Bernard Sakowitz

Duration: 1hr 7mins
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Interview with: Bernard Sakowitz
Interviewed by:
Date: April 21, 1977
Archive Number: OH 217

I: 00:09 April 21, 1977, Interview with Mr. Bernard Sakowitz.

I: Mr. Sakowitz let me begin by first thanking you for giving us the time to talk to you today. I’d like to begin the interview by filling in a few gaps in your family history. I researched as much as I could into your background before the interview, and one of the interesting questions—that I found unanswered—concerns your grandfather, Louis. I noted that he established a business in Galveston in 1900, but other than the fact that he originated from Russia, there is very little else about him. I was wondering if you might fill in some of the gaps there as to what business he engaged in when he first arrived in the United States, and what business he was involved in in Russia?

BS: I was very small, and I knew him at that time. In fact, we lived in the same house for many years. Louis and his wife, whose name was Leah, and my dad and my mother, whose name was Matilda. The home was on Church Street in Galveston, and it wasn’t too far from the store that both my grandfather had, and later my father had. In fact, they used to walk from their home to the store. I came along in 1907 and had my early education in Galveston schools. Galveston in those days was destined to be the big port of the Gulf of Mexico. When it was hit with the 1900 storm, it had severe property damage, and severe damage of—well, loss of life—material damage. It was 1915—which is a storm in Galveston that is still being talked about and is one I went through and remember—hit the city to such a point that it was never able to recover from that 1915 storm. There were no investors that were willing to go back into the market there. It was also in 1915 that the Houston ship channel was opened as a result of an effort of our Houston Chamber of Commerce.

The Houston Chamber of Commerce had a delegation that went to England. I don’t remember how many men were involved in that trip, but it was a business—economic trip to England. They went to Manchester which is a big industrial city in England. Manchester was a manmade port, and when they were shown how Manchester was made a port by man, and they came back to Houston and said, “Well, why can’t we build our little Buffalo Bayou and dig it out and make Houston a manmade port?” It materialized. They were great thinkers, and they were great movers of ideas that were in our chamber in those days. Today we are—well, we’re second or third largest tonnage port in the United States as a result of that little canal.

I: (03:59)The business that your grandfather started in Galveston, what did it involve besides his—?

BS: As near as I can remember, he was a vintner in Europe. I don’t know too much about his European background. He was a big man, and he wore a big beard—I remember that beard—and he was a very gentle man with children. I remember that because I always wanted to be with him. There was a big exodus of Russian Jewry back in those years, and we say his store was in existence in 1900. I think it was before 1900 because 1900 was the storm.

I: That’s when it was destroyed, yeah.

BS: Yeah. I think what they were trying to get away from in Russia in those days was military conscription as I remember the stories, and he came over here with part of his family and with the first group that came over, I don’t think my dad was with them. I think my dad came over subsequently. He opened a store in the wharf district of Galveston which is where all the boats were docked, and he built his business around like a ship service store would be—blue jeans, work shirts—the kind of thing that would appeal to men who worked on these big boats that were bringing in so much freight from all over the world into Galveston. Galveston was also exporting terrific amounts of cotton back in those days. It used to be a very big crop in Texas in those days. The 1915 storm changed all of that.

My grandfather had three sons and a daughter. The daughter married a man by the name of Nathan, and I don’t know how long you’ve been in Houston but for a while there was a Nathans store here, and that was her husband. My father’s oldest brother—there were three brothers as I’ve mentioned before—was a man by the name of Sam Sakowitz, and Sam being the oldest was in the business with his father, Louis. That store was called Louis Sakowitz and Son. The store wasn’t actually big enough to support the other two boys, so the other two boys had to go to work elsewhere. My dad went to work for a company in Galveston called Herschel Cohen (?? 07:30)—I think it was—that was an apparel store and more of a better quality unit than Louis Sakowitz and Son was. It was immediately after the 1900 storm that my father and his younger brother by two years, whose name was Simon, decided to open a store in Galveston of their own, and they were going to appeal to nothing but the Galveston carriage trade. They wanted nothing but the better men’s apparel business. They opened on Uptown Market Street—I thought I could remember the number, but I don’t remember the number of that store—it was a small unit, and they called that Sakowitz Brothers. Now, that means in Galveston around the turn of the century, there were two Sakowitz stores, one called Louis Sakowitz and Son, and another one called the Sakowitz Brothers. They were completely on the opposite end of the economic scale to each other. When the two Sakowitz brothers who were young men in those days—I’d guess my dad must have been less than 20, and my uncle was two years younger; these are the two gentlemen right here—they were the founders of this corporation that we still operate under today. That’s the old Sakowitz Brothers store.

