A look into Houston's retail past

Pace Membership Warehouse

Throughout the 1980s the United States saw a boom in warehouse chains. While the concept had been around for at least 10 years by this point, early stores were mostly operated by established retailers in limited areas, serving more as a proof of concept. The first successful warehouse chain is usually considered Price Club, which was built from the ground up by the Price family. Their success was quickly copied by other chains like Costco, who would later merge with them. Established retailers also bought into the trend mostly by purchasing preexisting chains.

By the mid 80s the dominant player in wholesale was Wal-Mart who had been focused on expanding the Sam’s Club side of their business. Which had been tested marketed in Texas in the early 80s. Not wanting to miss out on the action Kmart made the decision to purchase the small, but profitable Pace Membership Warehouse chain. Initially the stores performed well, but a mistake was made by expanding into well served markets like Houston and Dallas. This quickly put a financial drain on Kmart, which was putting lots of focus into expanding and diversifying. Pace first tried to alleviate money issues by selling their more profitable locations to Wal-Mart who would convert them to Sam’s. Leaving locations that were either under performing or too close to existing Sam’s stores. The money from this sale was meant to be put towards Super Kmart’s expansion, and would launch Kmart’s divestiture of all non-core businesses.

This commercial aired in 1993 in the Texas market. It was a last ditch effort to capitalize on free membership.

Houston’s first experience with a warehouse chain was Gemco who opened five stores here in the early 70s. After experiencing issues Gemco sold 3 locations to Wal-Mart to convert to Sam’s Club, with the others sold to Fiesta. Sam’s would continue expanding in Houston unabated until 1992 when multiple warehouse chains expressed interest in expanding into Houston. These chains were Price Club who would build a location on I-10 and, Costco who would not come to Houston, and of course Pace Membership.

The first location selected by Pace was part of what was termed as a power center. Three stores were built to be anchored by Kmart brands. The stores were Kmart, Pace, and Builder’s Square with parcels left for future expansion. The location selected was at the Southwest corner of I-45 and West Road. Previously the location had held Houston’s final drive-in theater which had opened only 7 years prior. The former Pace store was temporarily converted to a company owned Compaq Outlet Store, before being converted to the furniture retailer The Dump. The building which is now Fry’s was originally Builder’s Square. Fry’s enclosed the garden center to extend floor space. The Kmart is now subdivided by Ross and Fallas Parades. While the external facade has been dressed up, the original shape of the store has been kept. Pace was the first to leave the shopping center along with the other Houston store in 1994. Builder’s Square was next to leave in 1998 with Kmart finally vacating in 2003. Since then the strip center has done pretty well, and had some spots fill out although the 4th anchor location is still vacant.

Another store was opened at 8715 West Loop South. This was in another Kmart owned center. However, rather than the Power Center this location was simply a Builder’s Square and Pace Warehouse in close proximity. The buildings were not connected and the stores around the shopping center were leased to various tenants, mostly restaurants. The Builder’s Square location was originally Children’s Palace’s and was purchased by Kmart during bankruptcy. While Builder’s Square reused the original building It would be eventually demolished for Lowe’s. As for Pace’s after their exit from Houston, the building sat vacant for many years. Finally being subdivided and split among multiple tenants. The first to move in was Hobby Lobby in 1997, with Mars Music following shortly after.

Photo Gallery

10251 North Fwy, Houston, TX Building now used by "The Dump"
8715 West Loop S Houston, TX Building now subdivided by K&G and Hobby Lobby

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