Rainbow Shops was founded in 1935[2] in New York City by Irving Arthur Swarzman,[3] an Austrian native who was raised in Brooklyn.

Swarzman chose the name “Rainbow” to reflect the vibrant and diverse range of affordable fashion options sold at the store.

Swarzman brought his four brothers (Herman, Oscar, Ira, and Nat) into the business as they reached working age.

[4][5] Today, along with sister brands 5-7-9 and Marianne, Rainbow operates 1,300 stores in United States, Puerto Rico, and the U.S. Virgin Islands.

Larger stores usually carry juniors, plus, lingerie, shoes and kids departments.