CORPORATIONS: The $1 Billion Five & Ten

Along a carnival-like half-mile of self-service counters and dashing pushcarts sat Tiki gods and aloha shirts, maki sushi and hibiscus plants. Through the aisles milled thousands of customers as varied and colorful as the more than 10,000 items stacked neatly on the shelves. They bore in their faces the mien and colors of all the Orient, wore cool-looking shorts, dresses and muumuus of every bright color, stepped lightly in street shoes, sandals, even bare feet. Thus last week, in casual Hawaiian fashion, the newest citizens of the U.S. welcomed the newest branch of an old American institution: F. W. Woolworth’s five-and-dime store.

Woolworth’s new store, set in modernistic decor (wall murals, blue-green mosaic tile) in the $28-million Ala Moana shopping center outside Honolulu (TIME, Aug. 10), is a far cry from the red-fronted, musty-smelling Main Street fixture known in hundreds of U.S. towns for its notions and knicknacks. It symbolizes the tremendous changes that have transformed a tradition-laden giant into one of the U.S.’s most experiment-minded retailers. Eighty years old this year, Woolworth’s has grown from the tiny Pennsylvania “Great 5¢ Store” founded by Frank Winfield Woolworth into the world’s largest variety-store chain (3,290 stores). The company is now adding new stores on the average of one every three working days, the greatest expansion program of its history.

To the Suburbs. Last year more than 800 million customers shopped at Woolworth’s Western Hemisphere stores (which include those in the U.S., Puerto Rico, Cuba, Mexico and Canada), spent $865 million for such traditional wares as 25 million growing plants, 17 million hair nets, and 75 million greeting cards. Woolworth’s is the world’s largest private server of food, last year cooked 6,100,000 Ibs. of beef, poured 109 million cups of coffee. Woolworthls own cup is running over so plentifully that the company’s 1958 sales and healthy profits of $32.4 million are equal to about half those of the ten other major U.S. variety chain stores combined.

Woolworth’s modernization has been forced since the end of World War II, as expanding supermarkets and drug stores grabbed an important share of the low-priced variety-store market. In self-defense Woolworth’s upgraded its merchandise, spruced up its stores, shifted its emphasis to self-service stores in burgeoning suburban shopping centers. To spark its superstore and self-service programs, Woolworth’s in 1954 picked a lifetime employee named Robert Campbell Kirkwood, who had started as a stock checker right out of high school in his home town of Provo, Utah 36 years before. Trim, quiet-spoken Bob Kirkwood, 54, did so well at the job that he became president and chief executive officer in 1958, when James Thomas Leftwich moved up to chairman (Leftwich resigned three months ago).

Kirkwood is chiefly responsible for the big changes that have lifted Woolworth’s face in the last five years. He guided the growth of self-service stores from 91 in 1954 to 993 last year, intends to push them to more than 1,120 by year’s end. He has hand-picked young, aggressive executives to balance the company’s age-heavy management, has centralized accounting practices to cut inefficiency. While building new stores (99% are self-service), he has not forgotten his older stores, is modernizing them at the rate of more than one a week.

Caviar & Shoplifters. By eliminating clerk aisles, Woolworth’s new air-conditioned, self-service outlets have doubled display space, now offer up to 40,000 different items (75% prepriced, many prepackaged), v. 30,000 five years ago. Customers can still buy hundreds of items for a nickel or a dime (most of Woolworth’s sales volume comes from items priced under $5), but many a Woolworth’s store now resembles a full-fledged department store. It will resole a pair of shoes, sell a slice of pizza or a Java temple bird ($1.79), even repair eyeglasses; it stocks clothing for all the family, home furnishings, portable TV sets, air conditioners, power lawn mowers (for $137.50, Woolworth’s top price). In its largest store—off Manhattan’s Herald Square, smack between Macy’s and Gimbels—Woolworth’s recently added a gourmet-food counter, where shoppers can indulge themselves with imported Holland ham ($1.98 per 2 Ibs.) and caviar ($1.15 per 1-oz. jar).

Woolworth’s insists that it will not be undersold, sends out teams of comparison shoppers to check competitors’ prices. The company is sometimes its own worst competitor. Reason: its bright bazaar of counters are a perennial lure for shoplifting. Says Kirkwood: “We are a temptation for every child to steal something. It is the price we pay for the privilege of displaying our merchandise.”

Overseas Outlook. The Woolworth growth design looks well beyond the U.S. The chain has more foreign-store ownership than any other U.S. retailer, is in the best position to take advantage of the explosive rise in the European consumers’ standard of living. It owns the majority interest in Britain’s 1,000-store Woolworth chains and 97% of Germany’s 85 Woolworth stores. This year dividends from the overseas companies are expected to rise to $16 million (from $12 million in 1958), help finance the company’s expansion at home.

To keep pace with changes in the U.S. economy, Kirkwood is planning more changes for Woolworth’s. The company is testing stores devoted to a single product line: in April it opened a horticulture store in Santa Clara, Calif., within the past 15 months has built three separate cafeterias within sight of Woolworth stores in Florida, Texas and Montreal. To compete better with department stores, Woolworth’s is now testing a revolving credit plan for its customers. Next spring it will open its first Alaskan store in Anchorage, thus covering all of the 50 states. Woolworth’s projection for 1960: sales of $1 billion from its “five-and-ten” business.