< Back
“The story of my father and the business that he built has a very familiar ring. It is as American as New England and as earthy as common toil. It is a story repeated in a hundred different forms by men who had the same dreams and the same vision as my father, the same dogged determination, the same sense of values — and lastly, but most important, the same fine sense of timing—or the ability to recognize that the time was ripe for the fulfillment of their ambitions.”
— Stanley Kresge, Oct. 8, 1957
Sebastian S. Kresge started his working life as a traveling salesman, selling tinware for W. B. Bertels Sons & Company of Wilkes-Barre, Pennsylvania. He earned straight commission and traveled the northeastern corner of the U.S. for five years, saving up $8,000. In his job, he sold to Woolworth and came to know its proprietor, Frank W. Woolworth. In 1896, Kresge tried to persuade Woolworth to bring him in as a partner, an offer Woolworth rejected.
Instead, Kresge found a business partner in John G. McCrory, who ran eight stores scattered in mostly small towns in Pennsylvania and New York. Two were five-and-ten-cent stores, and McCrory brought on Kresge to help manage them. In 1897, Kresge traveled to Memphis and opened a store there as an equal partner to McCrory. Later that year, the duo also opened a Detroit store on Woodward Avenue. By 1899, Kresge was the full owner and manager of that store, and the S.S. Kresge Co. was born.
Business boomed as the trend of chain discount stores took off across America. Kresge’s experience working through the depressive 1890s gave him a spendthrift attitude that served him and his growing business well. He said, “When one starts at the bottom and learns to scrape, then everything becomes easy. In periods of great depression, a man has a chance to learn what bedrock business is. And when he has learned that, he is not in so much danger later of being caught in the fluff that surrounds easy money.”
The second Kresge store opened in Port Huron, Michigan, and the third in Pontiac in 1900. A Toledo, Ohio store opened in 1902.
After 1904, stores opened quickly. Kresge purchased retail competitor Holmes, Tolle & Evans and a store owned by Woolworth’s brother, H. G. Woolworth. By 1912, Kresge had incorporated his company in Delaware, operating 85 stores with $10.3 million in sales. In 1916 the business reincorporated in Michigan, boasting 160 stores with sales of $26.3 million. By 1924, there were 257 stores with sales of $90.2 million. And 25 years later, the retail empire had grown to 694 stores with annual sales approaching $300 million.
“I had the right idea at the right time and in the right place,” said Kresge, who retired in 1925 as president (but remained chairman of the board until the year of his death in 1966). The idea, new at the time, was to display many items on open counters where customers could easily examine and inspect them. Prior to this, merchandise was displayed behind the counter and required a salesperson to retrieve it. Kresge’s merchandising strategy also relied on quick inventory turnover and stocking mass-produced goods that kept items standardized across stores. The S.S. Kresge Co. grew to be the second-largest variety chain in the U.S.
The stores changed as retail trends matured over the years. The company battled anti-chain store sentiment in the 1920s and 30s. While floorplans expanded and merchandise offerings swelled, Kresge focused on keeping the average cost of items low and affordable. (By World War I, prices had crept to about 15 cents.) Many stores offered lunch counters. By the 1950s, a typical store carried more than 15,000 items and featured check-out lanes rather than a salesperson behind each counter. The company employed more than 35,000 employees by the mid-1950s.
During a 1957 address, Sebastian’s oldest son and long-time executive within the company, Stanley Kresge said, “I feel the chain stores have kept pace and have kept faith. Our store managers are urged to become active, cooperative citizens and to take part in the community life where they live. Local contractors are used where we build new stores. Most food buying for our stores is done at the local level; employees and supervisors are selected locally, and from those, we frequently develop, through our own executive training program, new prospects for managerial and other advanced positions.”
In January 1962, under the leadership of President Harry B. Cunningham, a Kmart-branded store opened in San Fernando, California. A few months later, the more widely accepted “first” full-fledged, 80,000 sq. ft. Kmart store opened in Garden City, Michigan. That year the company had grown to operate more than 820 stores under both the Kresge and Kmart names, and had total sales exceeding $450 million.
Kmart store openings accelerated nationwide throughout the next three decades, eventually replacing Kresge stores, the last of which were sold to the McCrory Corporation by 1987.
By 1996, Kmart was a global company operating more than 2,100 stores with $31 billion in sales. However intense competition pushed the company to lose its standing as the second-largest U.S. retailer and it filed for bankruptcy protection in 2002. In 2004, the new Kmart Holding Corporation bought Sears, Roebuck and Co. The corporation changed its name to Sears Holdings and relocated its world headquarters from its metro Detroit origins to Chicago soon after. The corporation continued to struggle financially and closed hundreds of stores throughout the 2000s. As of late 2023, only two Kmart stores – in Miami, Florida, and Bridgehampton, NY – remain open.