Lechmere

This article is about the retailer. For other uses, see Lechmere (disambiguation).

Lechmere, Inc.

Industry	Retail
Fate	Liquidation
Founded	Boston, Massachusetts (1913), later Woburn, Massachusetts
Defunct	1997
Headquarters	New England
Products	Electronics, housewares, appliances, exercise equipment, footwear and music

Lechmere ( /ˈliːtʃmɪər/; sometimes described as Lechmere's) was a New England retail store that closed in 1997.

History

Lechmere Inc. was a retailer of electronics, appliances, and other goods, with 24 stores located throughout New England and New York. The company was founded in the early twentieth century and expanded during the postwar years as a family business offering an eclectic mix of products. Upon its sale to Dayton Hudson in the late 1960s, Lechmere underwent rapid expansion into five states in the Southeast. In the late 1980s, however, Lechmere's executives took the company private and closed some of its newer facilities in order to focus on the New England market. In early 1994, Lechmere was once again purchased by a national chain, as Montgomery Ward acquired the business.

Lechmere traces its origins to 1913, when Abraham "Pop" Cohen, a Russian immigrant who had settled in Massachusetts, purchased the harness-making shop at which he worked. The A. Cohen Harness Maker shop was located in a district of Cambridge known as Lechmere (around present-day Lechmere Square), named after Lord Lechmere, a British Tory who had helped to develop the area during the eighteenth century. Cohen soon changed the name of his business to Lechmere Harness Shop.

Over the next ten years, as automobiles began to replace horse-drawn carriages, the need for harnesses declined. In response, Cohen decided to shift the focus of his business to include tire sales. To reflect this new emphasis, the company's name was changed to the Lechmere Vulcanizing Company. In 1945, Cohen brought his three sons, Maurice, Norman, and Philip, into the Lechmere business, and the company became a partnership.

After World War II, when demand for a wide variety of consumer goods increased dramatically, the Cohens moved to broaden their product line beyond tires. They began to offer small appliances, and, in 1948, the company's name was changed to Lechmere Tire & Sales Company. Also that year, the business was incorporated.

In the early 1950s, Lechmere expanded its operations further. The company began to offer a wider variety of household goods, devoting more display space to televisions and other popular appliances. Additional floors were added to the store, and the expanded showroom began to feature cameras, luggage, silver and other flatware, sewing machines, toys, and lawn and garden tools.

In an effort to distribute its wares more efficiently to customers, Lechmere introduced the concept of the "pick-up counter" in the early 1950s. Customers would examine models of the various products available on a showroom floor, and then go to another location in the store to pick up one of the items they had selected. In 1956, the Cohens bought an old bus garage at 88 First Street in Cambridge, around the corner from their store. This property was converted into the company's main retail store. With this additional space, Lechmere expanded its product line even further, offering records, jewelry, sporting goods, and additional appliances and household wares, along with its standard line of televisions and large appliances.

To draw the large client base needed to maintain its high-volume operation, Lechmere became one of the first local retailers to advertise extensively on television. In order to help people remember its address at 88 First Street, Lechmere adopted the gimmick of setting all of its prices at a dollar amount, plus 88 cents. This signature pricing policy was later adopted by other discount retailers.

Lechmere became known in the Boston area for its unusually diverse selection of merchandise as well as the visible involvement of the Cohens, who often walked about the store meeting customers and inviting their comments. By the early 1960s, the company was ready to expand its facilities again. In 1963, construction of a new, modern building at the 88 First Street location was completed. This steel-framed facility encompassed 100,000 square feet (9,300 m²) and provided room for the Cohens to branch out into the retail of office equipment, hardware, accessories for the bath, books, greeting cards, and tobacco. Lechmere also opened a four-bay auto servicing garage in its new building.

Two years after this expansion, Lechmere opened its first store outside of Cambridge, in Dedham. When this venture proved successful, the Cohens began to explore the possibility of further geographical expansion, and, by 1967, they had developed a plan to open three more stores over the next five years.

Sale To Dayton Hudson

The Cohens soon recognized, however, that they would need a significant infusion of capital to pay for the construction of new stores. To gain access to the funds necessary for expansion, they decided to sell Lechmere to another department store chain, Dayton Corporation of Minneapolis.

Under the agreement, Dayton would hold Lechmere as a separate subsidiary, leaving much of the day-to-day operations under control of the Cohens and their store managers. On February 28, 1969, the sale was completed, and Lechmere became a subsidiary of the newly formed Dayton Hudson Corporation, after Dayton merged with the J.L. Hudson Company. With the financial resources of a much larger company behind it, Lechmere embarked upon a program of geographical expansion in the 1970s, and, by the end of 1971, the company had added two more stores, in Danvers and Springfield, Massachusetts.

