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Alfred Taubman: Businessman who made the shopping mall central to the consumer experience but was jailed for price-fixing

His great insight was to recognise back in the early '50s that the gathering migration from city to suburbs would create demand not just for housing but for full-spectrum retail outlets as well

Rupert Cornwell
Tuesday 21 April 2015 19:31 BST
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Taubman: he gave away hundreds of millions of dollars
Taubman: he gave away hundreds of millions of dollars

Alfred Taubman was one of the most gifted US retailers of his age. He might not have invented the shopping mall, but he certainly perfected the indoor consumer paradises that today dot suburbs across the country. He sold root beers and fine art with equal gusto. And even conviction and imprisonment on anti-trust charges relating to his years in charge of Sotheby's auction house hardly dented his reputation.

Taubman's great insight, which has left its mark on American culture, was to recognise back in the early '50s that the gathering migration from city to suburbs, nowhere more evident than in his then booming hometown of Detroit, would create demand not just for housing but for full-spectrum retail outlets as well.

These would be enticing, preferably anchored by some ritzy store like Saks Fifth Avenue, Nordstrom or Neiman Marcus. They would be indoor and, increasingly, multi-storey, with dedicated car parks in front (another Taubman innovation). A short drive from home, easy parking – and there was practically anything you wanted to buy, right in front of you.

In a sense Taubman was continuing the family business. He born in Pontiac, just north of Detroit, in 1924, the son of German-Jewish immigrants. His father was a small-scale builder and developer until he lost all in the Great Depression. Adolph, as Alfred was known then, was dyslexic and left handed, traits stigmatised at the time. But by nine he was doing odd jobs to help keep the family afloat. As with many dyslexics, his trouble with words went hand-in-hand with a remarkable spatial awareness.

In 1943, he left the University of Michigan, where he was studying art and architecture, at the end of his first year to fight in the Second World War. About that time, for obvious reasons he dropped the Adolph, and began using his middle name, Alfred. He returned first to the University of Michigan and then to the Lawrence Technological University. He graduated from neither but emerged with a love and knowledge of arts, especially painting, that would one day lead him to Sotheby's.

For the moment he focused on building and property development. In 1950, he set up Taubman Company, later to become his flagship enterprise Taubman Centers. By the end of his life it was operating some 20 malls, including some of the most profitable in the US. Between 1982 and 1994 he also controlled the A&W Restaurant chain, celebrated for its hot dogs and root beer soda. He later remarked, after joining Sotheby's."There is more similarity in a precious painting by Degas and a frosted mug of root beer than you ever thought possible. People don't need root beer, they don't need to buy a painting, either. We provide them a sense that it will give them a happier experience."

In 1983 came his most unexpected coup, when he emerged as a "white knight" to buy the ailing auction house of Sotheby's Parke-Bernet. "Parke-Bernet" (referring to the US auction house purchased by Sotheby's in 1964) quickly vanished from the name plate, and plain old Sotheby's gained a new lease of life.

Initially Taubman was regarded by the stuffy and snobbish art community, especially in Britain, as a brash, unqualified interloper. But it became apparent he knew a great deal about art, while the retailing skills of "the shopping mall guy" soon started to work their magic.

He redesigned the New York headquarters to make it more user- and public-friendly ("I wanted to create an open feeling where all the goods were available to everyone," he said), and caught the national imagination with sales of the estates of Jackie Kennedy and the Duchess of Windsor. By 1988 he took the company public, making Sotheby's the oldest traded company on the New York Stock Exchange.

Then in 2000 it emerged that Sotheby's and Christie's had engaged in a price-fixing scheme that prosecutors said cheated sellers of $400m, via inflated commission fees. Taubman was accused of colluding with Anthony Tennant, his Eton-educated counterpart at Christie's. In 2002 he was sentenced to serve 10 months in a low-security prison in Minnesota. He emerged "slightly bowed but unbeaten," as one observer put it, and insisting on his innocence.

"I had lost a chunk of my life, my good name and around 27 pounds," he recalled in his brief but entertaining 2007 memoir, Threshold Resistance. Despite its clunky title (which refers to a consumer's psychological reluctance to enter a store and how to overcome it) the book became a bestseller. In it he argues that he was framed by Sotheby's then CEO Diana Brooks (who served six months' house arrest) and her former Christie's opposite number Christopher Davidge after the pair made plea bargain deals with prosecutors. Why Taubman never testified in his defence (apparently on the advice of his lawyers,) remains a mystery.

In the US, however, all was mostly forgiven. Luminaries like Donald Trump and Henry Kissinger attended the book launch party. Taubman himself simply moved on. He was a big man in every sense, gregarious yet sometimes intimidating, a tough negotiator with a loud laugh and sometimes cruel wit. One thing, however, was never in doubt: his generosity.

Long before his disgrace and continuing afterwards, he gave hundreds of millions of dollars to his alma maters, the University of Michigan and Lawrence Technological, as well as other institutions including Brown and Harvard universities, and his beloved Detroit Institute of Arts. He endowed buildings, and supported various medical causes including stem-cell research and the search for a cure for the neuro-degenerative Lou Gehrig's Disease. There were other less heralded acts of giving, too, such as when he helped the civil rights heroine Rosa Parks move after she had been attacked in her Detroit home.

To the end he never lost his enthusiasm. A month before his death from a heart attack he travelled to Puerto Rico for the opening of Taubman Centers' new Mall of San Juan. And he was a perfectionist. A close real estate partner said of him, "He is the most knowledgeable person I have ever met with the planning and design of real estate. He critiques everything – the parking, the closets. He has the best eye I've ever seen in my life."

Adolph Alfred Taubman, businessman and philanthropist: born Pontiac, Michigan 31 January 1924; married 1948 Reva Kolodney (divorced 1977; three children), 1982 Judith Mazor (two stepchildren); died Bloomfield Hills, Michigan 17 April 2015.

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