Dawahares-An All Too Typically American Success Story Gone Bad

Today marks the end of the Dawahares debacle, which might have been one of the first and most obvious warning signs of the imminence of our current financial crisis. With a life span of a century that spanned two world wars and the great Depression, the Kentucky clothing store chain Dawahares would have seemed to some almost as immune as Lehman Brothers, but it now seems obvious that an archaic for the times business model doomed it in an economy to which it could not or perhaps would not adapt. The picture above is from the Grand Opening of one of its many stores, this one in Hazard Kentucky in 1947. It like all the others are gone forever.

I blogged about this phenomenon here, and received quite a few interesting comments from some individuals directly involved with the old family business that was a staple of the economy of Kentucky.

One such comment was from Lee, who blogs at Digital Nicotine

Hey, found your place by googling Dawahares. Intersting place, to be sure.

I worked there for three years '02 -- '05, at the Mall St. Matthews location, so I have a perspective, trust me. There are many reasons Dawahares failed, but I have limited space before I lose attention, so in bullet form...

~ You are right about going cheap. The bulk of merchandise was under $20, and most of it was knock off.

~ They paid crap. I couldn't tell you how many talented people left that company because not only were they not being well, they weren't even paying well by retail standards.

~ They made stupid moves. A perfect example was they cut out completely commissions on suit sales. This caused Syd, an old Jewish man who had worked for 27 years in the company to retire out of frustration at the inexplicable paycut he just got. That man had more connections in the Louisville Jewish community than you could imagine, and they lost them when he left. And Allen, an elderly black gentleman who also worked in Suits for the past 15 years quit as well soon afterward, and the company lost all his connections in the black community, which he had several.

~ Finally: "A house divided among itself shall not stand." That family was dysfunctional to put it mildly, and what the previous generations had built up, the current one was rapidly tearing it down with infighting, bickering, jealousies, and all of this fairly visible to even the part-time teenagers working after school.

There are many more, but space and interest are limited. This current economy was merely the strong wind that knocked the old and diseased tree down.


I am still receiving comments from other such former employees and customers. The following appeared in my in-box just a few days ago.

I live in the Eastern Kentucky town that Dawhares started in and to see the store closed and empty is very sad. I worked at the store when in school and will miss having such a nice clothing store to go to that is close to home.


By far the most compelling comment, however, comes from Amina Dawahare, a member of the family, who presented her own unique perspective as follows-

As A Dawahare family member and the only grandchild of William Dawahare, the Syrian immigrants oldest son, I will say that you are right, there was poor merchandise due to the fact that people could no longer afford the high end brands we used to carry. And I will say that the family is extreemely disfunctional as on of you other comments said, and unfortunately the jealousy and stupidity of some ruined everything for the rest, it is sad when you feel so conflicted not wantin gto fight your family for your inherited right, and in trying to be kind and loving you get essentially screwed up. My mother and I, she is also an only child, have now lost everything as all we had was invested as stock in this company, and we had absolutely no fault in the downfall of the company as after my grandfather died we were pushed out completely, and we allowed them ,to do it to try to keep peace in our very turbulant family.


This of course initiated what amounted to an angry rebuttal by yet another of the Dawahares family members, who in letting it be known that he had no sympathy whatsoever for her plight gave a perfect illustration of the dysfunctional nature of the Dawahares family which Lee had earlier alluded to-

Anonymous said...

As another member of the Dawahare family, I just want to point out the fact that Amina Dawahare has never worked a LEGITIMATE day in her life for the company. Sure, you might have worked in the office as a summer job here or there, but you know as well as I do that you have never actually put any blood, sweat, or tears (until now) into the company. Her mother, W.R. Dawahare, has never been involved with the company either. Their father was a great man and left a nice inheritance for them to live on. I find it quite amusing to see her come on here and act like she has any clue what she is talking about. You were pushed out -- yeah right. You were BOUGHT OUT. Big difference.

You're an adult. If you're not able to stand on your own two feet now, it's nobody's fault but your own.


All of this led to this comment by yet another former employee of the family who cares nothing it seems for the current generation of the family.

wow - amazing posts by the family members.

i grew up with a number of the 3rd generation members of the family

they were very outspoken and very arrogant people

the members of the 2nd generation that i knew - by contrast - were classy people. i feel very sorry for them.

the 3rd generation folks deserve a little humiliation - this is great news !



This is the kind of thing that might soon play out in towns and cities across America. What is truly disconcerting is that we should have viewed the failure of Dawahares as a warning sign that all was not well with out economy, even when we were being told that everything was fine. Spend, spend, spend.

Allow me to toot my own horn here for a second. I’ve been saying for years, to anybody that cared to listen, that our economy was headed for a sobering reality check, at the very least, and more than likely a painful period of, let us say adjustment. I warned people about the coming end of the tech bubble two years before it actually happened. And I have been warning about the tenuousness of the housing bubble since 2005 at least.

Bottom line is there are some good components to it. Houses will now be cheaper. To be more precise, housing prices will be more of a true reflection of their actual worth. True, it will be harder to get a loan to buy one for some time, but that too will pass. Yes, times are going to be rough for a while whether there is ever a bail out or not.

What, then, is the main thing we should worry about? Oh, that’s an easy one.

We should worry because, as surely as night follows day, we are going to be doing this all over again. It won’t be a long time coming either. People never learn.

If there really was a just, merciful God, You Tube would have been invented in the nineteen twenties. Then, we could all watch old videos of nineteen twenty era stockbrokers jumping out of windows and splattering on the streets below.

We might get a chance to see it yet.

I can't help but wonder if our economic system has become as overall dysfunctional as the Dawahares family. If that is the case, fixing it is going to be a tall order, and I'm not sure Congress or any other branch of government is the right source for a cure. I wonder if anything can fix it.