The Woolworths Museum

Overview: a brief history of Woolworth in Germany

Proud of its value heritage and fit for the future


Frank Woolworth's first visit to Germany in 1890

Map showing the route of Frank Woolworth's first European buying trip in 1890.By 1890 Woolworth had established a friendly rival network of over 100 5¢ & 10¢ stores in North America with a group of former co-workers and had built a reputation for outstanding value and stores that attracted huge crowds. His USP was to buy directly from factories cutting out the wholesalers. He offered up-front cash for huge orders of a small number of lines, to be shipped to his central warehouse, helping his achieve an ultra=low cost price. As copycat chains started to emerge, he looked further afield to broaden his range. A friend offered to introduce him to the world's most modern, automated factories, in England, France and Germany. The buying trip took over four months and became a key driver of the chain's success

According to his diary, Frank Woolworth loved thhe peace and solitude of Frankfurt's Cathedral and he really regretted not being able to speak German and having to rely on interpreters or English-speaking suppliers. Among the treasyres that he bought for the five-and-ten were fine porcelain cups and saucers from Mysen to sell for 10¢ colorized printed postcards using a team of artists and a super-fast 100x150mm double-sided press, from a supplier who would take photographs or line drawings by American artists, colour and reproduce them as postcards which they would supply for just over 1¢ each and which he believed he could sell for 5¢ for the best designs and two for 5 ¢ for the rest.

Christmas Decorations like these from 19th century Germany (today's Russian Federation) were Frank Woolworth's most profitable line. The Company sold many millions, all at high margins, between 1879 and 1939.His other favourites were toys, particularly dolls made in many home-based businesses dotted around Sonneberg, and glass blown Christmas Decorations, in shapes like Owls, Smoking Pipes, Santa Clauses and Musical Instruments. He set up a warehouse in Sonneberg which offered to pay cash for a gross of any of his approved lines that matched a basic agreed speicification. Between 1890 and 1914 it is estimated that Woolworth sold more 250 million German made pieces in the USA. By the twentieth century imported goods from Europe accounted for over 25% of his range and 40% of the profit generated by the Syndicate in North America.


Foundation of the Germany Subsidiary in 1926


In 1924 the F.W. Woolworth Co. chairman, Charles Sumner Woolowrth, the brother of the Founder, travelled to Europe with his Finance Director and Vice-President responsible for overseas operations, Byron De Witt Miller. The two wanted to visit the elegant new stores opened by the British subsidiary in two prime shopping streets in Central London to rival the parent's branches in Fifth Avenue, New York and State Street, Chicago, before crossing to Europe to explore the viability of a plan developed by Miller to open a subsidiary in Germany, intially to bolster the supply chain for European Goods for export to New York, and later to test the market and assess the viability of a chain of 25 und 50 Pfennig Stores across the Weimar Republic.

The F.W. Woolworth Co. Chairman, Charles Sumner Woolworth, and its Treasurer (Finance Director), Byron De Witt Miller, who would later become its third President, pictured in around 1924.Charles G. Dawes, a former Director of the Bureau of the Budget who had become an esteemed Chicago Banker, brokered a deal to resolve the issue of Germany's post-war reparations and to secure investment in Weimer Germany's economy to start it growing again. He was rewarded by sharing the Nobel Peace Prize in 1925, and was elected Vice President of the USA serving under Calvin Coolidge from 1925 to 1929. President Hoover later appointed him Ambassador to the Court of St James, in London, England from 1929 to 1931Miller had been drawn to Germany by the Chicago Banker, Charles G. Dawes, who had been tasked with fixing the country's economy so it could resume the reparations imposed after losing the Great War. He wanted US firms to invest there. The FD had been grappling with how to boost the efficiency of FWW's German sourcing which was missing Frank Woolworth's guiding hand. Miller felt a German subsidiary could map a global supply chain by rebuilding the warehouse in Sonneberg and updating Fuërth, before shaping a new store chain for the Weimar Republic.


