When Takeovers Turn Into Makeovers
WHOEVER said that the more things change, the more they stay the same hadn't reckoned with mergers and takeovers.
Customers visiting Gump's, one of San Francisco's most loved institutions, are finding unsettling changes these days. In the luxury retailer's windows, small signs announce a clearance sale. On the first floor, display cases that once held magnificent jewelry - jade, emeralds, freshwater pearls - now stand almost empty. A similar barrenness characterizes the third floor, formerly filled with handsome furniture, lamps, and Asian antiques.
What the signs in the window don't explain is that this legendary store, which for seven generations has been synonymous with San Francisco, has been bought for an estimated $10 million by Horn & Hardart, a New Jersey company that once ran New York's Automat restaurants and now distributes mail-order catalogs.
To loyal Gump's fans, news of the sale can produce the same shock they experienced in 1978 when they heard that Avon was buying Tiffany's. At least that store still looks the same as it did when Audrey Hepburn strolled through it three decades ago in "Breakfast at Tiffany's." But here at the "Tiffany's of the West," as Gump's is known in the industry, major changes seem inevitable as new owners discontinue some of the traditional product lines that have always formed the heart of its business.
On the first day of the store's big sale three weeks ago, one customer told a local reporter, "I'm afraid this store will never be the same. It's too bad. The world is going K mart. You can't fight it." Last week customers and sales clerks alike still seemed shaken. Two well-dressed women, standing at a clearance table, looked visibly distressed as they asked a clerk, "Is it true the whole store is closing?" (No.)
What is true, sadly, is that 180 employees will be laid off. They can reapply, but no one knows how many will be rehired. Horn & Hardart has announced plans for "a downsizing" at the store, which has been plagued by losses in recent years.
Eras end regularly these days. That is not always bad - change has its virtues. But what is happening at places like Gump's symbolizes a seismic shift in retailing - a homogenization as family-owned stores get swallowed up by huge firms. Gump's itself has been owned by a Tokyo conglomerate since 1989.
Once upon a time, businesses were run by people intimately connected with the products they sold. In the case of Gump's, it was A. L. Gump, a son of the founder, who indulged his love for Oriental art by stocking his store with beautiful and exotic artifacts.
Now family-owned stores appear to be an endangered species. It takes a corporate family tree to keep track of parent companies and their widely scattered offspring. With the malling of America, one mall becomes almost indistinguishable from another, each filled with chain stores offering identical goods.
How remotely can mind and heart and body distance themselves from an enterprise without damaging that enterprise? Can the agri-businessmen operating in three-piece suits from a city skyscraper, watching their crops grow as dollar signs on a computer screen, ever know what a farmer knows with the dirt under his fingernails, smelling his crop? And can the financiers who now run publishing companies ever understand the book business the way the tweedy editors they have replaced do?
The merger-magicians buy a bakery, hire an ad agency to write copy praising old-fashioned pure ingredients, and employ an actor to twang about bakin' with a little bit of love. But could the new moguls bake a corn muffin if their lives depended on it?
As the marketplace grows daily more abstract, with the focus on spreadsheets rather than the goods themselves, the old hands-on connections are being lost between manufacturers and their products, between sellers and buyers. Manufacture by automation, shopping by interactive TV - this is the promise of the future. The supposition is: Who needs to meet the customers face to face when your computers can interface? Maybe. But first, somebody should check it out with the customers at Gump's and a thousand ot her stores who feel they have lost their store.