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November 13: Eugene Ferkauf and E.J. Korvette(s)

November 13, 2013
1101620706_400Department store innovator Eugene Ferkauf, who pioneered the “membership” discount store with E.J. Korvette in 1948, was born on the Lower East Side of Manhattan on this date in 1920. Named in a 1962 Time magazine story as one of the six greatest retailers in American history, Ferkauf challenged the “fair trade laws” and “manufacturers’ retail price” system of maintaining a minimum price by declaring his department store a “membership” club (they handed out membership cards in front of the store), and outcompeted the five-and-dime stores by abolishing both sales service and décor; Korvette had everything “from cosmetics to carburetors everywhere,” wrote Douglas Martin in the New York Times obituary of June 6, 2012, “Prices were 10 to 40 percent below those of conventional stores . . . David Halberstam described Mr. Ferkauf’s philosophy: If he could make a one-dollar profit selling a refrigerator, he could make a million-dollar profit selling a million of them.” Ferkauf sold Korvette, with 45 department stores and 60 supermarkets, for $20 million in 1966, and gave much of the proceeds to Jewish and cultural charities. “E.J. Korvette” combined the first initials of him and his friend Joe Zwillenberg with an intentionally corrupted spelling of the Corvette sportscar (correction: the “corvette” was the name of a naval warship). “Mr. Ferkauf’s unconventionality was legendary. In a button-down time, he wore neither suits nor ties, preferring sport shirts and sweatshirts. He had no secretary and no office. In the casual banter he relished, he often slipped in Yiddish expressions. If he had to meet a banker, he used the lobby of the Plaza Hotel.” —Douglas Martin