After three months of complex dealing, a giant new corporation shouldered its way last week into the top ranks of low-priced specialty chain stores. The new company, the McCrory Corp., was formed from three chains—the B.T.L. holding company (a corporate shell of the Butler Brothers variety chain), United Stores Corp., and the McCrory-McLellan Stores Corp. With 461 stores, the new company will rank fourth among U.S. low-priced chains (first three: F. W. Woolworth, W. T. Grant, S. S. Kresge). The man who masterminded the merger is Meshulam Riklis, 36, who in only nine years has risen from a part-time, null security analyst, who had to teach Hebrew on the side to make ends meet, to boss of the big Rapid-American Corp.. a widely diversified manufacturing outfit. Rapid Riklis, who will also be president of the $120 million McCrory Corp., plans to keep right on moving fast. Says he: "This is a strong company. We have $40 million cash in the till. We are going to expand and diversify."
Higher Mathematics. Born in Turkey and raised in Palestine, Riklis came to the U.S. in 1947 with his wife and daughter, got a B.A. in mathematics at Ohio State University in 1950, stayed on for 18 months as a graduate student in the business school. He got a job as a security analyst in the Minneapolis brokerage firm of Piper, Jaffray & Hopwood, quickly impressed clients with the way he could spot a company's potential earning power. With a small group of backers, his first venture was buying a big block of stock in Cincinnati's Balcrank Inc., a maker of equipment for service stations. When his group sold out a year later, it almost doubled its money.
When Riklis' group began buying into Gruen Watch Co. and gained seven seats on the twelve-seat board, a squabble broke out. Riklis got out, saying: "I do not like to fight." His group bought into Cincinnati's Rapid Electrotype Co., a maker of mats and printing plates that was worth $3.800,000 and had liquid assets of $1,900,000. Riklis then issued debentures to raise $6,500,000, used part of it to get the controlling interest in another firm he was acquiring—Chicago's American Colortype Co., a producer of color plates. His next attempt, to gain control of Smith-Corona, failed.
Mystery Money? Wheeling and dealing, Riklis merged Rapid Electrotype and American Colortype into Rapid-American, took over as president and chairman. As he bought up other companies to merge into Rapid-American, Wall Street wondered about the source of his funds. Riklis contends that he has behind him "no mystery money, no unnamed associates, no Swiss-bank money."
But Riklis did have well-placed friends. One of them, Beverly Hills Investment Banker B. Gerald Cantor, a director of both American Colortype and Butler Brothers chain stores, tipped off Riklis that Butler Brothers was a good buy. Riklis bought enough Butler Brothers stock to place four men on the nine-man board. Then he sold off American Colortype's Chicago plant for $6,000,000, used the money to gain working control of Butler Brothers. The acquisition greatly boosted Rapid-American's sales. They soared from $18 million in 1957 to $225.688,405 last year, although earnings did not jump so quickly, were $859,478 this year v. $331,-902 in 1957.