Business & Finance: Macy’s in Wilkes-Barre

Manhattan’s R. H. Macy & Co. sells under its own brand name in its famed department store some 3,000 articles including bicarbonate of soda, Epsom salts, witch hazel, face powder, lipstick, milk of magnesia, shaving cream, peroxide, cascara pills. Last week a consignment of 48 of ”Macy’s Own” drugs and cosmetics, including those named, arrived not at Broadway & 34th Street but in Wilkes-Barre, Pa., where it soon filled a large window and several counters in the “Boston Store” of Fowler, Dick & Walker. Wilkes-Barre citizens, dripping from an all-day downpour, bought 15% of the shipment on the first day. For retailers in general this was interesting news. For manufacturers of “national brands” it was the latest package of perturbation from Macy’s. Tentatively, but none the less clearly, the department store had entered their own field.

Macy’s insisted that it was all an experiment, a response to continual requests from out-of-town department stores whose patrons supposedly make many a trip to New York to stock up at Macy’s. To give them a kind of room service and oblige local shopkeepers Macy’s set up a new corporation, Supremacy Products, Inc.. under President Percy Selden Straus’s eldest son, Ralph. To a selected store in each trading area Ralph stands ready to sell “Macy’s Own” merchandise “price free,” i.e., to be marked down or up as local conditions require. Some of Macy’s 8,000 branded articles are made to order for the store, others by Macy’s own factories in Long Island City.

In Manhattan, Women’s Wear Daily, glad rag of the garment trade, found national brand manufacturers skeptical of the success of Supremacy Products. Why, they asked, should any store carry Macy brands instead of developing its own? If Macy’s really proposed to compete with national brands how could it do so without spending a great deal of money in national advertising? One obvious reason, however, for the move on Macy’s part was that the more of its own goods Macy’s could dispose of—wholesale or retail—the lower its production costs should be.

Most bumptious reaction came from the American Booksellers Association, still glowing from Doubleday, Doran’s triumph over Macy’s in the court battle on New York’s Fair Trade Act (TIME. March 22). In solemn glee A. B. A.’s Counsel Crichton Clarke called a stenographer, dictated a statement pointing out that no stores in Macy’s own trading area would be favored with the new service. “Macy’s does not care how much its private brands are cut in other markets,” said Mr. Clarke, “but it will not permit them to be cut within its own trade area. … If this is not an acceptance by R. H. Macy & Co. of the principle of price maintenance within its own trading area, I certainly wish Mr. Ralph Straus or Mr. Q. Forrest Walker, Macy’s economist, would explain what it is.”