FedMart

FedMart

File:FedMart Discount Store Logo.png
Company type	Discount store
Industry	Retail
Founded	1954 (1954) in San Diego
Founder	Sol Price
Defunct	Template:End date and age
Fate	Liquidation; numerous outlets rebranded as Target
Headquarters	San Diego, California
Number of locations	70 (1979) 46 (1982)
Area served	California Arizona New Mexico Texas
Products	apparel, footwear, housewares, sports equipment, hardware, toys, electronics, groceries

FedMart was a discount department store chain launched by Sol Price, who later established Price Club. Initially operating as a membership-based discount store serving government employees who paid a $2 family membership fee, FedMart's first-year revenue quadrupled expectations. Over two decades, the chain expanded to 45 locations primarily across California and the Southwest, generating annual sales exceeding $300 million. The company extended its footprint into multiple Southwestern states. In 1975, Price sold a majority stake—two-thirds—of FedMart to the German retail conglomerate Hugo Mann and was subsequently removed from his leadership role the next year. The chain ceased operations in 1982.

File:FedMart, San Antonio, Texas 1979.jpg

FedMart outlet in San Antonio, Texas, 1979

File:1964 FedMart Notepad.jpg

FedMart notepad from 1964

History

“We noticed Bertrand was clearing out most of the watches in Los Angeles.” The Los Angeles location was FEDCO, a novel retail concept at that time. Operating from a modest site near Slauson Avenue adjacent to pastureland, FEDCO offered significant discounts exclusively to federal employees—discounts made feasible because it functioned as a nonprofit cooperative serving civilian federal workers. “We discovered there were 5,000 federal employees in San Diego,” Weiss recalls, “and they all traveled weekly to Los Angeles for shopping. So we asked ourselves why not establish one here?”</ref>

Sol Price started his professional journey in the mid-1950s as a lawyer in San Diego. His clientele included wholesalers specializing in jewelry who supplied watches to FEDCO, a nonprofit member-owned retailer based in Los Angeles. Upon visiting FEDCO, Price observed its warehouse-style setup resembled a property he had inherited. He proposed to his clients that his mother-in-law’s building at 2380 Main St.</ref> could serve a similar role.</ref> With client approval, this marked FedMart’s inception.

Founded in 1954,</ref> the enterprise began with an initial investment of $50,000 ($Template:Format price adjusted for inflation).</ref> Price enlisted eight investors contributing $5,000 each and persuaded his law firm to invest $10,000 more. Inventory originated from clients including two jewelry wholesalers; another client supplied furniture pieces; and a third provided liquor products—resulting in an eclectic merchandise assortment of jewelry, furniture, and alcohol. Membership was offered to government workers at all levels—federal, state, and local. Despite the limited product range initially available, FedMart achieved remarkable success with revenues reaching $4.5 million in its first year—quadruple the projections set by Price and his backers.</ref>

FedMart opened its doors as a membership-based store inside a repurposed warehouse in San Diego in 1954.</ref> Expansion followed swiftly with a second location launching in Phoenix, Arizona in 1955 and shortly thereafter a third store in San Antonio, Texas. In 1958 another outlet opened in Kearny Mesa near San Diego followed by additional stores throughout Southern California. During the 1960s the company eliminated membership requirements and transitioned into a conventional discount retailer.</ref> By October 1968, FedMart had inaugurated its 36th location in Window Rock, Arizona. By 1975 the chain operated 44 stores across California, Arizona, New Mexico, and Texas.</ref>

The chain’s success encouraged the launch of other warehouse-style outlets alongside refining its merchandising approach. Under Price’s leadership FedMart introduced several retail innovations: it became the first retailer to offer gasoline at wholesale rates; pioneered the inclusion of an in-store pharmacy; and established optical departments within stores—a format later widely adopted by competitors. Beyond these industry firsts, Price expanded FedMart into food retailing—a product category that became central to the chain's growth.

Price's son Robert joined the enterprise as executive vice president until they divested two-thirds ownership to German retailer Hugo Mann in 1975. At that point FedMart was 21 years old with sales surpassing $350 million across 40 stores. Less than one year after Mann’s acquisition of control, Price was dismissed from management. The chain shuttered within seven years.</ref>

In 1969 FedMart became publicly traded on the American Stock Exchange. Starting in 1975 Hugo Mann began acquiring shares and gained controlling interest by spring of that year; ownership increased to 68% by fall.</ref> By 1981 Mann acquired all outstanding shares and took FedMart private.</ref>

Following control acquisition Mann invested capital for rapid expansion including constructing new stores. In addition to new builds FedMart leased a former White Front store in 1974,</ref> acquired Vornado Realty Trust's West Coast division of Two Guys consisting of 22 stores in California during 1977,</ref> and purchased Walgreens’ ten-store Globe Store chain operating in Arizona and Texas in 1978.</ref> By 1979 FedMart operated roughly seventy locations.</ref>

In 1979 controversy arose when FedMart’s German president objected upon discovering Nazi Germany-related books being sold at U.S. stores. He promptly prohibited sales of all politically sensitive literature including titles concerning figures such as Jimmy Carter, Richard Nixon, and the Democratic Party.</ref>

Entering the early 1980s FedMart experienced financial losses prompting closures primarily outside California. When Hugo Mann decided to terminate operations in 1982 only forty-six stores remained; he then leased these properties to other retailers.</ref> Certain outlets—including those located at Calexico, California, Yuma, Arizona, Window Rock, and Tucson—were acquired by former executives who operated them until approximately 1994 or earlier while rebranding as Sunbelt Realty.</ref> Thirty-five locations were leased to Target,</ref> with remaining sites leased to Ralphs Grocery Stores.</ref> This closure facilitated Target's entry into Southern California’s competitive retail market.

James Sinegal, founder and former CEO of Costco, began his career at FedMart working as a bagger before ascending to executive vice president.</ref> Additionally, Sam Walton, founder of Walmart, drew inspiration for his store’s naming from FedMart.</ref>

External links

• Corporate Profile