Rearview Mirror: Retail giant Gem had lasting impact on Hawaii

One of the things I like about writing this column is the interesting people I get to meet. While writing my first “Companies We Keep” book, one person I particularly enjoyed talking story with was Glenn Kaya.

Kaya was born in 1926 in Wahiawa and attended Leilehua High School. Working in the hot pineapple fields one summer convinced him to set his sights on something better.

Kaya was part of the team that brought GEM department stores to Hawaii. GEM was one of the first membership stores in the islands and paved the way for such giants as Costco and Sam’s Club.

Before we jump into the topic, see if you know the answers to these questions: What did the acronym GEM stand for? What were its membership requirements?

Where were its six Hawaii stores? Many of Hawaii’s well-known companies were GEM departments. Name one. GEM merged with a drug company and added this word to its name.

If you remember GEM but can’t answer the above questions, maybe this article will help you understand the company and the difference it made in Hawaii.

Began in Denver

Many people seem to think GEM was a local company, Kaya told me, but it began in Denver in 1956.

GEM stood for Government Employee Mutual, and you had to be a member to come into the store.

“The idea was that membership caused a sense of belonging,” Kaya recalled. “With membership, we knew who our customers were and where they lived. Our marketing was direct mailing to our members.”

Teachers, public servants, military personnel and clergy members were eligible for membership, at a cost of $1 a year. In its prime GEM boasted a membership of 250,000 people in Hawaii.

GEM was dedicated to increasing the spendable income of military and government employees by giving them nationally advertised, standard-brand, top-quality merchandise at the lowest possible prices, Kaya said.

Their departments included clothing, furniture, appliances, toys, jewelry, garden shop, drugs, luggage, sporting goods, shoes, building supplies and automotive.

GEM leased out space to businesses that ran its various departments. GEM did not have any investment in inventory. The concessionaires carried most of the risk.

“Many of Hawaii’s well-known companies were GEM departments. ABC Stores, Wong’s Drapery, C.S. Wo, Mid-Pacific Lumber, Kim Chow, Honolulu Sporting Goods and Hauoli were all GEM tenants,” said Kaya.

I went to Michigan, too!

One day in the late 1950s, Kaya was working in a neighborhood furniture store when Harold Toplin, an executive of GEM, stepped through the door. “Harold and I were talking and found we were both University of Michigan graduates. He asked me to join GEM.”

Kaya started in 1957 as an assistant manager before being promoted and relocated to San Francisco from 1965-1970, where he served as the regional vice president.

“There were no Asian managers of stores here at the time, and Harold gave me that opportunity. We opened the Kapalama GEM first, on Dillingham, in 1957.”

GEM in Hilo opened a year later on Waiaunenue Avenue and Keawe Street. The third GEM store was on Ward Avenue where Sports Authority was until 2016 Honolulu Mayor Neal Blaisdell and the Royal Hawaiian Band welcomed a crowd of 9,000 at its grand opening in 1962.

By 1966, sales at 38 GEM stores in the U.S., England and Puerto Rico topped $350 million (about $3.3 billion in 2023 dollars). Over 1.6 million were members.

Sales at the two Honolulu GEM stores surpassed $26 million ($250 million in 2023 dollars), prompting them to open stores in Waipahu, Kauai and Kane­ohe. This made them the No. 2 retailer in the state, behind Sears. Shortly before the Waipahu GEM opened in 1970, at 94-213 Leoku St., they eliminated the membership requirement.

Kaya was offered the role of company president. “I turned it down,” he said. “The company headquarters was in Kansas City, and I was walking the streets there and passed a guy with orange socks and a strange shirt. I thought to myself, ‘What am I doing here?’”

Pioneers

When GEM opened in the late 1950s, “blue laws” prohibited stores from opening on Sundays, so people could go to church. “We were instrumental in getting that changed,” Kaya said.

“Most retailers in Hawaii sold an item that cost $1 for $2 before GEM. We’d sell it for $1.50 but sell four in the time they could sell one. The consumer won and we’d win, too,” Kaya told me.

State laws in the 1950s prohibited discount prices. Instead, manufacturers and distributors could set prices for retailers. If one manufacturer in the state had a contract with a retailer to sell a product at a minimum price, no other retailer could undercut that price.

“We fought that, and it was great publicity for us,” Kaya said. Gov. Burns signed the Hawaii Fair Trade Act in 1967, allowing retailers to set and discount prices as they saw fit.

Other discounters, including Wigwam, Gibson’s and Holiday Mart followed in GEM’s footsteps.

Arrested

Sometimes, when you feel strongly about something, life brings you to a precipice. Do you fight for what you believe in or concede?

The issue was liquor discounting. Could GEM sell below a price set by the manufacturer or the state?

The state set a minimum price on alcohol. GEM decided to challenge it. They sold a case of Olympia beer for $5.70. The state said it could not be less than $8.78.

GEM Hawaii General Manager Howard Rushton worked the register, to protect his staff. He expected to be cited. Instead, the liquor commissioner arrested him. He was released on bail and the city later dropped the charges.

Also dropping were liquor prices, as many stores followed GEM in cutting prices.

Cartoon characters

Do you remember seeing Fred Flintstone in a hula skirt at GEM? Kaya brought in several Hanna-Barbera costumed characters, such as Fred Flintstone, Yogi Bear and Huckleberry Hound, who drew a bigger airport crowd than President Eisenhower.

Over 300 children and their parents greeted 6-foot-2-tall Fred Flintstone when he flew to Honolulu in 1962. His costume was made out of papier-mache, plastic and other materials, with a hidden loudspeaker.

Flintstone sang a song for the crowd, “It’s Great to Be in Hawaii,” then his floral-­decked float and police-­escorted motorcade took him through downtown Honolulu, Waikiki and then to GEM, where thousands more came to see him at the store for the next three days.

On Monday he made a special appearance at Shriners Hospitals, where he visited the children there.

Huckleberry Hound, Yogi Bear and Quick Draw McGraw came to Honolulu in 1960. Over 10,000 greeted them at Honolulu Airport. After three days of activities at the GEM store in Kapa­lama, they flew to Hilo to visit the GEM store there.

They put on a show at the Mamo theater and raised money for the Tidal Wave Disaster Relief Fund.

Mel Blanc

Kaya recalled, “Many years ago there was a young boy who was critically ill and would not make it to year end. I wanted to give this young boy a Christmas in July.”

Kaya supplied toys and gifts but wanted one thing more. “Mel Blanc and his wife were good friends of mine. I asked Mel Blanc to call this young boy in his many voices, such as Bugs Bunny, Porky Pig and Daffy Duck, when the delivery of gifts was made.

“He did it at no charge. That was the kind of the human being he was. He was one of the finest gentlemen I’ve known, and a great humanitarian.”

Epilogue

In 1965 GEM merged with Parkview Drugs and was renamed Parkview-GEM.

By the 1980s, GEM found it hard to compete with WalMart and Costco. Kaya convinced Seibu of Japan to buy both GEM and Mc­Inerny, and they continued to thrive in Hawaii for a while. In 1993, Seibu decided to focus on its Southeast Asian businesses and closed GEM.

Kaya managed the City Square, Waimalu Plaza and an industrial warehouse property on Guam until recently. I’d drop in on him at his City Square office and chat about retailing.

Kaya died Oct. 1 at the age of 96. Services will be private.

Glenn Kaya and GEM had a huge impact on business in the islands. They pioneered discounting, membership stores and being open seven days a week.

Bob Sigall is the author of the five “The Companies We Keep” books. Contact him at Sigall@Yahoo.com or sign up for his free email newsletter at RearviewMirrorInsider.com.