It was the storms in Galveston and the opening of the ship channel in Houston that made many Galvestonian investors and the banks and everybody realize that Houston was going to be the upcoming community, not Galveston. So, then it was important that we move where the public was going to be, and they became very interested in Houston. My uncle made a trip to Houston, found a store located on ninth street operating under the name of Emil Lipper (?? 10:12)—not in existence today. The Emil Lipper store became available, and they had arranged with a big bank in Galveston known as the Rosenberg Bank to lend them the necessary funds to buy out that Emil Lipper store and have a store in Houston. My uncle Simon being the younger of the two moved to Houston and managed the store in Houston that was formerly known as Emil Lipper. The name was changed to Sakowitz Brothers.

I: (11:03) Did they both handle the same type of merchandise?

BS: Yeah, at that time they did because they were—well, I think they even upgraded the Emil Lipper store to the standard that they were using in Galveston because my father still bought all the merchandise. He made trips to New York and so on for it—the merchandise.

The store grew as the city was growing very rapidly, and they found that they needed more space. In those days, Foley’s was way downtown, and there was another big store here by the name of Levy’s in those days—Levy Brothers—and this store was right across the street from the big Levy Brothers department store which was a quality department store. There was a store on the corner of Preston and Main which was the same block that they were in—they were in the middle of the block between Preston and Congress which was really the center of the city in those days—by the name of Ed Kiem (?? 12:07), and this was a big store. The building is still standing, and I think it’s occupied by a shoe store today. It’s right on the corner of Preston and Main on the northwest corner. That store became available because Mr. Kiem was getting old and wasn’t well. Mr. Kiem had a son who wasn’t interested in his business at all. In fact, he went to California and became very successful in the movie business, changed his name to Omar Kiem (?? 12:48), and Omar Kiem is the old man Ed Kiem’s son who we knew as a youngster, but he was very successful in California in the movie business, and I think you will even remember that name back in the early days of the movies. Mr. Kiem went to New York on one of his trips and became very sick there, decided he was going to sell the business and called my dad. He said, “Tobe, I know you’ve been looking at our corner. If you want it, you can have it. I am just not well enough to continue this business, and my son is in California, and he isn’t interested in it at all.” So, they had made arrangements with the banks again, and my dad and my uncle had a meeting between the two of them and they decided that they would close the Galveston store, take the Ed Kiem building and store which was almost triple from what they had. My dad always used to tell me that was the largest economic project that he had ever experienced taking himself—the debt that was involved, the obligations that were involved—it was just a hell of a big move for him. So, they decided to close the Galveston store and both the brothers would come up here and operate the Houston Sakowitz Brothers store. I’m trying to think of what year this was. This must have been right after—well, that store in Houston opened, I think, in 1902. Do any of your records show that?

I: Yes, I believe your uncle Simon came to Houston in 1910, and then your father joined him after the 1915 storm. That’s when they consolidated.

BS: (14:51) I think the Ed Kiem—well, the Ed Kiem thing might have been around that same period, around 1908, 1907 because I think when they bought the Ed Kiem business, I had already been born, but I was born in Galveston.

The town was growing very rapidly back in those early years—and some of your investigation on Houston’s growth will also show you what I’m talking about—to the degree that Houston was moving so rapidly. Ross Sterling became our governor, and subsequently, he was in a big hassle in trying to establish Houston the way he wanted it to go, and his opposition was Jesse Jones. Jesse Jones was anxious to move Houston south on Main Street, and Ross Sterling was interested in making Texas Avenue the main street of the town. His argument was that if we went north on Main Street, we would hit the bayou, and that would stop the progress of the growth. Whereas if we could get on Texas Avenue, the street could be as long as the city could afford to build it. Rice Hotel came along about that time, and it looked like Main and Texas was really going to be the corner. So being alert to these real estate moves, Simon and Tobe decided that they would have to move closer to that Main and Texas corner. So, they bought a piece of property on Prairie and Main—I guess that’s it there. Before they had an opportunity to use it, the town had grown faster than they had anticipated coming south, and it was already established by then that Main and Texas was not going to be the hub—that it was going to jump over Texas and go the way Mr. Jones was trying to get it to go.

