by constructing a store with what were then massive proportions. As work was under way to construct a Bon Marché that would occupy an entire city block, Nordhoff and McDermott arrived at an important conclusion. Their health was failing, so they decided to sell the company and selected Radford, who had joined the Bon Marché in 1898 as a package wrapper for $6 a week, to represent the company at its sale in New York. In 1928 the sale was completed, with New York-based Hahn Department Stores gaining control of the nearly 40-year-old, Seattle department store. The relationship between the Bon Marché and its parent company was an important one, an affiliation that gave the Bon Marché financial support that proved instrumental in the company's expansion outside of Seattle. At the time of the sale to Hahn, however, the years of geographic expansion were decades away; what occupied the minds of Bon Marché management at the time of the sale was the completion of its new store.

One year after the sale, the new store opened, a $5 million structure with 12 acres of retail space, the grand opening ceremonies of which were attended by 135,000 onlookers. The store, which was located in the heart of Seattle's business district, proved to be a remarkable success and stood as the signature property of Bon Marché, the company, for decades to follow. Radford, back from New York after representing Bon Marché's sale to Hahn, returned as president of the company to oversee the grand opening and remained as president of the company for the ensuing 16 years. During Radford's tenure, Hahn evolved into Allied Stores Corp., becoming the new parent company of the Bon Marché in 1933. For the remainder of the decade, as Bon Marché fought to withstand the effects of the Great Depression, the company drew its business exclusively from the sprawling store on Fourth Avenue. The next significant milestone in Bon Marché's history occurred following the conclusion of World War II.

Post-World War II Expansion

Radford moved up to chairman of the company in 1945, making room for the promotion of Rex Allison to the position of president. Under Allison's direction, the company began considering the establishment of branch stores in outlying areas of Seattle to take advantage of the migration of urbanites into the suburbs. Allison studied aerial photographs of the Seattle area to determine the best location for a store, convinced Radford and other executives that branching out represented a prudent move, and in 1949 announced plans of what was referred to as the "Northgate project." That same year the company took the more expeditious path to expansion by acquiring a department store in Everett (north of Seattle) and converting it into a Bon Marché, but the scope of the Northgate project overshadowed the significance of expanding through acquisition. The Northgate project was to be the first of several ventures that would combine the deep financial pockets of Allied Stores and the popularity of Bon Marché. Allied Stores agreed to finance the construction of a mall, and Bon Marché enjoyed the lucrative position of being the flagship retailer of the mall. This concerted approach to expansion would be used on several occasions, but the first was the mall slated to be built in Northgate, which would have a Bon Marché as its focal point.

The Northgate mall and its attendant Bon Marché opened in 1950 amid great fanfare and snaking lines of patrons. It was the first shopping center in the United States that was surrounded by a parking lot with a walking mall in the center, positioned in a location that Allison had determined was within a 12-minute drive of 275,000 people. As was true with the opening of the downtown store in 1929, the opening of the Northgate Bon Marché in 1950 proved to be a remarkable success. A week after the store opened, gross sales figures were double the projections of Bon Marché executives, a welcomed surprise that ushered in the era of Bon Marché's branch expansion.

Having registered considerable success with its first branch store, Bon Marché was quick to follow with the establishment of additional stores beyond the boundaries of Seattle's city limits. The 1950s and 1960s witnessed the transformation of a 60-year-old, one-store business into a chain of retail units spreading steadily throughout Washington State. During the 1950s the company expanded south, east, and north of Seattle, acquiring stores in Tacoma, Yakima, and Bellingham. Midway through the decade the downtown Seattle store was expanded, a $3-million project that made the flagship store the largest department store west of Chicago. In 1963 the company opened its seventh branch store, a Bon Marché in Spokane, that established the retailer's presence across the width of the state.

As in the 1950s, the 1960s saw Bon Marché couple geographic expansion with the renovation of existing units. The same year the company opened the doors of its Spokane store, it nearly doubled the original size of its Northgate store. The Northgate project, first envisioned in the late 1940s, provided a model for the company's expansion during the 1960s. Developing malls around Bon Marché units represented the preferred method of expansion, and it was a method made viable by the financial support offered by Allied Stores. Such was the case with the development of the Tacoma Mall during the mid-1960s. Allied Stores developed the regional shopping center--situated to serve southwest Washington--and Bon Marché established its retail anchor, opening the new Bon Marché unit one year before the Tacoma Mall was completed in 1965. Over the course of the next three years, three existing Allied stores were converted into Bon Marché stores, fleshing out the company's presence in Washington with stores in Longview and Walla Walla and extending its presence beyond Washington's borders for the first time with a store in Eugene, Oregon. Before the decade ended two more malls featuring Bon Marché stores were developed, Southcenter Mall and Columbia Center, giving Bon Marché a total of 12 stores as it entered the 1970s.

