For decades, Gimbels was more than a department store, it was a retail institution, a name woven into the fabric of American shopping culture and forever linked to its friendly (and sometimes fierce) rivalry with Macy’s. Its flagship stores were landmarks. Its holiday parades, advertising battles, and bargain floors gave it a personality unmatched among its peers. Yet by the late 1980s, the chain that had once operated more than 700 stores across the country vanished almost overnight. The death of Gimbels is not just the story of a business failure; it is the story of shifting American consumer habits, corporate missteps, and the slow erosion of a retail empire that once helped define how a nation shopped.
Gimbels began in 1842, when Adam Gimbel, a German-Jewish immigrant, opened a humble trading post in Vincennes, Indiana. His philosophy was simple: offer fair prices and treat customers as equals. The model worked, and the business expanded into Milwaukee, Philadelphia, Pittsburgh, and eventually New York City. By the early 20th century, Gimbels had become a major national retailer known for competitive pricing, wide inventory, and an emphasis on accessibility. While Macy’s cultivated glamour, Gimbels cultivated practicality, “the store for the people,” as its executives often said.
The rivalry between Gimbels and Macy’s became the stuff of American legend. Their Herald Square competition in New York fueled advertising wars, promotional stunts, and customer loyalty on both sides of the street. The feud became so iconic that it inspired the plot of Miracle on 34th Street, where the two stores’ rivalry formed the backdrop for the film’s central conflict. For many New Yorkers, choosing between Macy’s and Gimbels was as much a personal identity as it was a shopping preference.
But beneath the friendly competition was a growing challenge: the American retail landscape was changing. After World War II, suburbanization transformed the way people shopped. Families moved away from city centers, lured by new housing and highway networks. Shopping habits shifted accordingly, and the rise of suburban malls created both opportunity and peril for department store chains. Macy’s adapted aggressively, opening suburban locations and investing in modernized merchandising. Gimbels, however, expanded unevenly, acquiring stores in markets that did not always complement the brand’s identity. Some locations thrived; others struggled to find their footing.
By the 1970s, cracks in the empire were visible. Gimbels’ parent company, Brown & Williamson, the tobacco giant, showed little interest in retail innovation and expected steady revenue without substantial reinvestment. While competitors updated store layouts, improved logistics, and embraced new marketing strategies, many Gimbels stores became dated. Shoppers noticed. Younger consumers gravitated toward up-and-coming specialty retailers and lifestyle brands, leaving traditional department stores fighting for relevance. Gimbels’ once-celebrated bargain floors and promotional events began to feel out of step with the era.
The real turning point came in the 1980s. Brown & Williamson, eager to shed its non-tobacco holdings, sold Gimbels to the Batus Retail Group, which already owned Saks Fifth Avenue. The new owners chose to focus on Saks, a luxury chain with far higher margins and stronger brand identity. Gimbels, seen as unfocused and outdated, received little corporate support. Instead of modernization, stores experienced cuts, closures, and shrinking inventories. Sales fell even further, and what had once been a beloved shopping destination grew eerily quiet.
On May 15, 1986, the announcement became official: Gimbels would close all its stores. Shoppers flocked to liquidation sales, walking through aisles that had once bustled with holiday crowds but now felt strangely hollow. After more than a century of rivalry, Macy’s stood unchallenged, not because of a dramatic victory, but because its competitor simply faded out of existence. When the final Gimbels store closed later that year, an entire chapter of American retail history closed with it.
If the collapse of Woolworth symbolized the end of the five-and-dime era, the death of Gimbels marked the decline of the classic mid-tier department store. It was undone not by one catastrophe, but by slow erosion: suburban migration, the rise of specialty retailers, corporate neglect, and a failure to evolve as consumer expectations shifted. The Gimbels name survives today mostly as a nostalgic reference, a ghost lingering in holiday movies and vintage advertisements. Yet its legacy endures in another way as well, as a reminder that even iconic brands must continually adapt or risk fading into memory.
Sources & Further Reading:
– New York Times archives: Gimbels closure announcements and financial coverage (1985–1986)
– Milwaukee Historical Society: Early history of the Gimbel family and business expansion
– Retail Industry Yearbook: Analyses of department store consolidation in the 20th century
– “Miracle on 34th Street” production notes referencing Gimbels–Macy’s rivalry
– Smithsonian: Exhibits on American retail history and department store culture
(One of many stories shared by Headcount Coffee — where mystery, history, and late-night reading meet.)