So back in those days, we had a university here called the Rice Institute—it’s now Rice University. Rice Institute owned a piece of property on Walker and Main which is known as the West Building. It’s a quarter of a block. My dad knew one of the trustees—I can’t remember the name of the trustee at Rice in those days who was handling a lot of that real estate—anyhow, he called this trustee and asked him if that property was available for sale, and before they were through they traded, and they made a deal. He bought that property from Rice University which is Main and Walker.

(18:08) Now, we come along 1926, 1927.

I: Let me just ask you this: How well acquainted was your father with Jesse Jones in these early years?

BS: That’s my next story.

I: Okay, good.

BS: That was an awfully sick block in Houston, and I’m talking about Rusk down a block. Rusk had a theater in the middle of the block called Zoe Theater, and I used to go to that theater all the time—movie house. It was a decrepit-looking block. Anyhow, Jessie Jones comes along, and he’s going to put up a big building. The building today is known as the Gulf Building. It’s on Rusk and Main. He calls my dad—back in those days he used to be the secretary of commerce, so he spent some time in Houston and much of his time in Washington—by then he had owned the Rice Hotel, and he’d owned the Texas State Hotel. He had owned several hotels and he even owned hotels in other cities in the state, including a hotel in New York. Anyway, he decides he’s going to put up this big 35-story building on Rusk and Main, and he called my dad and he said, “Tobe, I want to talk to you. I understand y’all are going to move out of Prairie and Main, and you’re going to move south on Main Street on Walker and Main. How big a store you going to build?” My dad said, “I don’t know. We haven’t—we just bought the property, but it will probably be five floors.” He said, “How would you like to put those five floors in a 35-storey building?” He said, “Well, what are you talking about?” He said, “I’m going to build a 35-story building on Rusk and Main, and it’ll be the center of this city.” Well, before they were through trading my dad signed a lease for that store. That store opened in 1929 just before the crash.

It was a beautiful store—beautiful I mean by design—so beautiful that even the articles in the newspapers back in those days said it looked like a bank. It was so beautiful; it didn’t look like a store. People would be afraid to go into it because they would think that the merchandise would be too expensive to support an institution that looked like that. Then here comes the crash, and I never shall forget my dad telling me—this is back in ’29 because that was the year I came out of college—that when we opened that store—and it was fixtured and the merchandise was in it—we didn’t owe a dime. It was that financial condition that he had operated the business that kept us surviving during the most critical days of the depression. Frankly, I think if we had to do it again today, we probably wouldn’t have made it, but he was a great financier, and I constantly respect many of the things he did back in those early periods, and I hope I can do as well.

I: I’d like to—

BS: Anyway, we progressed to the degree that we took Mr. Jesse Jones’ deal, and the interesting thing about that deal—Mr. Jones was the kind of man who was great with money, and when he was working for the RFC and department of commerce, and he used to come to Houston I remember him walking in and say—he always used to buy socks and his underwear in the store. He was such a big man that we had problems fitting him in suits. He had them all custom made—huge guy, had to dip to get under that door. I said, “Mr. Jones, when you look at these great big numbers, how do you comprehend millions, billions?” He said, “Bernard, it’s very simple. I just take my finger and put it over the first six zeros, and then it’s simple arithmetic.” I shall never forget him saying that. So, that’s how he comprehended his figures.

(23:15) The building was built, and then the building didn’t have a name. Mr. Jones came down to Tobe again, and he said, “Tobe, how would you like to call this the Sakowitz Building?” He said, “Oh, that would be fantastic.” He said, “Oh that would be alright, but it is going to cost you some money.” So, dad said, “Well how much money you talking about?” I don’t even remember the figure, but dad said, “No, we can’t. We don’t have that kind of money that we can spend for that purpose.” He said, “Well, I’m going to offer it to the Gulf Company.” They were a major tenant in his building which he did, and the Gulf Company bought it. That’s why it’s called the Gulf Building today because they were a major tenant—as we were—but that’s why the building is set back. If you look at the building today, it goes up five floors and then sets back. Those first five floors were our floors. Now you ask me some questions.

