GO
Loading...

Shoeshines keep Wall Street in the black (or maybe brown)

In-house shoeshine service on Wall Street has proven resilient, surviving the rise of technology and even the 2008 financial crisis, which snuffed out many of its quirks.
Ozier Muhammad | The New York Times)
In-house shoeshine service on Wall Street has proven resilient, surviving the rise of technology and even the 2008 financial crisis, which snuffed out many of its quirks.

Mauricio Dias was being courted by Wall Street.

After losing his job at the investment bank Donaldson, Lufkin & Jenrette when it was sold to Credit Suisse, he received a phone call from the office of Hamilton E. James, the executive who had orchestrated the sale, Mr. Dias said. Mr. James was starting a new role as the No. 2 at the Blackstone Group, a big investment firm, and wanted Mr. Dias to join him.

Mr. Dias, now a 10-year stalwart at Blackstone, is no banker with a briefcase, however. He carries a shoeshine box.

Inside New York's investment houses, a vestige of old Wall Street lives on. Gone are the days when offices were filled with smoke and secretaries were the only women in sight. But in-house shoeshine service has proved remarkably resilient, surviving the rise of technology and even the turmoil of the 2008 financial crisis, which snuffed out many of Wall Street's quirks.

Mr. Dias, 52, is at the top of the heap in the shoeshine world. He charges $6 for a shine in Blackstone's offices, while the Dr. Shine shoeshine parlor in the building's lobby charges $3. Not counting the tip.

"He's a V.I.P.," said Gotardo Cortez, 38, a co-owner of Dr. Shine. A spokesman for Blackstone declined to comment.

Though they are not bank employees, Wall Street's shoeshine workers are privy to the hidden dramas of trading floors and executive suites. At JPMorgan Chase, for example, a shoeshine worker said that Jamie Dimon, the bank's powerful chief executive—who favors Ferragamo loafers—typically offers $10 for a shoeshine, "the same thing the guys on the trading floor pay."

But the modern shoeshine business has changed since the old days, reflecting the evolution of Wall Street firms from private partnerships to large, public corporations. Senior traders from Bear Stearns recall the days when they could put their feet up on a shoeshine box brought to their desks and banter with their colleagues as the deed was done. But that changed after JPMorgan took over the firm in 2008.

At JPMorgan, Goldman Sachs and Morgan Stanley, teams of workers now collect shoes and take them elsewhere to be shined, leaving traders to work in stocking feet. Though many bank employees appreciate the efficiency of that updated method—harried traders sometimes claim they do not even have time to use the restroom—some longtime employees see it as an affront.

"They've turned it into a sterile thing," said James J. Dunne III, the senior managing principal of the investment bank Sandler O'Neill & Partners. "That's where Wall Street has gotten more like a department store."

(More from The New York Times:
Trump University made false claims, lawsuit says
Platinum card and text alert, via pawnshop
Young tech sees itself in Microsoft's Ballmer)

The subject of shoeshines is a sentimental one for many Wall Street denizens, but perhaps none more so than Mr. Dunne, for whom a shoeshine was his introduction to the industry in September 1978.

A few months out of college and just days into an investment bank job, Mr. Dunne was sitting at his desk at L. F. Rothschild, Unterberg, Towbin and marveling at the shoeshine worker. He thought, "Who would pay to get a shoeshine?"

He soon found out. Mark H. Rosen, his immediate boss, told Mr. Dunne to "chill out a little bit," Mr. Dunne said. Johnny B., the shoeshine worker, proceeded to work his magic on Mr. Dunne—courtesy of Mr. Rosen.

"It was just a wonderful, warm welcoming. It was about more than just get-that-spreadsheet-done," Mr. Dunne, now 56, said. "There was a very human aspect to it."

(Read more: Seeking sales momentum, small-business owners pass on vacation)

The annals of Wall Street lore are brimming with tales of shoeshine workers and their customers—the biggest tippers, the overheard stock tips. And, of course, there is the one told by Joseph P. Kennedy Sr., the high-flying financier who was the first chairman of the Securities and Exchange Commission.

A master of the market, Mr. Kennedy had the foresight to sell his stock holdings before the crash of 1929. He later told a reporter—perhaps not entirely seriously—that he realized the market was overheated when, on a visit to a shoeshine parlor on Wall Street, he heard from the worker snapping a cloth across his shoes "what was going to happen to various stocks and offerings on the market that day"—and the worker was "entirely correct."

Ticker tape has long since given way to computer screens, but the shoeshine has remained.

"There was always a shoeshine guy who came around," said John H. Gutfreund, who joined Salomon Brothers as a trainee in 1953 and rose to become its chief executive in the 1980s.

Mr. Gutfreund, 83, recalled paying $2 or $3 to get his shoes shined at his desk. "Anybody who wanted a shoeshine got it," he said.

Traditionally, the relationships between shoeshine workers and their firms have been supported by custom—and amenable security guards—rather than official edict. But one of the firms to formalize the arrangement was Goldman Sachs.

(Read more: Best and worst U.S. cities for small-business workers)

'Shoeshine technicians'

In the mid-1990s, when Jon S. Corzine was the chief executive of Goldman, employees on the fixed-income floor asked him to allow shoeshine workers to come to the office on a regular basis, a person familiar with the matter said.

Mr. Corzine approved the request.

Today, a handful of uniformed contract workers—known internally as "shoeshine technicians"—patrol Goldman's headquarters at 200 West Street, with a daily routine that reflects a corporate sense of efficiency. They handle a trading floor in sections, whisking away shoes to be shined and leaving traders to work in socks. One shoeshine parlor in Manhattan, Eddie's Shoe Repair, aims to capitalize on this shift by offering a classic experience that has become increasingly rare inside banks.

Employees of firms like Barclays, Morgan Stanley and Bank of America Merrill Lynch trek to the shop in Rockefeller Center for a 15-minute shoeshine and the opportunity to banter with the owner, Hugo Ardaix, who says the banks' own shoeshine workers skimp on quality.

"It's like a lot of things on the Street: it's not as personal as it used to be," said one senior employee of a big bank who spoke on the condition of anonymity because of a company policy against speaking to the news media. "In the past, the trading floors were smaller, the firms were smaller and the service providers were people you saw pretty much every day. You got to know them."

(Read more: An upscale pawnbroker offers an alternative form of financing)

For Mr. Dunne of Sandler O'Neill, that first shoeshine in 1978 led to many more. He and Mr. Rosen would often treat each other to a shine, including in the years after Mr. Rosen joined his friend at Sandler.

But the tradition ended the morning of Sept. 11, 2001, when Mr. Rosen, working at Sandler's offices in the World Trade Center, was killed.

Now, the ritual has a more tragic resonance.

"There is not a time," Mr. Dunne said, "that I have ever gotten a shine when I've not thought about him."

Contact Small Business

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    › Learn More