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Where Have All the Educated Consumers Gone?

It’s been a decade since Syms declared bankruptcy, but the business model that the ‘off-price’ clothing retailer brought to the market still endures

by
Jeremy Elias
November 02, 2021
David Goehring/Flickr
David Goehring/Flickr
David Goehring/Flickr
David Goehring/Flickr

A decade ago today, Syms, an off-price clothing retailer with 40 locations across 13 states, filed for bankruptcy. Savvy sartorialists who sifted through Syms’ endless rows of designer suits and cellophane-wrapped dress shirts, while kibitzing with octogenarian tailors in ill-fitting slacks, still grieve for the loss. But the Syms brand, and the general vibe it came to own in its stores and headquarters, left a lasting impact on the retail space—much of which is still seen today.

Seymour Merinsky, later Sy Syms, was the Brooklyn-born son of a collars-and-cuffs salesman from Russia. After graduating from NYU, he had a short stint at a radio station in Cumberland, Maryland, where his daughter Marcy Syms, who would later become the CEO of Syms Corp., recalled, “He covered all sports, all seasons, all the time.” But like many industrious young Jews of the 1950s, he fell back into the shmatta business. In 1959, Sy borrowed money to lease his own store on Cortland Street in Manhattan. He envisioned a new kind of retail model tucked away in the side streets of the Financial District.

“My father never called what he did ‘discount,’” Marcy told me recently. “A discounter marks up a shorter markup to the consumer, but pays the full wholesale price.” Instead, Sy called it “off-price,” which meant he was earning his margin at the purchase price with the vendor. Sy formed close relationships with labels and vendors, and when they were saddled with excess inventory at the end of the season, he showed up with a pipe in his mouth and hard cash. To ensure the labels weren’t devaluing their brand by being seen at an off-price retailer on Cortland Street, Sy kept his word on two important fronts: The labels would be cut out before customers left the store, and brand names would never be featured in Syms’ ads. “Even manufacturers who had a healthy department store business became comfortable having a regular rotation with us,” said Marcy. “At the end of the season they’d give us a call, we’d set an appointment, and we’d do a deal.” Those relationships and transactions would propel the expansion, buying strategy, and most importantly, the marketing of Syms for decades.

In advertising, it’s seldom the high-budget, celebrity-riddled commercials that break into the public’s consciousness. More often, it’s the comical jingle or local car dealer who seems to leave an imprint on viewers. Such was the case with Syms’ legendary local television spots, often starring Sy himself. The first ad aired live in 1974 during the halftime show of a Sunday night Giants game. He wasn’t there to hock schlock with a salesy voiceover and camera pans of Italian menswear. Instead, he looked directly at the camera with the assuredness and delivery of a veteran broadcaster, explained the mechanics of Syms’ business model, and concluded with one of the greatest slogans in retail history: An educated consumer is our best customer. The line was first and foremost a truism; the greatest beneficiaries of a Syms visit were those who knew value and understood that retail was for suckers. As Syms expanded outside the New York market, the slogan set the narrative for nearly every subsequent ad. When they expanded into womenswear, Sy asked Marcy to star in a commercial for the Washington, D.C., area. One particular viewer who seemed to connect with the brand’s message was a local disc jockey named Howard Stern. “He started doing this shtick [on air] about me and his wet dreams,” recalled Marcy. “I didn’t hear about it until a customer said, ‘You have to get Howard Stern to stop talking about his disgusting dreams and Marcy Syms’ garter belts.’” Ultimately, she didn’t find the exposure to be such a bad thing for the company.

The commercials were a brilliant act in educating consumers about Syms’ business model, but until you visited a Syms location, it was impossible to fully understand what “off-price” shopping really was.

The stores were a display of pure utility. It was as if someone handed FEMA a stack of plywood, some black spray paint, and a couple tons of off-price designer clothing, and said, “Build me a discount retail chain in 24 hours.” The company logo and signage, with its maximalist typeface, felt better suited for Brut Deodorant or WD-40. In the store, no resources were wasted on decor or amenities or petty accoutrements that would distract a deal-hunter. The fashion publication Racked once described the Financial District location as “comically depressing: fluorescent lights buzz overhead while hunchbacked, elderly salesmen adjust their toupees and drift listlessly about the racks of clothing.” The description might be apt, but so are the comments below the article, where Syms shoppers recount deals on Joseph Abboud suits and praise the “listless” salespeople as surprisingly knowledgeable.

Random rewards are the most powerful reward mechanism and that’s what [Syms] was able to master.

