The May Department Stores Company
List of Deals
- 1929 issue and underwriting of additional common stock
- 1945 sale of 150,000 shares of $3.75 cumulative preferred stock (without par value) and sale of 80,000 shares of common stock (par value $5 per share)
David May, the founder of the May Department Stores, opened his first store in 1877, in Leadville, Colorado. The store, called May, Holcomb & Dean, supplied miners in the town with red woolen underwear and copper-riveted overalls. The store was an instant success, but a real estate dispute dissolved his partnership with the store's two other founders. May put up a building on newly purchased ground and called his second store the Great Western Auction House & Clothing Store. He was joined soon thereafter by a partner, Moses Shoenberg. After testing the market with a huge stock of expensive dresses bought from an overstocked Chicago store, May and Shoenberg were quickly able to expand their merchandise to include women's apparel. May bought out Shoenberg's interest in 1885 and added branch stores in Aspen, Colorado, and Glenwood Springs, Colorado. By that time, the company's print advertising that touted bargain prices lured an ever-escalating, middle-class clientele, while frequent sales kept the merchandise moving. Fast stock turnover kept the customers in the height of fashion.
May's company continued to expand through the end of the nineteenth and the beginning of the twentieth centuries. In 1892 he purchased the Famous Department Store in St. Louis, Missouri, and in 1898 he bought the Hull & Dutton store in Cleveland, Ohio. The company was incorporated as the May Department Stores Company in 1910 in New York. The following year, the company bought William Barr Dry Goods Company in St. Louis and merged that store with its other St. Louis store, forming the Famous-Barr Company. Sales for 1911 reached $14.8 million, with profits of $1.5 million. In 1923 May bought a Los Angeles department store, A. Hamburger & Sons, and renamed it the May Company. This new store helped the May Department Stores Company surpass $100 million in sales for 1926. That year, the company acquired Bernheimer-Leader Stores, Inc., in Baltimore, Maryland, which was also renamed the May Company. This was the company's last acquisition for some time. May's top priorities at that time were consolidation, improvement in performance, and store remodeling. Systematic modernization to update delivery systems and to provide customer parking began in 1928 and was completed in 1932.
The company remained successful during the Depression years. The stores' inventory was key to this success. Buyers had always maintained large stocks of merchandise, regardless of the external economic climate. This policy now proved profitable, for higher purchase costs were not a problem; the company added the old and the new prices of an item, averaged the two, and held one of its famous sales. Large inventories thus became an asset, leaving the stores unaffected by the Depression era foundering of distressed suppliers. Another advantage during that time was the wide geographical spread of May's subsidiaries. Each store had its own buying department, allowing it to cater to its individual needs. Additional centralized buying facilities, however, allowed buyers to take advantage of mass-purchasing practices to keep their costs down. Careful planning paid off—although sales dropped to $72.5 million by 1932, they slowly recovered, rising to $89.2 million by the end of 1935.
A downside of the 1930s came from new competitors. The automobile's rising popularity made cheaper locations on city outskirts more accessible to customers. Labor disputes were also a problem for most department stores during this decade. In 1937 a union disturbance resulted in the arrest of a New York May store manager, and another caused panic among customers after strike organizers raised false fire alarms. Sales figures were not harmed by such events and reached $98.4 million by 1938, yielding a net profit of $3.8 million. By 1939 the company was once again ready to expand. Foreshadowing a 1940s trend toward suburban shopping centers, it opened a Wilshire Boulevard branch of its Los Angeles store, stocking it with merchandise for upper-income customers.