Zayre: The Story of Humble Beginnings and a Bittersweet End
Zayre was a household name for many folks in the eastern United States for over three decades. Founded in 1956, the discount store chain quickly gained popularity for its wide selection of affordable goods and convenient locations. However, despite its success, Zayre eventually met its downfall in the late 1980s.
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History and Expansion of Zayre
Zayre was founded as the New England Trading Company in 1919 by brothers Max and Morris Feldberg. Initially an underwear and hosiery wholesaler, the company supplied full-line department stores and specialty shops.
In 1929, the brothers opened their first retail store called Bell Hosiery Shops, which eventually expanded beyond just hosiery and underwear to become a women’s specialty store chain.
By the end of World War II, there were 30 Bell Shops in the New England region. In 1946, the company acquired Nugents, another women’s specialty store chain with locations in New York, Pennsylvania, Delaware, New Jersey, and Washington D.C., effectively doubling its number of stores and expanding its market area.
After the transaction was finalized, the brothers sat down with advertising consultant, Bert Stern, to discuss name ideas. When Max ended the conversation, he said “Zehr gut,” which means “very good” in Yiddish. After a short debate, the men decided to call the operation Zehr, but spell it as the name we recognize today – Zayre.
Zayre: Transformation into a Discount Store Chain
By the early 1950s, sales at Zayre had leveled off, and it became clear that changes were needed for the company to remain successful. The Feldberg brothers, Stanley and Sumner, studied the successful mill stores and decided to turn Zayre into a discount store.
In 1956, they opened their first store in Hyannis, Massachusetts, and soon after opened a second store in Roslindale, Boston. The chain continued to grow, with an average of 20 new stores added each year. In 1962, Zayre became a public company and was listed on the New York Stock Exchange.
Diversification into Specialty Retailing
In the 1960s, Zayre expanded rapidly across the eastern half of the United States, establishing a presence in nearly every state east of the Mississippi River. The company opened stores in clusters to maximize brand presence and advertising efficiency. And by the end of 1966, Zayre had 92 stores with major concentrations in the Chicago area, Miami, and Boston. In addition to offering a mix of soft lines, toys, sporting goods, records, books, and health and beauty products, Zayre also diversified into specialty retailing by acquiring the Hit or Miss chain, an off-price chain specializing in upscale women’s clothing.
In the 1970s, Zayre attempted to purchase the Marshalls chain. But when that effort failed, the company hired Bernard Cammarata, formerly the General Merchandise Manager of Marshalls, to create a clone called T.J. Maxx. The first T.J. Maxx store opened in 1977 and was successful with middle to upper-middle-income shoppers, leading to the further expansion of the off-price apparel market for Zayre.
The Beginning of the End
Within just six years of the first T.J. Maxx store opening, Zayre found another way to offer off-price fashion to the market. Chadwick’s of Boston started selling some Hit or Miss products via their mail-order catalogs. This crossover allowed customers to view the items in person before ordering. Thus, providing consumers with the convenience of home shopping.
By 1985, Zayre’s had undergone many transformations. The company was earning roughly 45 percent of its income from T.J. Maxx and Hit or Miss, launched B.J.’s Wholesale Club, and acquired Gaylord’s, a former chain store. The only problem was that most of the new Zayre stores that opened in the ’80s had messy appearances and cluttered aisles. Though the company attempted to rebrand its image through celebrity advertising, these efforts fell short. And by 1986, it was evident that the demand for Zayre was declining, though the other brands were still going strong.
In the late 1980s, Zayre struggled and faced many challenges. From announcing $69 million operating losses on $1.4 billion revenue to disorganization and unclean stores, it was evident that Zayre needed to consider restructuring. Because TJX Companies was still yielding a profit, company leaders felt the best plan of action was to focus energy on that portion of the company.
In doing so, Zayre sold off almost 400 locations to Ames Department store for a receivable note of $140 million of Ames preferred stock and $431.4 million in cash. As the company continued to focus attention on the more profitable side of the business, it began spinning off its subsidies, such as Waban, Inc., which operated Home Club and B.J.’s Wholesale Club. The same month, the company acquired all outstanding minority interests in TJX and eventually merged Zayre and TJX together.
Sadly, by 1990, every Zayre location had closed or been converted into an Ames location. What Americans once knew as the fifth largest discount retailer was just a memory. As we look back on the history of Zayre, it’s important to remember the joy that Zayre brought to so many people and the lasting impact it had on the retail industry. So, here’s to the memory of Zayre!
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