Miller and Woolworth were certain that the brand would strike a chord with Germans, particularly if it followed the pattern of Frank's early Stateside shops, which had concentrated on everyday essentials at jaw-drop prices for the home, kitchen and bathroom, along with notions (Haberdashery) and simple stationery. Any displays of ornaments, toys and luxuries would be kept small until family incomes started to grow as the economy improved. They feared that they would meet with resistance from Company President, Hubert Parson, even though he was well aware that German shops had been his former boss and mentor's dream. Returns were falling at home, making the parent increasing dependent on profits from the UK, prompting Parson to keep capital spend down.They would have to convince him that Germany was the answer to his prayers.


Launch of the F.W. Woolworth 25 und 50 Pfennig Stores

Richard H, Strongman The long-serving German American executive who was parachuted in as the first MD of F.W. Woolworth G.m.b.H. and led the business from 1926-1933 and his first local recruit, Ivan F. Keffer, his Deputy and the second MD from 1933 to 1938.Rudolph Jahn was a German who trained in America immediately after the first world war, before taking up a position at the F.W. Woolworth Co's huge warehouse in Sonneberg, Germany in 1920. He was hand-picked as a Director of the new German subsidiary when it was founded in 1926, participated in the scouting of the country and the selection of the first waves of stores to open. He later took over as the Store Chain's Third M. D., mastering the immensely difficult task of leading the company through World War II and rebuilding it, almost from the ground up after the Allied Victory in 1945. His contribution to the German Woolworth company was absolutely outstanding in the most difficult of circumstances.  He is pictured in front of the new Sonneberg Warehouse, constructed in 1926 and the hub of a global supply chain until World War II. His masterpiece was razed to the ground by the USAF when news broke that the Nazis were using the building to store and prepare munitionsParson gave in, making German-American executive Richard H. Strongman the first Geschäftsführer (MD) as proposed. He duly incorporated the company in 1926 and hired its top team, choosing locals Ivan W. Keffer as his No. 2, and Rudolph Jahn, who had trained at FWW USA before taking a role at its Sonneberg Warehouse in Germany when it opened in 1920. The three reimagined that facility as the super-efficient hub for New York's global sourcing and oversaw the work.


Once reconstruction began, the Directors scouted the country, visiting each major town and city in turn and applying the time-served process defined by Frank Woolworth. It measured the amount of foot traffic on the main streets, the current and forecast population and the key industries to determine which places would suit a Woolworth's and whereabouts in town it should be. Normally the chosen spot was near a transport hub, close to other shops and in a town or city with manufacturing and heavy industry or docks and freight yards employing lots of people. As they travelled, it was clear that Germany was ready and had huge potential. When a town fitted, before leaving they searched for any vacant buildings near their chosen spot, or failing that tried to persuade an extisting trader to sell-up and retire. With the tour complete they pulled together a masterplan for the openings. The new chain would be a birthday present for New York, as 1927 marked the Fifteenth Anniversary of its Wall Street listing in the $65m merger. They advised Executives to tell investors, "Here we grow again."

The Woolworths Museum is very proud to reveal, for the first time in many years, genuine photographs of the upper salesfloor at F.W. Woolworth G.m.b.H. 26-29 Faulenstrasse, Bremen that were taken immediately before its preview opening on Friday 29 July, 1927. No wonder it was such a hit!  If you are using an older browser or operating system you will see a single still. But if you're on a state-of-device you should see a sequence of six images.Announcing the opening of the first German Woolworth store at 26/28 Faulenstrasse in the Northern port city of Bremen. The magnificent opening ceremony took place on Friday 29 July 1927 between 2.30 and 6pm, with the store opening for trade at 8.30am the following morningNew York approved the plans as written, instructing "proceed without delay". The northern port city of Bremen was 'Ground Zero', quickly followed by Barmen, Bochum, Wiesbaden, Dortmund, Hamborn, and Duisburg, finishing in Berlin within a year. Six months after the sign-off, a marching band and orchestra welcomed customers to a preview at 26-28 Faulenstrasse at 2.30pm on Friday 29th July, 1927. Trading began at 8.30am the next day, and broke all records. Larger view..


