• U.S.

Business: Commuters’ Merger

3 minute read
TIME

In 1862 a hard-fisted Vermont pioneer named Albert Arnold Sprague bumped out to Chicago in a covered wagon and went into the grocery trade. With his brother and another Vermonter, Ezra J. Warner, he formed the wholesale house of Sprague, Warner & Co., which grew with lusty young Chicago. Sprague Warner was a pioneer in the packaging of food, and its Richelieu brands became more famous than the hotel for which they were named.* By the time the second Ezra J. Warner died in 1933, Sprague Warner was a far-flung manufacturing and wholesale house, as prestigious as Manhattan’s Charles & Co. or Boston’s S. S. Pierce, and a good deal bigger than either.

Meanwhile, two smart Philadelphia Jewish boys named Harry and Maxwell Kunin had rolled out to Chicago in a Pullman and gone into the grocery trade. With their father they opened a small store, branched into manufacturing and wholesaling, did a $250,000 gross business in 1919, their first year. Paying workers on a Bedaux-like bonus system, concentrating on relatively few (2,000) items and selling them cheaply, Samuel Kunin & Sons, Inc. grew fast. Last year they grossed nearly $5,000,000—a third as much as lumbering old Sprague Warner, which was having tough going with its 11,000 items (including 84 brands of coffee), its 550,000-square-foot Chicago plant, its warehouses in 18 cities.

Harry Kunin wears a gardenia, its stem in a phial of water. Daily he commutes between Chicago and suburban Highland Park, where he has a landscaped “farm” complete with boat landing but no boat (“You’ve never seen anything like it outside of the movies,” says Brother Max). One day last year Harry Kunin found himself sitting on the train next to chubby-faced young Thomas Charles Dennehy Jr., who had married Founder Warner’s granddaughter and got to be Sprague Warner’s executive vice president. Tom Dennehy dresses like a farmer, lives in swank Lake Forest; farming and sailing are his hobbies.

Groceryman Kunin jokingly proposed a merger: “With your brand names and reputation and my business methods, we can go places.” Groceryman Dennehy laughed it off. But next time the two met on the train they joked some more about a merger.

Last week the merger was a reality. Engineered by clever Tom Dennehy, who became president of the new Sprague Warner, it gave both companies what they most needed. Harry and Maxwell Kunin (who became secretary-treasurer and vice president) got bigger manufacturing and distributing facilities, the prestige of Sprague Warner’s name. Sprague Warner got the Kunins. Nobody put up any money. To reports that he had bought out Sprague Warner, Harry Kunin replied: “Where the hell would I lay my hands on $3,000,000?”

*The Richelieu’s owner, a Colonel Bemus, used to trot around to Sprague Warner’s to sample before buying. Anything the sniffish colonel approved was dubbed “Richelieu” as a mark of distinction.

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