History of New York’s John’s Bargain Stores

John's Bargain Stores

There are quite a few generations of New Yorkers who miss John’s Bargain Stores. The chain didn’t have to compete with the more upscale franchises that cluttered shopping areas in the 1950’s and 1960’s. John’s offered a wide selection of contemporary and diverse product lines. Even though the company has been extinct for about fifty years, there are still people who remember them fondly.

John’s Bargain Store was founded in 1927. The franchise rose to prominence under the leadership of David Cohen. Cohen was born in New York in 1921. His father Harry operated several chance games on the Rockaway Beach Boardwalk and initially sold various products from the back of his horse-drawn wagon. Harry opened a portable store during the winter months where he sold products that were overstock items from local retailers.

Harry Cohen eventually opened his first store in the South Ozone Park neighborhood of Queens. The store was named John’s after no one in particular. No one in the immediate family nor any close friends were named John. Residents soon referred to the store as Cheap John’s, because there were comparable franchises with similar names such as Cheap Sam’s, Cheap Charlie’s and others in the area.

David worked in the store when his school schedule would permit. He would drop out of school when he was in sixth grade to devote his efforts to the business full time. David and his brothers and sisters gradually began to grow and expand the company. They took their father’s concept and ran with it, adding more locations in the Northeast and also expanding into the Midwestern United States.

Many John’s Bargain Store outlets were located in lower income areas. The working class people who lived there were able to buy items and still have more than enough money left over to pay for the necessities in life. David was known for his superior bargaining skills, which helped the company add locations in former supermarkets, retail stores and other vacated buildings.

Building owners and landlords were willing to negotiate with John’s because it often meant less competition for groceries and other product niches. They sought out retail space in areas that most other companies of their size and stature often ignored or never even took into consideration. One of the company’s directives was to establish stores in areas where more used baby strollers could be seen than new cars. Several of their stores were in close proximity to rail and bus lines.

Harry Cohen passed away in 1963. The business continued growing during the 1960’s. Their success enabled them to ask for new products and pay for items purchased in bulk at rates that were much lower than many of their competitors. During their peak, John’s Bargain Stores were able to order as many as a quarter million units of a particular product at a time. They focused on buying surplus items from manufacturers, many of which were more than willing to unload their excess inventories for a discount. John’s also purchased many second-hand or imperfect items. “Give us your mistakes and we’ll make them pay” was a John’s Bargain Stores slogan for many years.

John’s was known for their low markups. They only marked up products by as much as 32 percent, which severely undercut many of their competitors. They were also known for purchasing and selling items out of season. It wasn’t unusual to stop by a John’s Bargain Store and find swimwear on the shelves in winter or Christmas merchandise during the dog days of summer.

Product deliveries were accepted at warehouses. This meant that distributors didn’t have to drop off items at each store, which saved merchandisers and John’s significant amounts of money. John’s also used newspaper advertisements that covered many regional locations at a time, so that they were paying less per store on advertising.

The company had 527 retail locations spread across the United States and Puerto Rico in the mid-1960’s. David Cohen’s vision was to have more John’s locations than Woolworth’s stores in the United States. John’s earned at least $1 million in revenue or more every year from 1961 to 1965. One primary drawback to their store locations was that many of them were easy targets for shoplifters. John’s incurred a loss of more than $520,000 in 1966, primarily due to shoplifting.

Things took a turn for the worse when David was injured in an automobile accident in 1966. The CEO of John’s Bargain Stores would not return to work for a year. During his absence, shoplifting losses continued to increase and the organization expanded beyond its means. John’s filed for bankruptcy protection in September 1967, which is not surprising since 200 of their locations were operating at a loss at the time.

David Cohen bought the local brokerage firm Sprayregen and Company for a reported $15 million. Merchandisers soon decided to stop supplying John’s Bargain Stores with inventory. Many of them were concerned how this purchase would impact the liquidity of the organization.

John’s was a family-owned and operated company until they were acquired by private investors. The business was renamed Stratton Group Limited. Gerald Sprayregen was later indicted on eleven counts of taking more than $2 million from the company for his own personal use. Along with VP of Operations Walter Spengler and comptroller Jose Umana, Sprayregen was accused of doctoring financial records so that their losses were reported at much lower numbers than what they actually were. This was the beginning of the end for John’s Bargain Stores. Things got worse as their revenue declined and losses continued to grow. All of their stores were either closed or sold by the early 1970’s.

David Cohen passed away in 2002 from lung cancer, but his legacy still lives on today. John’s Bargain Stores’ discount model was what other larger retailers such as Target, Ben Franklin and Wal-Mart based their initial marketing strategies on. Their low pricing models and selling out of season products are tactics that other companies have also implemented with varying degrees of success. Shoppers never really knew what to expect. They could enter a store one day and see completely different items for sale a few days later. Their ever-changing product inventories and low prices kept customers coming back for more. John’s Bargain Stores were a one of a kind concept that has been imitated but has never been quite duplicated so far.

 

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