For five years the new-born company was Woolworth's wonder-child, expanding its chain, sales and profit far faster than any country had achieved before. Directors later described the period as "Der große Errfoig, or "The Great Success". But then the bubble burst. Intense competition from fixed price shops had disrupted the market. It came not only from Woolworth but from look-alikes, Epa, Ehape and Wohlwert (craftily named how most Germans would naturally pronounce the name above FWW's door). It spooked both the competition, and a rapidly-rising popular politician who hated foreign firms taking trade from Germans and sending the profit home. His name was Adolf Hitler. In 1932 the Reichstag, Germany's parliament, passed a law banning fixed priced stores from opening any more outlets. MD Strongman was able to use Woolworth's huge supplier base, cash purchases of goods for export to New York, and projects already in progress, to obtain a temporary exemption until the end of the year, when he chose to retire. He passed the baton to his number two, Ivan Keffer on 1 January 1933, the day the firm moved into plush new offices in Bellevuestrasse II, Berlin, W.9. The new Geschäftsführer faced a rocky road ahead, particularly after the Reichstag mysteriously burnt down in July, completing Hitler's rapid rise to absolute power and the supremacy of his National Socialist Party.

Initially called the Austrian Brigade, soldiers from the S.A. 'spontaneously' decided to picket the doorstep of several Woolworth shops in Germany's largest cities like this one in Berlin. Initially they protested that the management of the parent company wouldn't say whether they were Jews or not.  After the New York Board grudgingly responded that the Chairman Sumner Woolworth and many of his board were members of the Methodist Church, the protesters changed tack, waving placards encouraging Germans to shop only at German stores like the one opposite.One of the printed and neatly presented placards waved outside foreign-owned shops by so-called spontaneous S.A. Protestors, advising Germans to shop only from German-owned shops, thereby defending themselvves against Jewish atrocity propaganda.

New York was unimpressed when Ivan Keller sent an enquiry from the Commerce Ministry asking if any Director in New York or Berlin was Jewish. They replied that their Board consisted of Methodists, along with two Catholics and a pair of aetheists. Berlin could answer for itself. Keffer duly updated the Ministry, receiving a terse acknowledgement for his satisfactory if rather tardy response.


But the protestors outside his largest stores didn't disperse. They simply swapped one set of placards for another. Instead of protesting about possible Jewish management, the new signs advised Germans to buy only from German shops and not to be taken in by Jewish propaganda about atrocities. Keffer's problems didn't end there. Every week there seemed to be new rules restricting his freedom to act and manage the business. By the end of 1935 he could not allow cash from F.W. Woolworth G.m.b.H. to leave the country, except in payment for approved imported goods. Returning profits to a parent company was explicitly prohibited by law. Foreign-owned companies were required by law to deposit any surplus cash in German-owned banks or invest it in German-owned businesses.

By 1938 the parent company had sacrificed more than fifteen million reichsmarks ($6m) in unpaid dividends and thought it best to move their loyal MD, Ivan Keffer, who had repeatedly riled the German authorities, out of harm's way to the Executive Office HQ in Toronto, Canada. They tried to place control of most aspects of German operation in the hands of their local lawyers, but the arrangement did not meet with approval from the authorities, which instructed Rudolph Jahn, rated a loyal citizen, to take the helm. It fell to him to chart a way forward. He had to try to maintain morale as the nation went to war, keep trading as shopping streets faced enemy bombardment, and after the Allied victory in 1945 put it all back together, a piece at a time. By the time the conflict finally ended, both warehouses and the great majority of stores had been obliterated from the face of the earth, forcing New York to reduce the value of the subsidiary to a single dollar in its accounts. Jahn led the firm with great skill and resolve for over a quarter of a century. When he retired in 1964 he had served forty-five years as an Executive, including 39 as a Director and 26 as MD. Across the globe no other individual, not even the Founder, faced and mastered more challenges in office. Jahn richly deserves his place in the Woolworth Hall of Fame.


Rebuilding and reshaping after World War II


This short film, which draws on the German company's 1963 history which was published as memento for Managers and Staff by the long-service Managing Director Rudolph Jahn in 1963 shortly before his retirement after 44 years exemplary service, shows the regeneration of Woolworth after World War II as a larger and more upmarket department store chain. For our German visitors we have added a commentary in German. English subtitles are also available if enable captions in your HTML5 compatible browser.

