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| Type | Discount membership store |
|---|---|
| Founded | 1948 |
| Headquarters | San Diego, California |
| Industry | Retail |
| Products | clothing, footwear, housewares, sporting goods, hardware, toys, electronics, food |
| Website | None |
FedMart was a chain of discount department stores started by Sol Price, who later founded Price Club. His first location in San Diego, California was in a converted airport hangar. It was originally a discount department store open to government employees, who paid a membership fee of $2 per family. FedMart's first year was highly successful. Over the next 20 years Fedmart grew to include 45 stores in a chain that generated more than $300 million in annual sales. However, Price sold FedMart Corp. after losing leadership of the company in 1976. Soon the business took off, expanding to several states in the Southwest United States. Many stores were previous White Front or Two Guys locations. Price later sold the chain to Hugo Mann, a German retail entrepreneur, in 1975.
History
Sol Price began his storied career in the mid-1950s, when he was working as an attorney in San Diego. His first venture sprang from the coincidence of two fateful events: the inheritance of a vacant warehouse in his home town and a knock on the door of his law office. Price needed to find a tenant for his warehouse, and the solution to his problem was answered by the knock on his office door. A couple of Price's clients had stopped by to ask him to take a short trip to Los Angeles to give his opinion on an unusual business they had come across. The clients were involved in the wholesale jewelry business, and they had been selling watches to a non-profit, member-owned, retail operation in Los Angeles called Fedco. Price made the trip north and noticed that Fedco's facility was similar to the warehouse he had inherited. He asked his clients to look at his warehouse, suggesting that his building could be used for the same purpose. His clients agreed, marking the beginning of FedMart and the first traces of the membership club industry.
The business was begun in 1954, started with a $50,000 capital investment.[1] Price solicited the help of eight individuals, who each invested $5,000, and he convinced his law firm to invest the remaining $10,000. Price obtained his inventory from his clients, beginning with the two jewelry wholesalers. Another client, who was involved in the furniture business, provided Price with a small selection of furniture. A third client sold liquor, giving Price's FedMart the odd merchandise mix of jewelry, furniture, and liquor. He opened membership to government employees of all levels—federal, state, and local. Despite the less than comprehensive selection of goods, Price's business thrived from the start, collecting $4.5 million during its first year in business, four times the total projected by Price and his investors.[1]
Success spawned the establishment of other warehouse stores and a more coherent merchandising strategy. FedMart developed into a chain of stores, and along the way, Price pioneered several innovations in the retail industry. FedMart became the first retailer to sell gasoline at wholesale prices. The chain was the first to open an in-store pharmacy. FedMart also opened in-store optical departments, establishing a format that was aped widely decades later. Aside from developing several industry firsts, Price guided the company into food retailing, a product line that would underpin the chain's development. Price was joined in his business by his son, Robert, who served as FedMart's executive vice-president until they sold two-third of the chain in 1975 to the German retail company Hugo Mann.[1] The company was then 21 years old with sales in excess of $350 million at forty stores.[2] Price was fired less than a year after the Hugo Mann takeover. The store chain failed within seven years.
References
- ^ a b c Jakobson, Cathryn, "Sol Price and his warehouse clubs have sparked a revolution in the retail trade", New York Times, December 4, 1988, pg TBW24
- ^ Markowitz, Arthur, "Discounting Hall of Fame: Sol Price: his deeds speak louder than words - founder of Price Club", Discount Store News, August 22, 1988, FindArticles.com. 07 Jul. 2008. http://findarticles.com/p/articles/mi_m3092/is_n17_v27/ai_6580396
External links
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