Van Sullivan, a former business analyst at Syms, explained how the lack of decor was inherently connected to the business model. “[Sy] purposely painted all his store ceilings black so that they looked crappy,” he said. “It’s like, ‘you’re going to walk into this dump, but you’ll walk out with a great deal because you’re smart.’” In its heyday, a savvy shopper might sift through a 50-foot-long row of men’s formalwear with much of it being uninspiring, off-price clothing. However, buried within the lesser-known labels would be a perfectly cut Hugo Boss suit or Brioni dinner jacket. “Random rewards are the most powerful reward mechanism and that’s what [Syms] was able to master,” explained Sullivan. “You’d get these wins, and then you’d go and tell your friends about it.”

In 1983, Sy Syms called his friend Monroe Milstein, who had recently brought his family’s business, Burlington Coat Factory, onto the New York Stock Exchange. Sy wanted to know how the IPO went, and hung up the phone intrigued by the idea of taking some of his chips off the table. In September 1983, Syms went public, and a year later, Marcy became the chief operating officer. Throughout the 1980s and ’90s, the company continued to expand, at one point opening a location at 400 Park Avenue, across from architectural masterpieces like Lever House and the Seagram Building. The epicenter of white-collar prestige was an odd choice for the off-price retailer. It was like hanging a Bob Ross painting in Florence’s Uffizi Gallery, and according to Marcy, it was probably a wrong turn.

But at the company’s corporate headquarters in Secaucus, New Jersey, the off-price ethos still thrived. “We had a break room in the buying office, and everyone had to pay for their own coffee,” recounted Sullivan. “Even Sy would throw a quarter in the coffee can if he wanted a cup.” In 1999, the company brought in consultants from Accenture to help upgrade the software system to be Y2K-compliant. When it became clear that it wouldn’t comply with Syms’ practice of manually buying, assessing, and pricing huge lots of clothing, Sy kicked them off the property. “He literally had them police-escorted out and threw away the whole system,” said Sullivan. “I gained a lot of respect for him personally [after that], because that’s how he did business.”

Ultimately, it wouldn’t be Y2K that killed the chain, but the onslaught of external trends and competitors. First, there was the consumer shift away from labels, where buyers favored cheap fashion from places like The Limited and Benetton over high-end designers. Then there were companies like TJ Maxx and Marshalls, which merged in 1995 and employed Syms’ off-price business model on a mass scale. One of the other potent threats to Syms’ business was the rise of outlet stores, where giant swaths of farmland were turned into idyllic discount shopping experiences where each label, from Coach to Hugo Boss, had its own store. “We started feeling it when the appointments weren’t kept,” said Marcy. “And by the time the appointment was rescheduled, the goods we were meant to bid on were already out the door.” One of Syms’ early transactions was taking in Ralph Lauren’s excess ties from his first deal with Bloomingdale’s. By the late 1990s, Ralph Lauren had multiple tiers of labels, including ones that went direct to discounters, and their own outlet stores for excess inventory. The whipped cream on this steaming pile of shmattas was the introduction of online discounters like Gilt Group and Rue La La.

Marcy, who officially became the CEO in 1998, was responsible for navigating these new realities. However, her decades of experience in retail, and unparalleled knowledge of the Syms organization, was not enough to survive retail’s unrelenting trends. On Nov. 2, 2011, Syms filed for bankruptcy protection.

Syms lives on, though. Not in some metaphysical sense, where the ghosts of listless salesmen haunt the aisles of discount retailers and clearance sections. It lives on in the business models that dominate big discount retailers like the still thriving TJ Maxx or Marshalls, or HomeGoods. It’s Syms’ business model that led to the prevalence of outlet stores from Tilton, New Hampshire, to Riverhead, New York, and helped, for better or worse, introduce the notion of labels licensing out their brand to lower-tier products.

But the interesting question isn’t “Does the Syms model live on?” but rather, “Do the ‘educated consumers’ still exist?” Yes, albeit in completely different spaces. Instead of sifting through long rows of men’s formalwear and women’s shoe departments, they’re in places like The RealReal, looking for secondhand goods from a time when clothes were made with craft. They’re on StockX, bidding on an undervalued pair of Jordans that’ll be five times their current price in six months. And today, part of the consumer awareness that Sy Syms saw as a defining aspect of consumerism goes beyond knowing fabrics and stitching, and into the environmental and labor practices behind them. It’s been a decade since these educated consumers roamed the halls of the fluorescent-lit mecca called Syms, but they still exist in different niche worlds of brick-and-mortar retail and e-commerce.

Jeremy Elias is a Brooklyn-based writer and creative director whose work has appeared in publications such as The New York Times, The Atlantic, Esquire and Vice.

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