Business & Finance: Esquire – Coronet

Esquire -Coronet

“Infinite riches in a little room” is a quotation from Christopher Marlowe’s The Jew of Malta. Last year a Jew of Chicago named David Smart who had made a killing with a depression-born magazine named Esquire launched a miniature version in the same key named Coronet and used Marlowe’s famous line as its slogan. Last week Dave Smart made a little room for the public in the infinite riches of his publishing ventures. Having already sold 75,000 shares of stock publicly, he listed all 500,000 shares of Esquire-Coronet Inc. on the New York Curb Exchange.

A sharp-faced, kinetic, onetime merchandising counsel, Dave Smart joined with William Hobart Weintraub (now Esquire’s co-publisher) to provide the clothing industry with a trade journal, Apparel Arts, first issued in 1931. This slick imitation of FORTUNE’S format had so ready a success that Dave Smart dared to establish Esquire (“The Magazine for Men”) in the depths of 1933 depression. Its hefty size, he-man articles, sexy cartoons and drawings of flashy men’s fashions immediately found it a public favor never achieved by less flamboyant aspirants such as Vanity Fair. Despite its 50¢ price, Esquire boomed at once, last February reached a peak circulation of 610,000. For the fiscal year ended March 1937 it had a gross advertising revenue of $2,770,000, circulation revenue of $1,830,000.

According to Esquire-Coronet, Inc.’s prospectus, “The first issue of Coronet appeared on newsstands on October 13, 1936 and more than 250,000 copies of this issue and of each issue thereafter through March 1937 have been sold.” Since Coronet carries no advertising, depending solely on its 35¢ price to carry it, its circulation is not yet audited by the Audit Bureau of Circulations but last week the company claimed 400,000. For the six months ending in March, according to the prospectus, Coronet had a net income of $115,600. Esquire-Coronet, Inc.’s net income for the year ending in March: $745,000.

Despite these nice profits, Esquire-Coronet (a new corporation which consolidated Esquire Inc. and Coronet Inc. in March) has not yet declared a dividend on its 500,000 shares of $1 par stock, of which President David Smart owned outright 181,450 shares, Secretary-Treasurer Alfred Smart 83,125, Vice-President John Smart 12,500, Co-Publisher Weintraub 33,010.* To make way for the first major public financing by a publishing house since the Securities Act of 1933, Dave Smart sold to the underwriters for $13.75 a share 35,000 shares, Alfred Smart 6,000 and others the rest of the total of 75,000 shares sold to the public in July for $16. According to its prospectus, Esquire-Coronet plans soon to pay annual dividends of $1 a share.

To explain Dave Smart’s letting the public in on his company, some observers concluded that new money was needed to finance a projected new magazine, of which only the name, Ken, and the editor, Ernest Hemingway, are known details. But Tide, smart advertising trade magazine, concluded: “. . . David A. Smart and William H. Weintraub, as far as anyone could tell, were merely realizing some well-earned $1,400,000 from the coffers of their company. . . .”

*These figures do not include the shares held in various trusts in which the Smart boys and Mr. Weintraub are interested.