I: Well, I’d like to pick up with your involvement in the business. I suppose 1929 is a good jump off point. You had gone to the Wharton School of Finance at University of Pennsylvania.

BS: I have a brother, and of course, my dad was very anxious for both of us to come in and help him out in his business. My brother, also, was sent to the Wharton School because he thought that that economic training would be the best thing that he could give either one of his sons. I shall never forget, we went up to him my brother’s graduation which was some two or three years after mine—’31 I think it might have been—and we were sitting in my dad’s hotel room at the time, and my brother, whose name is Alexander, said, “Dad, I just don’t think I would like to go into retailing. I would like to continue my education.” This is in June, and we’re in Philadelphia. Dad says, “Fine, whatever you want to do. Where do you want to go to school?” He said, “I would like to go to either Oxford or Cambridge.” Back in those years, those two great English Institutions had quotas for American students. Only a certain number of American students could get in then. So, he sends a cable to Cambridge, and Cambridge quota for American students was filled. So, he talked to his advisor at the University of Pennsylvania which is the home of the Wharton School, and his advisor said, “Well, if you’re really definitely decided you would like to go to Cambridge, I’ll tell you how you can get in there.” Because he was getting a degree in BS in economics, and really, the Cambridge program required an AB degree—and it’s the economics degree that I completed out of the one school also—so he said, “I’ll tell you how to get into Cambridge. I want you to go to England, establish a residence in London, and register in at the University of London— which is like CCNY in New York—and after you’re in the University of London for three or four months, ask for a transfer. You are then an English student.” That’s what he did, and he went to Cambridge, and he graduated from Cambridge.

Then he decided he wanted to teach. We asked him, “What do you want to teach?” He said, “I want to teach English literature.” He said, “Well, if you want to teach, you’d better get your doctorate because competition for teachers is going to be such in the years ahead, you’d better have a doctorate.” So, he asked his advisor. He said, “Well, what is the most difficult doctorate of English literature you can get in the United States.” He said it was the Harvard degree. The Harvard degree—the doctorate degree of Harvard in English literature is the most difficult. So, he applied to Harvard, and that’s where he went. He completed his PhD from Harvard and has been teaching ever since he finished at Harvard. He’s a senior professor in the Department of English now at the University of Texas in Austin, has great seniority there and has never been interested in our company. In fact, it hasn’t been too many years ago that I bought the interest out that my father had left him. We bought his interest.

I: (28:37)After you graduated didn’t you work for a time at Macy’s in New York?

BS: I worked in Macy’s for almost a year. The reason why I worked in Macy’s—in those days the colleges, they wanted young—college executives used to go to the college campuses and interview these seniors and gave them certain written exams. If they came out the way they wanted them to on their exams, well these big companies would employ them. General Electric was on that list. There were a whole lot of them. In fact, when they came to the campus, there was a notice put on a bulletin board that all the students could see that RH Macy Company of New York was interviewing students interested in retailing. I saw that notice, and I went down there and took their interview and their little test and got the job. They knew that my father was in retailing in Houston, but I managed to get the job up there anyway.

They had what they called an executive training program. It involved working with some of the executives that were in the position, and they moved you all over the store and tried to expose you to all the problems that could arise if you were holding these different positions yourself. It was good training, and I think I got a lot out of it.

I: Were there any particular lessons you learned there which you applied in your own business when you returned to Houston?

BS: Yes, mostly in systems.

I: Such as?

BS: How to take an inventory, how to calculate an inventory, how to evaluate an inventory—these were all things that came out of the Macy’s training. How to age an inventory—which becomes a very complicated thing in retailing because you run into millions of items in a store. How do you track them? It becomes a real engineering problem, really.

I: Now, when you returned to the business here, you began a new line of—

BS: Well as I told you, I came out of Macy’s in—well, in ’29 I came out of college, and in ’30 I was free from Macy’s. So, we had just moved into the Gulf Building, and in moving to the Gulf Building, we expanded our business considerably which was formally strictly a men’s and boy’s business. We now have expanded into a women’s area and to a girls’ area. So now, we have girl’s and boy’s, men’s and women’s. Neither my uncle nor my dad knew anything about the women’s business, and neither did I, but I knew a little bit more about it than they did because I had been exposed to some of it at Macy’s. So, it was that women’s division that I took hold of in those early years, and as the business learned, I learned because we were learning together.

I: Excuse me just a moment; I want to turn the tape over.