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1997: German MBO as the shutters fall in the USA

Emergency surgery fifteen years earlier had failed to save US Woolworth

After a slow death by a thousand cuts, less than 20% of three thousand F.W. Woolworth Co. stores remained in the USA by the time the company pulled the plug in 1997. The Canadian subsidiary had already been dismantled. The chain had largely consolidated into the states of New York, Pennsylvania, Delaware and Hawaii, with a hnadful of others in high-profit, iconic locations like State Street, Chicago. the Flood Building in San Francisco, Canal Street in New Orleans and Hollywood Boulevard in Los Angeles, yet America grieved loss like a much-loved friend, stripping the shelves of every item of merchandise and buying fixtures from soda fountains to small pieces of door furniture, to preserve a tiny bit of the five-and-ten for posterity.A tale of two continents. As F.W. Woolworth Co. pulled the plug on its remaining 500 stores in the USA, British Woolworth, which had been bought out fifteen years earlier, delivered its highest ever profit of £105.7m. New owners had found a new formula, and despite very major cutbacks in the store base and efficiency savings, the patient appeared to have survived surgery and was thriving.After 1982 most leaders made heavy cuts to Woolworth in the US. But a couple preferred to seek a turnaround, trying a hybird Woolworth Express format, new IT, a reshaping in Hawaii, and in 1996 outsider Roger Farrah tested a statewide rebrand in Delaware. In 1997 the CEO admitted defeat. Trial store sales and profit were well up, but returns per dollar invested were only a third of the level achieved by Footlocker. He had concluded that it was time for Woolworth to retire with grace and honour after 118 years.

Farrah hired Morgan Stanley to find a way of allowing the profitable subsidiaries in Germany/Austria and Mexico to stay trading under their present management in financed MBO's which would hold the asset-price low to make the deals attractive to Venture Capital Groups. The VC would get 90% of the equity, with the remaining 10% going to the Companies' Executives as golden handcuffs to oversee the transition with five-year service contracts. The Merchant Bank arranged on line auctions, and duly announced in late September that the chains had been bought out by the management. The larger German chain's angel was Electra Fleming Capital Partners in London which had bid DM950m (€482m or £ 322m in British local currency). Woolworth was the VC's eighth largest investment and one of six continental European retailers it had bought in recent years, which were all different stages of turnaround and relisting in the market.The Company would "do right by its people". They would have time to say good-bye. Where possible a sister brand would take on the premises to save jobs. Everyone else would get enhanced severance, outplacement support and members the chance to draw their pensions early. He would also find a way of helping the German and Mexican Boards to launch buyouts. They were profitable and self-sufficient and could continue. Americans were shocked at losing the iconic " 5 and 10¢". But most observers acknowledged that the exit was handled with kindness and sensitivity.


2007: Acquisition by UK/US Venture Capitalists

2009: caught in the crossfire during the Credit Crunch

Sacrifices made to ensure the survival of the German brand when Woolworth GMBH was bought out of administration in 2009. Top: Woolworth Mini stores had diluted the chain's value proposition, concentrating instead on the convenience of shops in smaller markets. Bottom: The huge L-shaped headquarters in Frankfurt had been specified in earlier, more affluent times when the chain could afford to carry a huge buying and central administration operation to match the structure used by the parent company in the USA.  The replacement in Unna combines Buying, Admin and Supply Chain is a single purpose-built design with plenty of room for expansion, but low overhead costs and very high efficiency, to help the chain to offer superior value for money in its stores.In 1997 the American Woolworth President Roger Farrah arranged for two merchant banks to finance a Management Buy Out of the German Subidiary by its Board, with the bankers getting most of the shares, and the services of the existing Directors secured for a period of five years by generous golden handcuffs which they could cash five years after the split if the company had survived and prospered. With the exception of the Directors who reached the Company's retirement age in the decade after the split, the others remained in post, keeping the same basic stucture, including a huge central administration department in Frankfurt that had matched the structure in the USA, and continuing the move upmarket that had built pace since World War II, opening a series of new, smaller convenience stores called Woolworth-Miniin Germany's smaller towns. Customers were prepared to pay a premium to get access to chain store brands without having to travel to a major shopping centre.

In 2007 Argyle Capital Partners of London made a joint approach with Cerberus Capital of New York to buy F.W. Woolworth GmbH of Germany from the merchant-bank backed MBO that had been running the company for the previous ten years.

