A New Room Upstairs

When members of the potent Du Pont family began buying into Butler Bros, two years ago, many a Wall Streeter thought "smart money" had moved in, and jumped aboard. They liked it even better when the smart money brought in a smart new president, handsome, hustling G. Robert Herberger (TIME, Aug.11, 1947), a onetime clerk in St. Cloud, Minn. (pop. 25,000) who had made a big name in retailing.

But there seemed to be a considerable difference between Herberger's chain of seven small-town stores and Butler Bros., largest U.S. wholesaler of general merchandise and also operator of 170 retail stores. Neither the Herberger hustle nor the magic of the Du Pont name could get the oldtime profits out of the 62-year-old company. Instead, Butler Bros, lost $4.3 million before tax carrybacks in 1947, squeezed out a small profit last year, but dropped $287,632 in 1949's first quarter. Its stock fell fcom 15 to 7 in two years.

Everyone had different ideas on what was wrong. Some oldtimers at Butler Bros, thought Retailer Herberger had neglected the wholesale end of the business, which had been a moneymaker. Others thought he had scrambled wholesale & retail together until nobody could find his way through either. Herberger blamed his troubles on deadwood in the company --and hacked away. So many officers and employees left that gagsters called Butler Bros, the Montgomery Ward annex. Finally, aging Thomas Freeman, who was boosted to chairman when Herberger replaced him as president, quit in disgust.

Last week, Herberger looked something like deadwood himself. The board got him to kick himself upstairs to chairman. In as president went 54-year-old Bert Prall, Butler's retail boss. Bespectacled, garden-loving Bert Prall was a tougher man than he looked. Before resigning as a Montgomery Ward vice president in 1946, he had stood up for 15 years under Sewell Avery--and had long been manager of hard lines. As boss of money-losing Butler Bros., Prall might find it was still hard lines for him.

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