The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-06-27
Says Corporation Followed
Least Resistance in Distrib-
uting Its Merchandise.

The Dry Goods Economist will say to-
day under the heading. THE Causes OF
the H. b. Claim Company's Failure:
That the II. Il. Clafin Company was
operating along tho lines OF greatest re-
sistance in tho profitable distribution OF
It's merchandise has long been known to
those well acquainted with the shifting
currents of the dry goods trade.
The failures of Il. 8. Jaffray & Co., Of
Sweetser, Pembroke q Co. and of tho
Tefft-Weller Company and the discontinue
ance of Lee. Tweedy 4 Co. were significant
straws which showed how the CONNER
cial winds were blowing in the New York
jobbing situation. The II. Il. Clafin Com
pany apparently stood alone. unframed
and firm as Gibraltar. in the storms which
wrecked these other important houses:
and now 1t too succumbs, leaving only
one other house to represent the jobbing
! interest in general dry goods distribution
In New York city.
It had been evident for many years
that New York. situated on the rim OF the
country Is chiefly a primary merchandise
market. In other words, its largest vol
ume OF business must be handled by
manufacturers or by the direct represen-
tatives OF manufacturers these dealing d.
rectly with their logical customers, the
I jobbers In other sections, the larger retail
| ers of the country and the cutting up
trades, which now absorb 30 large pro-
portion Of the piece goods output
Many have recognized the fact that the
! drifting westward OF the centre OF popula-
ton has brought "A marked change In JOB
| bling distribution. Other old time houses
! I'm New York long ago found that they
could no longer do a profitable national
business | competition with the virile,
aggressive Jobbing interests of the central
West and other districts. which In add
ton TO splendid purchasing power, finan-
cial stability and aggressive salesmanship
possessed the further advantage of being
a handy and convenient source OF supply
Their Jobbing Fronts Inadequate.
Had the Clafin company been content
to operate as localized Jobbing house
they would have been In a more logica
position. What they did was to seek 9
, further outlet through affiliated retail
stores and through the cutting up trades
n this attempt they encountered the di
! ect competition of their own sources o
, upply. Consequently. whatever business
was obtained under these highly com
petltive conditions produced only yer,
small margin OF profit-entirely out o
, proportion to the overhead expense which
, the company's jobbing system entailed.
Manufacturing Operations.
1t has been known to those who stud,
the scheme of operation in dry goods dis
tribution that the H. Il. Clafin Compan.
l has made many and important change
: In its methods OF doing business In tn
last decade.
! At one time It entered into the carmen
field very aggressively and organized an
maintained a very large department 10
: the sale of coats. suits and other apparel
The manufacture of sheets and pillow
= cases, muslin underwear. &c. under tn
o name of the Defender Manufacture
\ Company. which company was owned an
z controlled by the H. b. Clafin Company
g was another venture which appears I
$ have been operated at great disadvantage
In producing such staples as sheets an
n pillowcases in particular. which, as ever
! merchant knows. are put out at an ex
,. ceedingly small margin of profit, the CON
i oany had to compete with the manufac
n turers OF the fabrics, who in many case
$ are themselves manufacturers OF the m
!, lshed article and were thus directly CON
;, peting with the Claim company. whic
concern had to buy its materials
s more recent attempt to individualiz
= departments was in the application or
trademark to very large and compre
!, hensiye line OF fabrics. which were pun
y chased from many diversified sources, &C
u companied by an extensive publicity can
u paign In national publications. electri
% light signs, &c, with view OF estaohsf
&c ing a national demand for these trade
=, marked materials
Other Efforts to Meet Changes.
y In the endeavor TO cope with the sitl
& alton the II. Il. Claim Company mad
y a change in its selling system re
Y. wears ago. Instead of depending largel
y on the general salesman for the develol
ment OF business, 1t organized speci'
.e corps Of department statesmen. II furth'
a segregated Its scheme Of selling, 30 th'
ID the Importance OF each individual depar
ment would be magnified and the retail'
Of would be approached from new angle.
~ being considered important that he shou
t consider the II. B. Clafiin Company I
% manufacturer and specialist and shou
he regard each of Its departments as beir
'e specialized to a high decree ana IN su.
a manner as to make II prontaole Tor u
c. retailer to consider II In his purchases
a This venture. showed an aggressive al
" characteristic spirit. Had II not maj
~ these vigorous attempts 10 sustain
position and Importance In the trade q
chances are that IL would long ago ma
M succumbed as did the other New 70
q houses above named.
ne
al Retail store Ownership.
n The CIafiin company. however. as abo
u suggested, went a step further than I
mere reorganization of its selling methot
&c 1t endeavored to protect its market
'y securing individual or important own'
by shin interests Of retail stores In We
". considerable number Of centres.
ey The ownership relation Is exceeding
as complicated. The II. b. Claim Compa
ss "a corporation succeeding II. H. Cfar
IN & Co.-was organized about 1890.
er A majority OF this stock Is owned by !
IS Associated Merchants Company, Will
ne corporation itself owns the controlling
terest In a certain group OF retail stor
se all important and located In some OF !
o. principal cities OF this country. The
r. sociated Merchants Company has a ca
h italization OF approximately $l7,00O'OOO
on The third corporation--the United ID