The History of E.J. Korvette Department Stores.

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THE MYTH

"E.J. Korvette" was not a person but an acronym for "Eight Jewish Korean Veterans," who started the chain stores after being discharged and returning home from the Korean War.

E.J. Korvette, or simply Korvettes (initially a leather goods retailer), wasn't just another department store. It was a retail revolution. Founded in 1948 by World War II veteran Eugene Ferkauf and his friend, Joe Zwillenberg, Korvettes burst onto the New York City scene as one of the first discount department stores, forever changing the landscape of American shopping.

Korvettes dared to challenge the status quo, defying the anti-discounting suggested retail price provisions and their mandated high prices. They offered a treasure trove of merchandise under one roof, from groceries and appliances to clothing and furniture, all at deeply discounted prices. This innovative approach resonated with budget-conscious shoppers, and Korvettes quickly carved out a niche for itself.

The Korvette empire wasn't limited to New York. The Chicago area, for instance, boasted five stores, each a bustling hub of bargains and customer excitement. Korvettes became more than just a store; it was a destination where families could snag incredible deals and experience the thrill of the discount hunt.

In short, E.J. Korvette wasn't just a retailer but a pioneer. It redefined the idea of the department store, making quality goods accessible to everyone and paving the way for future discount giants like Walmart and Costco. Its legacy lives on in the memories of those who flocked to its aisles, forever marking its place in American retail history.

EUGENE FERKAUF EXPLAINS THE NOMENCLATURE

"I had a name picked out for the store, E.J. Korvette. "E" is for Eugene, my first name, and "J" stands for Joe Swillenberg, my business associate and pal."

The name "Korvette" was initially meant to be spelled with a "C" after the Royal Canadian Navy's U-boat hunter, simply because I thought the name was euphonious (pleasant sounding). When it came time to register the business name, we found using a Royal Canadian Naval class identity was illegal, so we had to change the spelling to "K."

Same structure as the Morton Grove, Illinois, E.J. Korvette store.

The history of E.J. Korvette, also known as Korvettes, is that it was a chain of discount department stores founded in 1948 in New York City. It was one of the first department stores to challenge anti-discounting statutes' suggested retail price provisions. Founded by World War II veteran Eugene Ferkauf and his friend, Joe Zwillenberg, E.J. Korvette did much to define the idea of a discount department store. The Chicago area had five stores. 

Korvette's displaced earlier '5 & Dime' retailers and preceded later discount stores, like Walmart, and warehouse clubs, such as Costco and Walmart.

ILLINOIS STORE HISTORY

In 1963, Korvette opened four stores in Chicagoland. The first was located in Oak Lawn at 87th and Cicero.

The second Korvette was built in Elmhurst at Route 83 (Elmhurst Road), and St. Charles Road opened on April 29, 1963. 

Two more stores would open before the end of the year in Matteson, Illinois, at Crawford and 111th Street. In Morton Grove, at the intersection of Waukegan Road and Dempster Street, These stores were built as "Korvette Cities," with a two-story main store with a furniture store/carpet center, an adjoining Korvette supermarket, and an auto center at the edge of the parking lot.

The fifth and last Chicago area Korvette opened in November 1965, over two years later than the other Chicagoland locations, located at the corner of Harlem Avenue and Cermak Road in North Riverside. The initially intended supermarket for this location opened as a Jewel Food Store. Jewel, located across the street, closed the Cermak Plaza store. Earlier in the year, Korvette sold off its grocery business in Illinois, with Dominick's purchasing the other three locations.

The company failed to properly manage its business success, which led to the decline and its 1980 bankruptcy and closure.

A sight no German U-boat Captain (Kapitänleutnant) would ever want to see through his periscope, an approaching Allied Flower-class Corvette.

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In 1953, when GM executives were looking to name the new Chevrolet sports car, assistant director for the Public Relations department, Myron Scott, suggested the name Corvette.

 

I explore, after much research, the possible reasons why the Canadian Navy rejected E.J. Korvette Department Stores from using the name "Corvette" in 1948 yet allowed General Motors Chevrolet to use Corvette as a car model name in 1953. There are several factors that likely contributed to the Canadian Navy's decision to reject E.J. Korvette Department Stores from using the name "Corvette" in 1948, while General Motors Chevrolet was allowed to use it for the car model in 1953.

Different contexts and associations:

Navy: In 1948, the corvette was still a powerful and respected vessel in the Royal Canadian Navy, having played a critical role in the Battle of the Atlantic during World War II. The association with a department store could potentially detract from this prestige and seriousness.

Car: By 1953, the corvette had faded from public consciousness as a naval ship. The term was more open to reinterpretation, and Chevrolet likely emphasized the connotations of speed, agility, and excitement, aligning with the car's sporty design and performance.

Legal differences:

Trademark law: Trademark law was less developed in 1948 than it is today. Chevrolet likely registered the "Corvette" trademark for specific categories related to vehicles, while Korvette may not have filed such protection for department stores.

Public perception: In 1953, the public may have been more accepting of a car using the "Corvette" name compared to a department store, considering the diminishing association with the naval vessel.

Political and cultural factors:

Nationalism: Some speculate that the Canadian government might have been more receptive to a foreign automobile manufacturer like Chevrolet using the name compared to a domestic department store company like Korvette.

Public opinion: It's possible that public opinion played a role, with a sports car generating more enthusiasm for the name than a department store.

General Motors Chevrolet began selling vehicles in Canada before the iconic Corvette was even introduced, as early as 1915.

