Gimbels — Macy’s Eternal Rival, Closed When Nobody Could Say Why

Gimbels was, for the better part of a century, the most famous second-best department store in America, and in 1987 its owner closed it. The Gimbel family had been merchants since Adam Gimbel opened a general store in Vincennes, Indiana in 1842, but the chain proper dates from 1887, when the family established its first true department store in Milwaukee. From there it spread to Philadelphia in 1894 and, fatefully, to New York’s Herald Square in 1910 — a block from Macy’s, the rival that would define it. By 1930 Gimbel Brothers ran 20 stores and booked $123 million in sales, which made it, by that measure, the largest department-store corporation in the world.

What it is remembered for, though, is the rivalry. “Does Macy’s tell Gimbels?” entered the language as a way of declining to share a secret, and the two stores, a block apart and forever undercutting each other’s prices, became a shorthand for competition itself — immortalized in Miracle on 34th Street, where the rival Santas declare a truce. The irony of the case file is that the slogan outlived the store by decades. By the 1980s, shoppers and analysts alike struggled to articulate what Gimbels was actually for: it was not the cheapest, not the most fashionable, not the most upscale. It was the place that had once been famous for being famous.

The death itself was mundane. In 1973 the Gimbel family sold the company to Brown & Williamson, the American arm of British American Tobacco, which folded it into a retail holding group called BATUS. The tobacco conglomerate ran several chains — Marshall Field’s, Saks Fifth Avenue, Kohl’s — and by 1986 it had concluded that Gimbels was the marginal one: a middling performer with little path to higher profit. So BATUS did the unsentimental thing. It cherry-picked the best store sites for buyers, handed the prized Milwaukee flagship to its own Marshall Field’s division, and in 1987 simply shut the remaining 35 stores. The most famous rivalry in American retail ended not with a fight but with a portfolio decision.