RETAIL TRADE: The Man at the Top

If anybody ventures to differ with me, I throw them out the window.

In this uncompromising and ungrammatical way, Sewell Lee Avery once pronounced his business credo. For 50 of his 86 years a chief executive, Sewell Avery was the epitome of the autocratic tycoon who believed there was room at the top for only one. He battled the growth of labor unions, the New Deal and his own executives. (In 24 years as boss of Montgomery Ward, he had four presidents and 40 vice presidents exit suddenly.) One of the few battles he lost was to President Roosevelt and the U.S. during a wartime labor dispute. But he refused to retreat on his own feet. It took the U.S. Army to carry him out of his Chicago executive suite, giving news photographers a famed picture—while Avery winked at a company officer.

Avery’s outspoken intransigence made headlines, but in private he was a well-read, articulate businessman capable of great charm, with a knack for making profit for his companies when all about were losing theirs. The son of a prosperous Michigan lumberman, Avery got his law degree from the University of Michigan in 1894. By 1905, at the age of 31, he was president of U.S. Gypsum. He built it into one of the biggest U.S. building-material suppliers, and, convinced in the late ’20’s that the U.S. economy was headed for a depression, so prepared U.S. Gypsum to weather it that the company was able to show a profit every year of the ’30’s.

No Hicks. This performance so impressed J. P. Morgan & Co. that the banking firm asked Avery to take over an ailing Montgomery Ward in 1931. Avery quickly put his rough brand of rugged individualism to work at Ward, in three years turned a $9,000,000 loss into a $9,000,000 profit. Avery’s method was to cut costs, introduce higher-priced lines of merchandise for the mail-order chain, because “We no longer depend on hicks and yokels. We sell more than overalls and manure-proof shoes.”

Avery’s troubles with the U.S. Government in 1944 grew out of his militant resentment of the New Deal. In 1942 he had reluctantly signed a C.I.O. contract, which required him to check off union dues. An enemy of the closed shop, he refused to renew the contract in 1944, and Roosevelt reluctantly seized control of Ward. Avery refused to relinquish control to a U.S. marshal, and U.S. Attorney General Francis Biddle hurriedly flew to Chicago to preside as two G.I.s carried Avery out of his office. As he was carried away, Avery flung the ultimate epithet at Biddle: “You New Dealer!” No Depression. When the war ended, Avery was convinced that the U.S. was headed for another depression, refused to open a single new store, began hoarding Montgomery Ward’s assets until he had $327 million in cash and Government securities and $608 million in working capital stashed away for a rainy day that never came. But the rainy day came for Avery as Ward’s earnings began to decline after 1950. Though he won a proxy fight and proved that he was still the champ, Avery resigned three weeks later to live quietly in retirement.

Montgomery Ward then began an expansion program that used up Avery’s hoard. Last August, Avery could draw a measure of quiet satisfaction from the fact that Ward’s new free-spending management, faced with six-month earnings of $5,000,000 v. $10 million the first half of 1959, had to halve Ward’s quarterly dividend. Last week, just a few days be-fore his 87th birthday, Sewell Avery died of a cerebral hemorrhage.