• 1907: Samuel McLaughlin establishes the "McLaughlin Motor Car Company" in Ontario, Canada.
• 1912: R.S. McLaughlin invests in the Chevrolet Motor Company in the U.S.
• 1915: McLaughlin acquires the Chevrolet Car Company of Canada and starts building Chevrolets in Oshawa, Ontario, using Chevrolet engines and McLaughlin bodies. These vehicles were marketed as "McLaughlin-Chevrolet" until 1923.
• 1918: McLaughlin merges his company with Chevrolet Canada under "General Motors of Canada Limited" and becomes President.
• 1923: The "McLaughlin-Chevrolet" name is discontinued, and the vehicles are simply sold as "Chevrolets" in Canada.

Therefore, General Motors Chevrolet had been selling vehicles in Canada for 30 years before the introduction of the Corvette in the U.S. in 1953. It's important to remember that the Canadian car market had a unique trajectory, and iconic American models like the Corvette weren't necessarily the first to be introduced into Canada.

EUGENE FERKAUF

E.J. Korvette's founder, Eugene Ferkauf, began his discounting career in a 400-square-foot loft in mid-Manhattan, New York City. Inventory consisted of well-known luggage brands, household appliances, and some jewelry. Discounts were one-third of regular prices, and sales were more than $2,500 per square foot. Ferkauf retired in 1968.

Eugene Ferkauf, circa 1960.

The company used several retailing innovations to propel its rapid growth. It used discounting, even though most discounting was known to be outlawed at the time. Korvette instituted a membership program, a technique from consumers' cooperatives that had never been applied to a department store. It also expanded into suburban locations when most department stores were in central business districts.

Most remembered was their Audio Division, which had high-quality, good, brand-name stereo equipment. The Records & Sheet Music Department would get nearly any album, 45(rpm), new or old, and sheet music for any size band or orchestra, at the store in two days. At least the two-day delivery worked perfectly at the store I frequented at Dempster Street and Waukegan Road in Morton Grove, Illinois.

In 1964, record sales reached $20,000,000. David Rothfeld, merchandise manager for records, books, and audio equipment, described it "as hard-hitting as the rest of the young driving force behind Korvette, right up to the company's new 37-year-old President, Jack Schwadron.

Eugene Ferkauf died on June 5, 2012, in his New York Manhattan home.

Eugene Ferkauf Obituary

New York (AP) — Before the advent of the big box discount store, there was Eugene Ferkauf.

The founder of the E.J. Korvette chain died at his Manhattan home Tuesday, June 5, 2012, at the age of 91, said Yeshiva University, where he was a longtime former trustee and benefactor.

"He was a brilliant entrepreneur, innovator and pioneer of the discounting concept," said Burt Flickinger, III, managing director of the retail consultancy Strategic Resource Group. People from around the globe, including such industry giants as the founders of Kmart and Wal-Mart, studied his stores and merchandising model, Flickinger said.

Ferkauf founded Korvette in 1948, first selling luggage from a loft on 46th Street before expanding to 45 outlets throughout the New York metropolitan area, including on Fifth Avenue just blocks from the upscale Saks Fifth Avenue department store.

He offered deep discounts of up to 40 percent on merchandise ranging from appliances to bed sheets.

Ferkauf was a pioneer in "selling something for every room and apartment and every home," said Flickinger. He also was "one of the great pioneers and innovators in the record and music business," he said.

At his funeral Thursday, one speaker recalled buying his first Beatles album at a Korvette store.

The Manhattan-born Ferkauf sold his share in the store in 1966 for more than $20 million. Korvette went out of business in around 1980. 

 

Time magazine featured Ferkauf on its cover of the July 6, 1962 issue with the title: "Consumer Spending - Discounting Gets Respectable."

In the article, Harvard Business School retailing guru Malcolm McNair described Ferkauf as one of the six greatest merchants in U.S. history, a group that included Frank Woolworth and JCPenney.

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Largest American Retailers ranked in the top ten merchants beginning in 1929. Chicago businesses include; Sears-Roebuck, Montgomery Ward, and Marshall Field. (American Business History Center)

 

"By succeeding at it in the sluggish 1960s, Eugene Ferkauf has seized the lead in a retailing revolution that is shaking up every U.S. merchant from Main Street to Manhattan's Fifth Avenue," the story read.

E.J. Korvette had one of the most explosive growths in any sector of chain retail during the 1960s, Flickinger said. And all the major regional discount chain stores sought to emulate it.

"Sam Walton of Wal-Mart came to study his Korvette stores," said Flickinger. "Harry Cunningham, the founder of Kmart stores in 1962, studied Korvette stores." Other large chains that analyzed the Korvette model extensively included Zayre, Caldor and Ames.

But Ferkauf, whose name means "sell" in Yiddish, had an adverse influence on some traditional department stores, which struggled "because of what Korvette initiated and inspired through its discounts," he said.

The store's name intrigued many. Many believed it stood for [Eight or eleven] Jewish Korean War veterans. Still, Ferkauf had a more straightforward explanation: E stood for Eugene, J for his Brooklyn friend Joe Zwillenberg, and Korvette for the World War II allied sub-chasing ship Corvette class.

Ferkauf and his wife, Estelle, were generous philanthropists who donated to Yeshiva University (a private Orthodox Jewish university with four campuses in New York City) and other causes. The Ferkauf Graduate School of Psychology at Yeshiva is named after him.

His burial was at Cedar Park Cemetery in Paramus, New Jersey.

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Compiled by Dr. Neil Gale, Ph.D.