Recessive economic conditions during the early 1970s put a freeze on expansion for much of the decade, but once the company resumed expansion in the late 1970s, it did so in earnest. Two new stores were opened in 1977 and the following year eight existing Allied stores in Idaho, Montana, and Utah were added to Bon Marché's fold. By the end of the 1970s three decades of expansion had produced a 27-store chain operating in a five-state region comprising Washington, Oregon, Idaho, Montana, and Utah. Annual sales eclipsed $300 million.

1980s and 1990s

The three decades of steady expansion touched off by the completion of the Northgate Mall in 1950 was followed by a decade of more animated growth, growth orchestrated by an individual who had witnessed all of the company's postwar expansion. Wilbur J. Fix joined Bon Marché when the Northgate Bon Marché made its debut, and he rose through the company's ranks for the next 30 years, becoming president in 1978 and chief executive officer in 1980. Under Fix's stewardship, Bon Marché recorded prodigious growth, more than doubling its revenues during the 1980s and nearly tripling yearly profits. Three smaller stores were closed during the decade, but their departure was more than compensated for by the addition of 18 new stores. As expansion was under way, new ownership took control when Allied Stores Corp. and Campeau Corp., led by Canadian developer Robert Campeau, merged in 1986. Fix was named chairman in 1987. The following year Campeau completed additional retail acquisitions that made him one of the largest retail operators in the United States and Bon Marché one of nine retail divisions within his empire. In the hierarchy of Campeau's businesses, Bon Marché was positioned as a subsidiary of Federated Stores, Inc., a component of the massive Campeau Corp.

Bon Marché celebrated its centennial as a thriving enterprise, bolstered significantly by the expansion of the 1980s and holding sway as the jewel of the Campeau empire as the 1990s began. In 1990 Bon Marché comprised 42 stores, 23 of which were located in Washington, that generated roughly $700 million in sales a year. Its parent company, however, was experiencing profound difficulties. In 1990 Federated filed for bankruptcy, lingering in Chapter 11 for two years before reorganizing and regaining its feet. During Federated's bankruptcy Bon Marché was heralded as a robust money earner and glorified as a model for other businesses higher up Campeau's organizational ladder to emulate. The company registered its greatest progress with its "Home Store" concept: retail units that sold home furnishings, accessories, and electronics. By the time Federated emerged from bankruptcy, there were five Home Stores within Bon Marché's fold and plans for the establishment of additional units.

A series of management changes at Bon Marché occurred during the mid-1990s, beginning with the retirement of Fix in 1993 after 43 years as a Bon Marché employee. Robert J. DiNicola succeeded Fix as chairman and chief executive officer, but his tenure was brief. DiNicola left Bon Marché in April 1994 to become chairman and chief executive officer of Zale Corp., a large jewelry retailer. To fill the posts vacated by DiNicola's sudden departure, Thomas P. Harville, a company employee since 1977, was selected. Three years later Harville was gone as well, opting to retire and make room for Ira Pickell, named chairman and chief executive officer in 1997. The spate of senior executive departures during the mid-1990s represented an anomaly for Bon Marché, which for decades had been known as a company that underwent little managerial change. When Fix assumed control of Bon Marché, he was only the fifth person to control the company since Nordhoff and McDermott had decided to sell the company in 1927. After Fix retired in 1993 the company fell under the leadership of three different senior executives during a four-year span.

Despite the managerial flux of the mid-1990s, Bon Marché entered the late 1990s as a formidable regional player. With 42 stores in operation in 1997, the company's 107-year legacy as a department store operator pointed to a future as profitable as its past, although there was speculation that Federated might convert Bon Marché units into Macy's stores, another Federated subsidiary. Rumors about the conversion to Macy's had been circulating since 1995, but were flatly denied by both Federated and Bon Marché spokespeople. Whether or not the Bon Marché name would endure for a second century was a question to be answered by the events of the future.

The Bon Marché, Inc. History

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