New York Department Stores

New York Department Stores

Company type	Private
Industry	Retail
Founded	1931 in Caguas, Puerto Rico
Founder	Salomón Kogan, Roberto Kogan
Headquarters	San Juan , Puerto Rico
Area served	Puerto Rico
Products	Department store goods, ladies' apparel, health food products (after acquisition)
Number of employees	700 (1983)

New York Department Stores was a retail chain of department stores that operated throughout Puerto Rico.

Beginnings

During the 1930s, Puerto Rico's retail landscape was dominated by small-scale merchants, as the island had yet to embark on industrial development. Consumers typically shopped at modest establishments known as "Five and Dime" stores, which eventually faded away because rising prices made it impossible to sell goods for just five or ten cents. Salomón Kogan arrived on the island seeking new opportunities, bringing with him $1,000 in capital. His plan was to establish a women's apparel store, choosing Caguas as their starting point. Shortly after, his younger brother Roberto Kogan joined him, and together they launched the enterprise.

Salomón Kogan came to Puerto Rico from New York City in 1931. Later, his sister Rosita, who lived in New York with her husband Gregorio Kaufman and their three children, also relocated to the island. Originally from Russia, the Kogans had previously spent nine years in Cuba before moving to New York City, where they experienced language barriers prior to settling in Puerto Rico. Locals referred to their establishment as "the shop of the Jews," reflecting the novelty of their religion in an area with virtually no Jewish community at that time. Their inventory included ladies' suits imported from New York City priced at $1.00 and $1.95. Within a year of opening, they hired two sisters to manage the store while they scouted other locations for expansion across the island. The next outlet launched in Guayama. Buoyed by success in Caguas, they reinvested profits and opened another store in Ponce, which underperformed and was subsequently relocated to Yauco. The initial store bore the name New York Dress Company before expanding into Old San Juan. Notably, Doña Felisa Rincón de Gautier, then mayor of San Juan, operated a small women's dress shop adjacent to their location.

By 1936, further reinvestment led to the opening of Broadway Department Stores in San Juan. Soon after, within the same district, the Manhattan Department Stores were established.

In 1940, the Kogans acquired a lot with two old houses from Mr. Manuel Mato Santos at stop 16 of Santurce, where they constructed a more modern and comprehensive retail space compared to previous stores. According to Kogan, this marked Puerto Rico's first true department store. It featured air conditioning—a rarity at the time shared only by Kleins store in Old San Juan—and introduced novel business hours locally when it opened on May 7, 1941. Traditionally, shops closed at noon and reopened at 2:00 pm; smaller businesses often stayed open until shortly after 10:00 pm due to cinema patrons shopping afterward. There were no regulations governing employee working hours then; employers frequently required late-night shifts. The Kogans broke this norm by limiting work hours, setting an example soon followed by other retailers attracted by their growing customer base. Another innovation was allowing customers to select merchandise themselves rather than relying on clerks behind counters to complete sales.

The onset of World War II in 1942 prompted Kleins' owners—an esteemed clothing retailer in San Juan—to exit Puerto Rico. The Kogans purchased Kleins' premises and merged their three San Juan stores into one entity named New York Department Stores. Their product range expanded beyond ladies' suits as well. Subsequently, they opened an additional branch in Río Piedras. Many assumed New York Department Stores was an American company; however, Roberto Kogan explained that the English name was chosen because New York was then regarded as a fashion capital and evoked a positive association with products from the United States.

On April 1, 1947, a new New York Department Stores location debuted at stop 17 of Santurce, designed by architect Henry Klumb. Later that year on July 1, the island saw its first credit cooperative established within these stores for employees’ benefit—only the second such organization on Puerto Rican soil.

Expansion: 1960s–1980s

On February 25, 1960, a new location was inaugurated at the “Bayamón Center” shopping complex in Bayamón. This store introduced Puerto Rico’s first escalators and was thoughtfully designed to maximize customer comfort. The specially crafted shelving units expanded the display space while facilitating easy product selection for shoppers. These shelves were painted in vibrant hues of green, blue, yellow, and coral, creating an inviting atmosphere. A distinctive feature included one of the rear walls constructed from exotic wood imported from the Orient. The wood’s fine texture and natural coloration formed a unique design that was impossible to replicate manually. The renowned interior decorator Morris Ketchum Jr. from New York City was commissioned to create the store’s window displays and color palette, reflecting the management’s desire to provide Puerto Rican customers with a warm and appealing environment. Additionally, the store’s second floor boasted extensive glass windows, offering patrons panoramic views of the entire shopping center. To enhance the exterior aesthetics, a mosaic mural was commissioned for the facade and unveiled upon completion.