In 2007 the Board was approached by a group of Venture Capitalists with a speculative bid to buy the Company and take it private at a price which would reward the existing Directors for their success in establishing the company after the split and would also give the bankers from Electra and Morgan Stanley to see a very good return on their investment. The offer, made jointly by Argyle Capital Partners of London and Cerberus Capital of New York, was accepted in October 2007. The new owners had a thorough plan for streamlining the business, tidying its property porfolio and accelerating the most lucrative elements of its modernisation programme.


The collapse of Lehman Brothers, one of America and the world's largest investmnet banks, had its roots in the a scandal over sub-prime mortgages in North America, but caused shockwaves across the financial markets that stopped banks lending to each other, let alone to companies, entrepreneurs and personal account holders, forcing the governments of the world to introduce new liquidity rules. It led directly to the credit crunch, a sharp recession around the globe.The collapse of Leham Brothers on September 15, 2008 sent shockwaves around the globe. Soon banks stopped lending to each other, let alone to new businesses or existing clients wanting more credit. One of the early casualties was Woolworths in the UK, which became the icon of the credit crunch, The story of its debts and the way it was believed to have hoodwinked its asset-based lenders became a widely quoted cautionary tale of how not to run your business.

It had run out of cash partly because of extravagance but mainly because the credit insurers who provided a niche service to suppliers that is largely unknown outside the retail trade, decided to withdraw cover after hearing stories of how the firm had misled its lenders and the London Stock Exchange. Suddenly instead of getting free credit for around six weeks on the majority of its goods - long enough to sell them and bank the cash - major suppliers started to demand payment upfront, quickly emptying the coffers. Many believe they went on to withdraw cover from the German company just because of its name, without exploring its plans or credit-worthiness at all. Others say that the new owners turn around plan was misconceived in moving so far upmarket.


In either case the owners soon had to seek bankruptcy protection. German law follows the American model, affording a period of protection from creditors to allow a business to reorganise and restructure to save jobs. This gave time for a white knight to emerge with a plan to salvage a sizeable part of the business. The family-owned value retailer Tengelmann offered to save around 150 stores in larger towns and cities and sharpen their value proposition. It would also cut overhead costs by closing the huge and expensive administration office complex in Frankfurt and intially would use its existing Buyers and Suppliers to get back trading again quickly. The new owner was unable to save the recent mini=Woolworth stores or some of the largest, most, expensive buildings. Those stores did not have the footfall to justify the higher operating costs. The revived chain would offer a great value selection of items for the home, fashions for all the family, stationery and seasonables. Once the formula was proven it aimed to expand rapidly to locations in larger towns and cities across Germany and beyond, with an aspiration to grow to over five hundred outlets over time, which would make Woolworth the largest it had ever been in Germany. Despite economic challenges in Germany and the pandemic, the makeover has consistently hit its targets, with the chain's store base, profit and customer traffic growing at a rapid rate while most other retailers have been in decline. In parallel with the openings programme it has established a new company culture, developing its own talent to support the opening programme, along with an ultra-efficient central administration and supply chain hub in Unna, with plenty of room to grow.

February 2024: "here we grow again"

The slogan from 1927 is even more appropriate today

Woolworth Germany supremo Roman Heini, who has led the Company to great success since he was appointed in 2020, piictured outside the store in Alter Dorfweg (Old Village Path) in Bremen, about 7km from the original store in the country which opened 98 years ago.

Woolworth Germany has gone from strength to strength since Roman Heini took the helm in 2020. Today the company has 620 stores in Germany - more than ever before - with around twenty more in Austria and Poland. Today's branches carry around 10,000 lines, over 90% of which are own-brand and made to the Company's own specification. 6,000 of the lines cost €3 or less (£2.67), comprising mainly goods for the home, stationery, clothing basics for all the family and a selection of toys. The Company expects to break through €1 billion sales this year. In January 2024 Heini told Retail Week that the Company had recently acquired the rights to trade across Europe, including the UK and Ireland. He believes the Continent could support up to 5,000 Woolworth outlets in the future, and teased journalists that his pipe dream for the medium to long term is to re-open in the UK, where brand recognition remains exceptionally high. The Woolworths Museum wishes him every success in bringing that dream to reality as soon as he can. We can't wait.