Avery's Deal

All stores last year showed declining sales. Last week Montgomery Ward, no exception, issued its report showing sales for the 13 months ending Jan. 31 down to $176,000,000 compared to $211,000,000 for 13 months ended a year earlier. Significant, however, was the fact that the company's deficit fell from $9,737,000 to $5,687,000. Credit for this goes to Sewell Lee Avery, able head of U. S. Gypsum, who a year ago, nominated by J. P. Morgan & Co., was made president of Montgomery Ward. He promptly scrapped retail stores, deadwood personnel, obsolete merchandise, last summer put out a catalog divided into departments like a department store (with prices cut 18% to 25%) and displaying merchandise with style.

Quiet Sewell Avery, one of Chicago's leading citizens, able conversationalist, last week looked well worth what he costs his stockholders. His salary was not given but in his report he disclosed what had been the chief inducement offered him to take the job: an option to purchase 100,000 shares at $11 a share. He furthermore disclosed how the company got shares that it holds in its treasury against his option: 43,117 were repurchased with 5% interest from employes who had bought them on stock subscription plan--thereby saving the employes from loss; 49,178 shares were purchased last year in the open market at an average price of $8.43 a share. Thus did the company not only support the market for its stock but also placed itself in position to make a profit of $126,000 if & when Mr. Avery exercises his option. Moreover on the day when Mr. Avery became chairman of Montgomery Ward the stock of the company was sold at $10.25 or 75-c- under the option granted him, thus any other stockholder stood to make more on appreciation of the stock than Mr. Avery. With

Montgomery Ward selling last week at 12 1/2 Mr. Avery had a profit of $150,000. If it goes up to 21 he will have $1,000,000 profit.*

* In 1921 when Sears, Roebuck was in difficulties Julius Rosenwald made that company a gift of 50,000 shares of its own stock then worth about $60 a share. The gift was conditioned by an option to repurchase at $100 a share. Later he exercised the option when the stock was selling at $235, made $6,750,000.

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