During the 1970s, the Cohens gradually began ceding control of the firm's day-to-day operations, and Lechmere's product line began to change, focusing increasingly on traditional discount store fare, which was inexpensive and frequently of lower quality. As a result, the company's reputation for offering unique merchandise began to suffer, and sales began to decline. In an effort to counteract this trend, Lechmere embarked upon a program in the late 1970s to boost sales by cutting prices dramatically. With this strategy, sales at the chain's stores began to increase. In 1977, Lechmere opened a fifth store, in Manchester, New Hampshire, and the following year a sixth store was opened in Framingham, Massachusetts.

Lechmere was known for its Washington's Birthday sale where they featured full-size Table Talk cherry pies for 10 cents.

Lechmere languished under Dayton Hudson's corporate guidance until 1980, when C. George Scala was named CEO. Scala revamped the stores' offerings, from an at times arcane and exotic selection of goods (from tires to snake meat) to a core grouping that included housewares, appliances, sporting goods, electronics, and music. Lechmere offered a wide and deep selection of these products. The stores carried telephones, for example, with choices in every price range from inexpensive to the top of the line.

Lechmere was almost a mall within a mall. Its home electronics department was able to compete product-for-product with Tweeter, its houseware department offered as much, if not more, than Lechter's (a retailer that has since closed its doors), its footwear department could compete with Foot Locker, and its music department was as large and varied as Recordtown's (another retailing ghost). "Our customers don't want cheap steak, they want steak cheap!" was a familiar saying. While Lechmere did not offer "rock bottom" pricing, it did offer competitive pricing, a no-hassle return policy, very knowledgeable sales associates, colorful and informative signing in store, and its famous Lechmere Sunday circular. The stores were large, clean, bright, and uncluttered. This was to be the heyday of the company, which also saw an increase in retailing excellence with the addition of Frank G. Fellicella as Executive Vice President of Stores, who would later become CEO of a large home improvement company named Builder's Square (this appointment took place in 1993).^{[citation needed]}

Split From Dayton Hudson

In 1989, the company's management, with the help of a local investment firm, Berkshire Partners, and the Boston-based mall developers Steve Karp and Steve Wiener, bought the chain from Dayton Hudson. The sale was the second largest leveraged buyout of the year. Lechmere's 29 stores fetched only book value of $234 million, much less than early estimates of $350 million.

A result of the sale was the closing of the southeast region, and the stores located there. The cost of running what amounted to two companies (one in New England, and one in the deep southeast) was too costly for the now privately owned venture. Then, in the early 1990s, C. George Scala retired and was replaced by J. Kent Flummerfelt, a veteran Sears merchant. Things started to turn sour with several rounds of layoffs. The new management style implemented by Flummerfelt challenged merchandise assortments and product categories. The result was a lesser product offering in terms of depth and breath of product assortment, which started to alienate customers and triggered the downward spiral of the company.

Montgomery Ward

In March 1994 Berkshire Partners sold Lechmere to Montgomery Ward Holdings in a more than $200 million deal. Berkshire acquired the business in 1989 and according to Berkshire Partner Richard Lubin, the firm initially wanted to take the business public.

He said at the time, "As we learned about the Montgomery Ward strategy, we realized this was a buyer that could make a very attractive offer, an offer that we thought was above what we viewed our IPO offering would have been." In 1993, Lechmere had sales of more than $800 million, through 24 stores in the New England area.

At the time of purchase, Lechmere had 28 stores and grew to 33 with the introduction of HomeImage by Lechmere stores that opened in August 1996. However, the business press was soon calling Montgomery Ward's purchase of Lechmere a disaster, and less than five years after the acquisition, the company was forced to liquidate Lechmere's assets. In 2000, Montgomery Ward itself was forced into bankruptcy protection amid competition from the likes of Wal-Mart and Target, and the company eventually shuttered its stores and closed after 128 years in business.

Closure

On August 1, 1997, Montgomery Ward announced that all Lechmere stores were to be closed as part of their bankruptcy reorganization. At the time of the chain's closing, 27 stores remained open, including 20 in New England, 12 of which were in Massachusetts. All six HomeImage by Lechmere were also closed at that time. November 7, 1997 was the last day of business for all locations, and all remaining items, which had been increasingly discounted, were offered at 90% off.