Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-02-07

during the course OF year, and then
the following year would drop back
close to its old low and repeat the
process again.
Enters Chain Store Field.
In 1927 a new management took
control of the company. After some
of the improbable lines had been dis
continued, the company undertook an
extensive expansion program. The
Charles Wilson Stores, Inc, were pur-
chased for cash out of assets, an
acquisition which should increase sales
about one-third. More recently the
company has proposed split-up of its
own stock on a 3-for-1 basis and a
merger with Kinnear Stores, operating
| a chain of % general merchandise
stores in the Middle West.
These changes will mean that a
company we'll established as mail
order garment house will step into the
general merchandising field. Last years
profits totaled $10.67 share and bet
ter is expected for 1929 with the en-
larged company.
The cratic fluctuation Of stock prices
and earnings in the past, however, has
led many to believe that present price
of the stock had gone far toward dis
counting prospects for the immediate
future. On the other hand, the entire
garment industry has been so complete
ly Debated during the last few years
that further defiation seems unlikely.
Sears Roebuck.
Sears Roebuck, the country's leading
mail order house, has expanded rapidly
during recent years. Instead of one
mail order house, Sears Roebuck now
has 10 operating in strategic points
throughout the country and has so
solved mail distribution that it now pays
parcel post charges for its customers.
Its mail order business has shown
steady expansion for years.
But the greatest forward step has
been in the chain store field. To-day
Sears has 81 large department stores
selling a wide variety of articles and
operating in the larger cities Of the
country. In addition it has $50 small
retail stores selling lines of merchan-
disc which vary according to size OF
the store. Some stores carry a very
complete line Of merchandise, others
only auto accessories and radio. This
expansion into the chain store field has
placed Sears stock on basis where 1t
sells at prices comparable with other
chain store stocks which are financing
expansion of earnings.
During the last seven years Sears
earnings have averaged $3.50 share,
| and today it is paying $3.50 in dividends
and small quarterly stock dividends.
While net earnings have not increased
in the last two years at as fast pace
as gross business, this is due to the fact
that a large part of earnings are used
for expansion and the cost" of OPEN
ing doors" of new retail stores have
been absorbed in current expenses. It
Is stated that larger earnings are in
Srcspect in the future. 1t is extremely
difficult to tell whether or not the rise
of the stock from so to ITO during the
last two years has discounted the pros
poets for the immediate future.
Montgomery Ward.
Montgomery Ward, the Oldest and
second largest mail order house in the
country, also decided about 1927 that
the saturation point for mail order
sales had been reached. The motor
car had made it possible for farmers
to travel easily for considerable dis
tances to shopping centers.
Whereas Sears Roebuck started its
retail stores in the city field, Ward
conceived the idea of chain Of gen.
eral merchandise stores to serve its
CouoUlloltCO CiiCAAtVAS la CA4C OOuAie1 "
Ward had nine separate mail order
houses In different sections of the
country, and recently to supplement
these has established during the past
two years $50 stores in the smaller
cities. BY 1891 the company expects to
have 1900 of these stores. Recently,
too, Ward has established stores in
larger cities and now has 81 retail
department stores in the larger cities.
In the past seven years Wards earn
ings have shown steady expansion,
averaging about $2.92 on the basis of
the present stock, which last year
earned SAT- share. The spectacular
rise of the stock makes one more
critical Of the future prospects. If the
company sticks to its progressive pro-
gram and is able to maintain its pres
ent margin of profit in the new in
dustry, the company'S earnings in three
| years hence should run between Sc and
! $11 share. With the stock selling at
| present prices, some feel that much of
| the future expansion has already been
| discounted.
Looking over the three mail order
houses which have entered the chain
store field, 1t does appear that on the
basis of known facts the future has
been rather well discounted. It should
| be remembered, however, that the
prices of chain stores stocks have q
strange way of rising steadily while
expansion Of stores in the chain goes
on, but of slowing UP appreciably once
| the expansion has been completed.
+ (Copyright, 1920