• U.S.

Business: JOHN ANDREW BARR

4 minute read
TIME

Modern Retailer

JOHN ANDREW BARR, 51, handsome Hoosier, is the best proof in U.S. business that ugly ducklings do indeed turn into swans. As a vice president, secretary and legal counsel for Montgomery Ward & Co. under depression-minded, penny-pinching Chairman Sewell Avery, Barr was as undistinguished as a duckling; his chief claim to fame was that he showed a rare ability to survive the purges and resignations that cost Ward’s five presidents and 30 vice presidents in 23 years. Barr managed to stay by avoiding open conflict with Avery, kept quiet about things that he knew he could not change. This led many an outsider to tab him as a yes man without an idea of his own. But when Avery was forced to resign in 1955 and Barr took over, he dazzled the retail industry with the suddenness of his transformation. As he spread his wings, he junked all of Avery’s policies, started Ward’s on one of the biggest expansion programs in U.S. industry. For the last year, the company has been opening new department stores at a record rate. In the last month alone Barr has overseen the opening of new stores in Richmond and Oakland, Calif., and the company’s largest store in Detroit’s suburban Livonia shopping center; he plans to open stores in Abilene and Tyler, Texas within the next months. Ward’s sales reflect the growth: last week the company announced eight-month sales of $756,071,243, a 14% hike over last year. By year’s end. Ward’s hopes to hit a record $1.25 billion.

WHEN Barr took over, Ward’s itself had an unpromising future. Fearing a crash, Avery had piled up a huge reserve of $327 million in cash and Government securities, but in every other way the company was sick. Says a Ward’s executive: “Avery was actually liquidating the company, though he didn’t realize it.” Avery had hobbled the entire firm with his one man rule (he had to okay every expenditure over $100), and knocked employee morale to the bottom. Net sales dropped from $1.1 billion in 1950 to $999 million in 1954. Barr set out to sweep out gloom, bring on a boom.

He brought in more than a dozen top executives, plucking them away from such firms as Revlon, Macy’s and Marshall Field with generous stock-option plans, and he gave employee morale a quick boost by putting in a new pension plan. He reorganized Ward’s management structure, bolstered confidence by delegating authority, scrapped Sewell Avery’s outlandish rules. He began to change Ward’s cash hoard into merchandising strength in 1955, since then has redecorated nearly 376 of the company’s 566 stores, air-conditioned 73 of them, opened more than 296 new catalogue stores in growing areas. To increase volume quickly, he bought control of four independent stores in the Chicago area, opened some 20 new modern retail stores in major shopping areas and equipped them with consumer-drawing features that would have shocked Sewell Avery: check-cashing booths, hunting and fishing license departments, gourmet and shoe-repair shops. By the end of 1958, Barr had reduced Ward’s cash hoard from $327 million to $94.7 million. Says he: “By the end of 1959, we will have put all of our excess cash, previously invested in low-earning securities, to work in higher-earning merchandising assets.”

SOME stockholders grumble that Barr has spent so much on expansion that earnings have suffered (they dropped below 1957 in 1958). But Barr argues that money spent now will bring benefits in higher profits later. The rise has started. Earnings in the first half this year jumped to $10.6 million from $8.6 million last year. In the next five years, Barr plans to spend $500 million on expansion. By 1963 he expects sales to be running at $1.8 or $2 billion a year.

Trained in the law at Indiana University (’30), Barr joined Ward’s legal staff in 1933, proved his skill by helping to prepare the case that eventually voided President Roosevelt’s seizure of Ward’s during a 1944 labor dispute and masterminding the successful proxy battle against Raider Louis Wolfson in 1955. Barr still admires his old boss, refuses to criticize him. Says he: “He was one of the nation’s best merchandisers. He grew old, that’s all.”

Barr’s transformation has also wrought changes in his personal life. He has less time to spend with his wife and four children, putter in his rose garden. He spends evenings poring over work in the library of his twelve-room house in suburban Winnetka, Ill. His life has become almost as self-centered as Avery’s on the contents of a secret closet in his Chicago office. The closet contains charts of the company and the U.S. economy. In Avery’s time the projections all went down; now all the lines go sharply up.

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