Our History
Chicago. 1893. On a downtown corner - at LaSalle and Monroe - a 15-year old boy named Charles Levy sold newspapers. Then, in a raffle, he won a horse and wagon that were valued at $12. "That was the only break dad needed," Levy's son, Charles Levy Jr, noted in 1952. "He made his own breaks from then on." The self-described "young punk" soon put his horse and wagon to work. Jim Stewart, the Circulation Manager of the Chicago Mail, on the city's many newspapers, offered Levy a job hauling papers down Halsted Street to the stock yards.
Levy's small enterprise began to grow. Before long, he was carrying some of the best-known papers of the day, including the Times, the Inter-Ocean and the Chronicle to the newsboys and newsstands on Chicago's West Side. His brother Joseph, as well as brothers Ben and Max, joined the company. When the first gasoline-powered, solid-tire "auto buggies" were introduced, Levy purchased one and then more. Union drivers were hired to help with the new routes. They worked six and half days out of every seven, including a 10-hour stint on Saturdays, for $15 per week.
Riding the American postwar economic boom, the company entered a new period of innovation and growth. At the end of the 1940's, the company began distributing paperback books, which had gained their first major audience when they were shipped to soldiers fighting the war. By 1950, more than a quarter-billion paperbacks were being sold each year at drug stores and newsstands for 25 cents, 35 cents, or (for blockbusters) 50 cents each. In 1952, the company acquired one of its major competitors in the magazine business - the J.O. Stoll Company. It was a shrewd but ambitious move. Levy and Stoll each accounted for roughly thirty percent of the magazine sales at newsstands in the Chicago area, but while Levy distributed magazines for four large publishers, Stoll served 11 smaller ones. The 150 titles Levy carried previously grew to 750 titles, while annual book and magazine sales doubled to $5 million. "The business changed overnight," recalled the late Herbert B. Fried, Levy's president from 1968 to 1976.
While the magazine and book business doubled, the company's newspaper business was benefiting from the explosive growth of the suburbs. As hundreds of thousands of families poured into the towns surrounding Chicago, the city's major newspapers followed them, and they were all delivered by Levy. "It was a winning proposition for everyone," says Frank Tiano. "By handling all three papers we could deliver them at lower cost than the paper could, and we could do it reliably."
Newspapers may have been Levy's most well-known business, but the company was also building its other operations. Chuck, Lou Levy, who was the company's General Manager before retiring in the late 1950's, and Herb Fried, set out to make the company the nation's leading magazine and book distributor. "Levy was the innovation of practically everything new in the magazine and book business," Fried say, "new ideas, and new ways of doing things." The new ideas included professional management. At a time when most of the companies in the industry were small "mom and pop" businesses run by people who had been trained on the street, Levy began hiring people with formal management education. Managers already working for the company regularly attended seminars and classes. Others in the industry took note. "Levy was in the forefront in recruiting top-flight management," says Hugh Crocker, a former circulation director for TV Guide which did business with Levy at the time. Crocker also notes that Levy "was in the vanguard," when it came to encouraging top performance through actions that included one of the industry's first profit sharing plans.
The company made its presence felt in other ways as well. In the late 1950's, Chuck founded the Council Of Independent Distributors, which later became the Council of Periodical Distributors Association. Through the organization he was instrumental in preserving the role of the independent distributors. Chuck later served as the president of the Mid-American Periodical Distribution Association. In the mid 1960's, he founded the Magazine Distribution Research Project to explore how the new data processing technologies could benefit the industry.
At the same time, the United States government was praising Levy's distribution capabilities. In 1965, the U.S. Information Agency, then headed by Carl T. Rowan, presented the company with a distinguished service award for its work with books USA, which sent "CARE packages" of books to developing countries. During the war in Vietnam, Levy was contracted by the government to send pre-packed boxes of books and library kits to the troops stationed in that country.
Soon Levy's book business would grow even more. In 1968, David Moscow, who Fried had hired in 1965, was named to lead the company's new Computer Book Service (CBS). Now know as Levy Home Entertainment, CBS was established to use computerized sales analyses to select and merchandise paperback books for mass merchants. "Working with statisticians from the University of Chicago, David designed a system which revolutionized the way paperbacks and hardcovers were sold in retail stores. Historically books were sold by drivers who visited each store and personally decided what to put in by checking the fixtures" explains Carol Kloster, Levy's President. "But in the new system, cards were inserted behind each book or title, and when the cards were returned to us, we could use that information to generate a new order."
The information - based rack jobbing service was aimed at the national mass market retailers that were beginning to emerge at the time. Instead of dealing with different distributors at each of their stores across the country, they would consolidate their purchases, and the merchandise was selected for them.
In 1986, at the age of 73, after a 51-year career with the company, Chuck Levy died following a long struggle with emphysema. The company that Chuck and his father had led for so long neared its hundredth anniversary under the direction of Chuck's daughter Barbara Levy Kipper. It's businesses continued to prosper and grow.
In 1991, Barbara Levy Kipper and the board appointed Carol Good Kloster as it's new president, replacing David Moscow who left for other ventures. The company has changed greatly during the last 16 years, as it sold off many of its smaller distribution business to concentrate on those which could afford the best long term growth. In the 80’s, the company tested distribution of many different items, including videos and music, but over time elected to concentrate on its core businesses of magazines and books.
In 1995 the magazine industry began a consolidation from over 400 wholesalers to fewer than 20, with the largest four having over 80% of the nationwide market. Levy competed in this arena, growing its magazine business from 65 million to over 400 million by 2005, earning the third largest market share with over 20% of the nationwide business. Growth came from both organic store growth and strategic acquisitions. Early in 1996, The magazine division merged with North Shore Distributors, owned by James Levy, who today is the company's Vice Chairman.
In 2005, the company decided that the magazine business was never going to be able to provide reasonable return on investment, as the rapid consolidation had left the total wholesale industry in a shambles. While Levy had innovated and clawed its way to profitability by improving internal processes and working with its retail customers, it decided to sell this historic magazine distribution business to Source Interlink. When it was sold, Levy was distributing magazines from California to Pennsylvania, in Wal*Marts as well as Dominicks and thousands of other chains, both large and small.
Today, Levy Home Entertainment enjoys a reputation as an innovator and market shaper. Still led by granddaughter of the founder, Levy Home Entertainment has maintained its position as the largest distributor of book product to mass-market retailers, adding distribution to all 50 states.
