CORPORATIONS: Song of the Shirt

Cluett, Peabody & Co. Inc. is the biggest U.S. maker of brand-name shirts (Arrow), but its largest single source of profit is not from shirts at all. It is from “Sanforizing,” a process for pre-shrinking fabrics now used for almost all U.S. cotton clothing. Last week, Cluett, Peabody invited a group of bigwigs to its Troy (N.Y.) home to look at a new $1,000,000 research laboratory and two new processes designed to 1) prevent wool from “matting,” thus making it easily washable, and 2) pre-shrink rayon as Sanforizing does cotton.* Cluett, Peabody also showed off a new president: youngish (41), ruddy Barry T. Leithead, up from vice president in charge of sales to replace Chesly Robert (“Bob”) Palmer who, at 65, had decided to take life easier. (He will remain a director.)

Leithead (rhymes with wheat bread) is Palmer’s choice. Since 1929, when he went to work for Cluett, Peabody as a floor salesman in Chicago, he has run the San Francisco and New York offices, and put in the past year as boss of sales. Leithead has a salesman’s persuasive tongue, the casual manners of an ex-cowhand (he worked on his father’s ranch in Lovell, Wyo.), and a vague distrust of Eastern ways. (Until he took up foxhunting in Westchester County, N.Y., he would not ride anything but a Western saddle.) When his son Roger reached college age, Leithead, who went to two colleges (Drake and Northwestern) but never graduated, sent him to Iowa State, saying: “The Ivy League isn’t worth a darn so far as making a man out of you.”

Death of a Hero. The president’s collar was quite a thing to wear. When Palmer took charge of the company in 1929, it was wilting badly. Cluett, Peabody sales, which reached a peak of $32 million in 1919, had been based on the Arrow Collar, as worn by women, and the clean-shaven, cleft-chinned Arrow Collar Man, a creation of Artist Joseph Leyendecker. From a million billboards and car cards, his coldly correct profile mounted on an Arrow choker gave feminine hearts a guide to male perfection. Like his culture mate, the tightly corseted Gibson Girl, the Arrow Collar Man disappeared from ads as men turned to the soft, collar-attached shirt. Cluett, Peabody almost vanished with him.

Birth of a Giant. Palmer switched the company from collars to shirts. Sales fell at first, to a depression low of less than $10 million in 1932, but under Palmer’s vigorous pushing of the new product they soon recovered. The company was also lucky in its Vice President Sanford Cluett, the original families’ only remaining executive. Cluett was an experiment-minded man. His tinkering had turned up Sanforizing.* Palmer plugged it hard.

As shirt sales climbed, so did the royalties from Sanforizing. This year the company’s income from the Sanforizing royalties is running at a rate of $7,000,000—just about equal to the probable 1948 net on its $82 million gross. With, the new wool and rayon processes, it hopes to step up its royalties still more.

*The rayon process, called Sanforset, was developed by Cluett, Peabody; the wool process, still unnamed, was licensed from its British developers, Stevensons Ltd. and Woolsey Ltd., and treats the wool with a “secret” chemical.

*In weaving and finishing, cotton cloth stretches as much as 5 to 10%, shrinks back when it is washed. Sanford Cluett’s process shrinks it without washing, by passing it through a machine that compresses the fibers.