Geographic Connection to Pennsylvania: Bald Mountain, Luzerne County
Entrepreneur S.S. Kresge founded the K-Mart chain of retail stores.
Sebastian Spering (SS) Kresge was born on July 31, 1867, in Bald Mountain, Pennsylvania. He was a hard working and frugal businessman. Using money from a job as a salesman, Kresge created his own stores in Detroit and Memphis. These two stores turned into a highly successful chain of stores, which still exist today as "K-Mart." K-Mart made Kresge rich, but he did not hoard all of his money for himself. He was a philanthropist, giving his money away and setting up the Kresge Foundation. He died on October 18, 1966.
Sebastian Spering (S.S.) Kresge was born on July 31, 1867, to Sebastian and Catherine Kunkle Kresge in Bald Mountain, Pennsylvania. The son of Swiss farmers who immigrated to America, Kresge learned to be frugal with his money early in life. It was this frugality that would later lead to his success in business.
Kresge's miserliness began at a young age, as did his love for business. As a child, he attended rural schools. As he grew older, he moved on to the Fairview Academy in Brodheadsville, Pennsylvania. Upon graduation from the Fairview Academy, Kresge struck up a deal with his father. The two agreed that Kresge's father would finance Kresge's foray into business school, so long as Kresge would give his father all of his earnings until he was 21. The deal allowed Kresge to attend Eastman Business College in Poughkeepsie, New York. Meanwhile, back home, his father received the $22 a month Kresge earned as a teacher in the Gowers School in Monroe County, Pennsylvania, as well as the money he earned as a clerk at a store in Scranton. Kresge also worked as a bee-keeper at the time, though his father allowed him to keep that money. Kresge would later remark that the bees encouraged him to believe in the value of hard work.
It was this hard-work that would offer Kresge his first big break. While working in a hardware store in Scranton in 1889, Kresge observed that the store allowed customers to pay using credit, instead of cash. He noticed that customers were buying more than they needed, because they could pay with credit. He also saw that the store was falling behind on its payments, because the customers consistently fell behind on theirs. He would remember this years later when he started his own stores. While still working at the shop, Kresge also observed the usefulness of cleaning, polishing, and maintaining the upkeep of the store during slow periods in the day. When there were no customers, Kresge, rather than just sitting around, opted to perform odd-jobs around the store. This impressed his manager so much that he earned a job as a traveling salesman for the company, W.B. Bertels Sons and Co. of Wilkes Barre, Pennsylvania, selling tin ware and hardware in New England and other northern states.
In 1897, after several years of work as a traveling salesman, Kresge had saved up $8,000, a good deal of money at the time. Observing the success of Frank Woolworth's five and ten cent stores, Kresge partnered with a man named John McCrory, to open a pair of five and ten cent stores in Memphis and Detroit. Kresge managed the store in Detroit and would buy-out McCrory in 1899. The store was a success. Everything was sold for a nickel or a dime, hence the five and ten cent store. People enjoyed the store's quality products sold at affordable prices. Kresge remembered the lesson he learned working as a clerk though, and would absolutely not allow customers to pay with credit.
By 1912, the stores had become so successful that Kresge owned 85 stores throughout the United States. The stores had annual sales of more than $10 million. Kresge meanwhile maintained an avid interest in his stores. He watched over them carefully, and during the years he was president of the company, from 1907 to 1925, he made sure he knew the name of the managers of every one of his stores. Additionally, in order to instill a sense of family values, and because of his great love of her, Kresge had a picture of his mother in the front window of every one of his stores until her death in 1940.
Following World War I, and with a rapid increase in inflation, and decrease in the value of the dollar, the stores could no longer sell things for mere nickels and dimes. They increased their prices, to 25 cents to one dollar. Nevertheless the stores remained successful, and Kresge continued to get rich. These stores, owned by Kresge's company, the Kresge Corporation, continued to expand across the country. They began selling products for more money, and began selling a greater variety of items. Kresge's stores are still in existence today. They are called K-Marts.
Kresge's personal life is more tragic than his business life, in which he was a constant success. Kresge was married three times. His first two marriages, to Anna Harvey from 1897 to 1924 and to Doris Mercer from 1924 to 1928, ended in divorce. Both women claimed that Kresge's penny-pinching was one of the major contributors to the divorces. In October 1928, Kresge married Clara Swaine, with whom he remained until his death on the eighteenth of October 1966.
Kresge was renowned for his stinginess. He was said to wear cheap suits until they fell apart. It was also said of him that he would put paper in his shoes when the soles wore out. He told stories of how after his friends convinced him to play golf, he gave it up because he could not afford to pay for all the balls he lost, even though, with his wealth, he could clearly afford it. Near the end of his life Kresge remarked on his success in business. He said: "I think I was successful because I saved and because I heeded good advice. I worked- and I didn't work only eight hours a day, but sometimes 18 hours. When one starts at the bottom and learns to scrape, then everything becomes easy."
Despite his thriftiness, Kresge knew how to give his money away as well. He was known as a great philanthropist. He was one of the first managers to offer his employees paid sick leave, profit-sharing bonuses, pensions, and paid holidays. In addition to all that Kresge gave away $65 million, and set up the Kresge Foundation, in order "to help human progress through benefactions of whatever name or nature." He believed in benefiting the good of humanity, and would in the end, despite the tightfistedness claimed by his wives, friends and associates be known for giving money away.
It is true that Kresge may have been a parsimonious fellow, but perhaps he played the part of the Ebenezer Scrooge we see at the end of Dickens' classic tale. He was a man who was known as a giving boss and man. He did not spend his money on himself, but he gave it away. Perhaps, this was how the cold, calculating and frugal man made his penance. Regardless, we still see the affects of his philanthropy today through the Kresge Foundation.