On November 27, 1964, another branch opened its doors within the San Patricio Plaza mall located in Guaynabo.

By October 17, 1969, reports indicated that merger discussions were underway. After two years of negotiations, a potential merger between New York Department Stores and Beck Industries, Inc., appeared feasible. This development was reported by a continental newspaper and confirmed by Mr. Maximo Crespo, who served as controller for the seven-store chain at that time. The proposed acquisition involved a combination of common stock and convertible preferred shares issued by Beck Industries Inc., which held a shoe concession within New York Department Stores in Puerto Rico. Having operated in Puerto Rico for 32 years by then, New York Department Stores maintained capital exceeding $12 million.

On October 4, 1972, a new outlet was launched at Mayagüez Mall in Mayagüez.

The company commemorated its 50th anniversary on April 7, 1981. During this milestone year, Alberto Kaufman—nephew of the late Salomón Kogan and serving as vice president of operations—announced plans to expand the Caguas store. Furthermore, on April 20, the renovated Old San Juan branch was officially reopened.

A report dated February 10, 1983 revealed plans for constructing a $5 million shopping center spanning 60,000 square feet on Jose Mercado Avenue in Caguas. This new development would prominently feature a New York Department Stores location as its anchor tenant.

On May 13, 1983, it was announced that New York Department Stores intended to reopen two former locations previously closed by the Barkers chain earlier that year in January. These stores were situated in the Yauco shopping center and Los Dominicos shopping center in Levittown, measuring approximately 32,250 and 40,000 square feet respectively. According to Rafael Pérez—then assistant vice president of finance—these reopenings would generate around 100 additional jobs on top of the existing workforce of roughly 700 employees spread across eight branches and a central warehouse located in Puerto Nuevo. The new stores were acquired through an auction held in New York City following Barkers’ bankruptcy filing earlier that year due to financial difficulties. The purchase included store equipment and leasing rights to their respective shopping centers for about $500,000. Pérez also noted that both Yauco and Levittown locations would retain Barkers’ centralized cashier system alongside supplementary cashiers stationed throughout various departments consistent with NYDS’s operational model elsewhere. Luis Muñiz was appointed manager of the Yauco store while Antonio Picón took charge of Levittown. At this time, New York Department Stores operated outlets in San Juan, Caguas, Santurce, Río Piedras, Bayamón, Guaynabo, Arecibo, and Mayagüez.

Acquisitions and Closure

On September 8, 1987, To-Fitness, a health food company based in Bay Harbour Island near Miami, announced its intention to purchase New York Department Stores of Puerto Rico for $8.5 million in cash, with plans to expand the retail chain in the upcoming years. The company aimed to introduce To-Fitness boutiques within each store, showcasing its range of health products such as multigrain bread, pasta, and instant yogurt shakes. At that time, New York Department Stores operated 10 locations across Puerto Rico and reported revenues of $42 million for the fiscal year 1987. Additionally, To-Fitness revealed that Ronald J. DeFusco, the former CEO of Spartan-Atlantic Stores, would assume the role of chairman for the chain. This acquisition was contingent upon approval from New York Department Stores’ shareholders.

By August 2, 1988, a group of investors completed the purchase of New York Department Stores along with another retail chain, Seedman's. Effective July 29 of that year, all shares of New York Department Stores of Puerto Rico Inc., Santurce Realty Inc., and Seedman's of Puerto Rico were transferred to NYTSA Acquisition. Ronald De Fusco, a principal investor in this transaction and a retail veteran with over three decades of experience, was appointed chairman of the board. De Fusco expressed his intention to offer investment opportunities within the new enterprise primarily to current executives and employees from the acquired companies. Michael Hess, formerly president of Seedman's, was named president, while Miguel Delgado, ex-executive vice president of New York Department Stores, took on the roles of executive vice president and chief financial officer. Apart from De Fusco, the largest investor involved was Investcorp—an international investment bank with offices in London, New York City, and Bahrain—known for backing corporate and real estate acquisitions.

On May 4, 1994, Melville Corporation’s Marshalls division agreed to acquire the majority stake held by Investcorp in New York Department Stores of Puerto Rico Inc., according to credit-rating agencies reporting a day earlier. Headquartered in Rye, New York, Melville entered into an agreement with Investcorp during the previous week covering all but one of Investcorp's Puerto Rican stores; however, financial terms were not disclosed. Investcorp owned approximately sixteen midsized department stores throughout Puerto Rico at that time. Following the acquisition by Melville Corporation, most of these stores were slated either for conversion into Marshalls outlets or closure.

By October 26, 1995, Investcorp publicly acknowledged that the performance of New York Department Stores in Puerto Rico had deteriorated to such an extent that it abandoned hopes for recovery and decided to return its initial investment to clients.