Full Circle

Few businessmen have a keener sense of the economic winds than Meshulam Riklis. When the art of acquisition was new in the late 1950s and early 1960s, he was one of the canniest practitioners. In time, he parlayed nerve and some fancy forms of financing into control of a string of businesses in such diverse fields as retailing and men's wear, building products and theaters. Now that conglomerates are running into all sorts of head winds, Riklis' own interest seems to be veering from making mergers to simply managing his $2 billion annual sales complex.

Last week Riklis, 45, completed a major step in that direction. In a somewhat serpentine financial maneuver, Riklis last December had Rapid-American Corp., the keystone of his corporate complex, make a friendly tender offer designed to strengthen his holding in Glen Alden Corp. Glen Alden is a onetime coal company that Riklis has been using for acquisitions in such areas as Playtex underwear, B.V.D. shorts and, most recently, Schenley Industries. The company had been under the rather tenuous control (14%) of McCrory Corp., a retailing outfit that is 51%-owned by Rapid-American. Thus, by exchanging Rapid securities worth more than $200 million for 62% of Glen Alden's stock, Riklis consolidated his position. "We have come full circle," he said.

Learning How. By "full circle" Riklis means that he has fully recovered from the 1963 disaster--heavy losses and plunging stock prices--that almost cost him his empire. The maneuver strengthens his hand against possible attacks by other acquisition artists. It will also allow Rapid-American, which Riklis estimates earned about $10.9 million last year on revenues of $925 million, to report 62% of Glen Alden's earnings. Last year Glen Alden made a $22 million profit (up from $18 million in 1967) on sales of $788 million.

Riklis is not swearing off mergers entirely, but he is showing an unusual interest in such mundane goals as cutting costs and expanding markets. By internal growth alone, he figures that in five years he can more than double his profits, which he estimates will come to about $47 million in 1969. Since he took over Schenley (1968 sales: $550 million) last fall, he has shaved its operating costs by $10 million. He did it partly by firing surplus executives and partly by setting up inventory procedures that, he says, are at last forcing wholesalers "to learn how to order."

Mature Mail. Riklis's own managers have already learned how to live with the boss's engaging eccentricities. Chairman Riklis, whose salary came to $379,000 last year, has developed an avid taste for Postimpressionist art; Rapid's mid-Manhattan offices are filled with Fernand Legers, Francis Bacons, Roy Lichtensteins.

In the office, Riklis likes to let all but the most urgent mail mature in his in-box for as much as three months. After aging, he finds, "80% of it doesn't need to be answered." When it does, the reply is sometimes delivered verbally over the phone by a secretary. In the past, it has not paid to call back. Riklis confesses that he was in his office only 37 days last year, even though he "works all the time." Now that he is settling down to more management and fewer mergers, he may be a bit more available.

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