Fedco

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Federal Employees' Distributing Company
Type Defunct
Founded 1948
Headquarters Los Angeles, California
Industry Retail
Products clothing, footwear, housewares, jewelry, garden, appliances, sporting goods, produce, hardware, toys, electronics
Website None

Fedco (Federal Employees' Distributing Company) was a membership-based department store chain that operated in Southern California from 1948 to 1999.

Contents

[edit] History

[edit] Beginning

The chain was unusual in that it was a nonprofit consumers' cooperative. It was founded by 800 U.S. Post Office employees who wanted to leverage their buying power by purchasing goods directly from wholesalers. Lines included general merchandise, grocery, and in some locations, auto services and furniture. A lifetime membership was less than five dollars for employees of the U.S. government, students, and their family members. In later years, Fedco membership opened to the general public, with memberships being sold at swap meets. Fedco's lifetime membership cost $10 in 1998 [1].

At its peak, Fedco had ten department stores plus three appliance-only stores, and served 4 million members.

[edit] Business Model

The management strove to make Fedco a one-stop shopping destination. The customer/member was presented with a wide variety of consumer products: camera equipment, office machines, major and minor appliances, garden supplies, clothing, jewelry and groceries. The stores also had a full-service deli and a separate produce department. The corporate buyers often found one-of-a-kind deals on miscellaneous items. At the holiday season the garden department became a toy wonderland.

The stores were tightly managed and offered many young people their first jobs. To foster smooth operation, romantic interest between employees was discouraged, and married couples were not allowed to hold Fedco jobs concurrently.

Some of the departments around the periphery of the building were not Fedco businesses but concessions run by outside companies. As an example, the Stereo Components department was run by Coastron, seller of the Soundcraftsmen line of stereo equipment. Coastron paid rent to Fedco to operate in the building. Other concessions were the Optical Department (later bought out by Fedco), the Shaver Shop, Key & Lock Shop, and others.

The membership model was successful for Fedco for decades. It was common for the stores to be crowded, with long lines at checkout. As merchandise was bagged, the bags were stapled shut and the receipt stapled on the top.


Fedco was usually closed to customers on Wednesdays. Some employees might work on Wednesdays re-stocking or taking inventory. During the Christmas season Fedco would open on Wednesday to accommodate the customer surge.

[edit] Fedco Reporter

The Fedco Reporter was the store's catalog and magazine. The department was run by Art Director and Department manager Salvador Heredia and Editor Anita McManes. The Reporter was a bi-monthly 62 page dated catalog mailed to members. There were seasonal specials and sales with themes like "Buyers' Goof Days." In addition to showcasing products, it also contained short one-column articles. Most issues contained one article about updates in federal policy that might affect federal employees. The majority of the articles were about minor but colorful stories in California history, and were labeled with a "California Historical" logo.

[edit] Bankruptcy

Fedco predated the giant chains Wal-Mart, Target, Kmart, and fellow membership chain Costco, but remained a regional chain and eventually was unable to compete with the national retail titans. Fedco filed for Chapter 11 bankruptcy in 1999, at which point it had been the longest-operating membership-based store in the country. In an ironic final twist, most of its locations were sold to the Target chain. In addition, the $10 lifetime membership at Fedco was exchanged for a $300 Target coupon at the 1999 bankruptcy.[1] The proceeds of the bankruptcy sale were placed in a trust fund intended to charitably serve communities that had hosted Fedco stores.

[edit] Locations

  • PREVIOUS LOCATIONS
    • San Diego (Euclid and 54th, building now used as an indoor swap meet)

[edit] References

  1. ^ Discount Store News (October 25, 1999) Fedco to offer coupons to settle membership. Volume 38; Issue 20; Page 4.