America in 1867 is still licking its wounds. Lincoln was assassinated two years earlier. Demobilised soldiers cross paths with freshly freed slaves in the streets of Washington. A twenty-year-old kid turns up, son of Jewish immigrants from Bavaria. He grew up in Baltimore peddling goods door to door. His name is Andrew Saks. His idea: put prices on things.
At the time, nobody does that. Merchants haggle over everything, returns are impossible, and customers never know whether they’ve been ripped off. Andrew Saks sticks a tag on every item. One price. The same for everyone. And if the customer isn’t happy, he can bring the goods back. First a shop at 517 F Street in Washington. Then branches in Richmond and Indianapolis. In 1902, a seven-storey department store on Herald Square, in the heart of Manhattan, wedged between Macy’s and Gimbels.
Andrew Saks dies on 8 April 1912, aged sixty-five. He leaves a thriving chain of stores, two sons to run it, and a daughter, Leila, who lives in Manhattan with her husband Edgar Meyer, a Cornell-trained engineer and vice-president of the Braden Copper Company.
Five days after her father’s death, Leila boards the Titanic.1
She was in Europe with her husband when she heard the news. To get back for the funeral as fast as possible, the couple booked first-class tickets on the biggest liner in the world, the one they said was unsinkable. Ticket number PC 17604, £82. On the night of 14 to 15 April, the iceberg. Chaos. The lifeboats. Edgar Meyer helps the women aboard, refuses to leave before them, and persuades his wife to go without him by reminding her that they have a one-year-old daughter waiting for them in New York. He is one of the 1,517 people who died in the sinking. On 17 April, from the Carpathia, Leila sends a telegram to the family:2
“Leila safe and well cared for. Edgar missing.”
If I’m telling you this story, it’s because it says something about the America of those days. An America where a Baltimore pedlar can found a dynasty. Where his daughter can survive the greatest shipwreck in history and end her days in an apartment at 970 Park Avenue with a jewellery collection the women’s magazines swoon over.3 An America where anything is possible. Including the worst.
Leila survives. So does the dynasty. Her brother Horace is about to turn their father’s shop into a temple of luxury.
After the Great War, Europe is in ruins. The United States has been left untouched. Better still: it has sold weapons, wheat and oil to every side. Between 1922 and 1929, American GDP grows by 40%.4
This is the America of the Roaring Twenties. Henry Ford has revolutionised industry with the assembly line. A Model T costs $260 in 1924, three months of a factory worker’s wages. Expensive, but within reach thanks to another American invention: consumer credit. By 1929, there is one car for every five Americans.5 Hollywood churns out 700 films a year. In Chicago’s speakeasies, bootleg liquor flows while the jazz plays and the flappers dance the Charleston. Prohibition has created a gigantic black market run by the Mob. America is dancing on a volcano.
Calvin Coolidge, President of the United States, sums up the era in one sentence in 19256:
“The chief business of the American people is business.”
In this America where commerce is king, Horace Saks will make his father’s dream come true.
Fifth Avenue in 1920 is not a shopping street. It is the district of palaces. The Vanderbilts, heirs to the railroad magnate, own several mansions between 51st and 58th Streets. One of them takes up an entire block: 137 rooms, 30 servants, a ballroom for 1,200 guests.7 The Astors throw legendary balls where only the “Four Hundred” most distinguished families are invited. Four hundred, because that is how many people Caroline Astor’s ballroom could hold. The Carnegies, the Fricks, the Rockefellers all have their homes on the avenue.
The 1920s change everything. Income tax, introduced in 1913, makes these palaces too expensive to run. The new generation prefers Park Avenue apartments. One by one, the mansions are sold, demolished and replaced by office buildings or shops. In 1917, Cartier acquires Morton Plant’s mansion on the corner of 52nd Street in exchange for a pearl necklace worth $1M.8 Tiffany, Lord & Taylor and B. Altman move in. Fifth Avenue is transformed, block by block.
Horace Saks wants to build his store there. Not on Herald Square, where his father had opened, wedged between Macy’s and Gimbels in a price war nobody could win. No. He wants to aim higher. Literally. In 1920, Saks & Company leases a plot between 49th and 50th Streets, fifteen blocks north of the traditional shopping district, in a neighbourhood that is still largely residential. To pay for construction, Horace teams up with his cousin Bernard Gimbel: in April 1923, Gimbel Brothers buys Saks & Company for $8M, takes over the Herald Square lease and finances the new store in exchange for a joint venture.9
The architects Starrett & Van Vleck design a ten-storey neo-Renaissance building clad in Indiana limestone. Understated. The Fifth Avenue Association awards it its gold medal for the best new building of the year. On 15 September 1924, Saks Fifth Avenue opens its doors. Crowds press against the huge windows. Paris gowns, jewellery, furs. The store offers “charge accounts”, credit accounts for regular customers. By the end of the year, 50,000 New Yorkers have one.
Among the items in the window, a pigskin trunk at $3,000. More than a worker’s annual wage. The message is clear.
Except that Horace Saks won’t enjoy his triumph for long. Two years after the opening, he dies of blood poisoning. Aged 42. He leaves behind a store in his own image: understated, methodical, impeccable.
His cousin Adam Gimbel takes over. The polar opposite. Flamboyant, a socialite, a showman. Under his leadership, the store opens branches in Palm Beach and Atlantic City, then Chicago, Beverly Hills and Detroit.10 He marries Sophie, a fashion designer whose dresses are sold exclusively in the Saks Salon Moderne, alongside Chanel, Vionnet and Schiaparelli. When he retires in 1969, after 43 years at the helm, Saks Fifth Avenue has 28 stores in 16 states. It has survived the Great Depression, the Second World War, the flight to the suburbs and the arrival of the discounters. An American monument.
What follows is a litany of takeovers. In 1973, a struggling Gimbel Brothers is swallowed by BATUS, the American arm of British American Tobacco. Yes, the cigarette maker. In 1990, BATUS sells to Investcorp, a Bahraini investment firm, for $1.6bn. Eight years later, it is Proffitt’s, an Alabama chain nobody had ever heard of, that buys the lot. And in 2013, Saks falls into the lap of the Hudson’s Bay Company. A Canadian group. $2.9bn. Founded in 1670 by royal charter to trade furs.11 355 years of history. The man running HBC is called Richard Baker.