CORPORATIONS: Darting Ahead

Superficially, the news from Dart Industries might seem to foretell deep trouble. The Los Angeles-based company has sunk $75 million into recreational-land developments in California, and has been stymied in selling many lots by conflicts with environmentalists; on top of that, it is being sued for a total of $500 million by buyers alleging fraudulent land-sales practices. Even so, Chairman Justin Dart found a “plus factor” to report to New York security analysts in a recent speech. The plus, said Dart, was that “we’re not planning any more developments of this type.”

Dart’s report was much more than a bit of gallows humor. Despite its troubles in land development, Dart Industries is rolling toward a 1973 net profit that is estimated by its chairman to be 14% higher than the record 1972 earnings of $53 million registered on sales of $888 million. Main reason: high earnings in the Tupperware plastic-container division and the chemicals division. In fact, in an era during which “conglomerate” has become a dirty word on Wall Street, Justin Dart has put together one of the few conglomerates that are continuing to post steady growth in sales and profits.

The big factor in Dart Industries’ success has been Tupperware, acquired in 1958 by Justin Dart over the initial opposition of his own board of directors. Since then, Tupperware sales of plastic food containers have multiplied 18 times to $187 million in 1972; its earnings currently contribute 50% of Dart Industries’ net profits. Tupperware products are sold by self-employed dealers, mostly housewives, who peddle the plastic food containers at home demonstration “parties.” In order to maintain the evangelical zeal of the distributors, Dart regularly holds sales jubilees at which the most successful of the housewife-saleswomen are awarded such prizes as new cars, microwave ovens and all-expense trips to London and Tokyo with their husbands. Of late, Dart has found the seemingly all-American formula quite as valuable overseas: Tupperware has been expanding abroad, and per capita sales in France now surpass those in the U.S.

Refreshing Tendency. Tupperware is not the only ingredient in the Dart success formula. The company’s crack chemicals division, which is expected to show a 40% surge in profits this year, was put together in 1960 to produce polyethylene. It now has 170 U.S. and 460 foreign patents. Both G.E. and Exxon have become licensees. More important in Dart’s view, the division contributes product technology to the company’s other units, like Tupperware. By merger, Dart has also moved into fabricated plastic products and glass bottles.

Along the way, the chairman has shown a refreshing tendency to get out of any business that was unsuccessful—or that merely seemed ripe for sale at a profitable price. Dart started out as a drugstore clerk and rose to become general manager of the Walgreen drug chain in nine years; then he moved on through other executive posts in the drug business and wound up as chairman of the Rexall drug chain, which he turned into the foundation of Dart Industries. That did not prevent him from selling off the Rexall stores piecemeal, until today there are only a dozen left. In 1947, Justin Dart advanced $7,000 out of his own pocket to a doctor who was working on a preparation to suppress high blood pressure; the drug turned into a steady though small seller and started Dart Industries’ Riker Laboratories ethical-drug operation. But in 1970, he sold Riker Laboratories to the Minnesota Mining & Manufacturing Co. for 3M stock worth a handsome $150 million. Dart has since sold most of the stock for a profit-$10 million in 1972 alone.

Low Profile. Even now Justin Dart, a ruggedly handsome, 66-year-old, former All-Big Ten football guard from Northwestern, maintains that any of Dart Industries’ divisions are for sale “if the price is right.” Conversely, he is looking for profitable acquisitions but pledges that they will be “low profile” so as not to rile the Justice Department. In the interim he has designed an unusual management structure: Chairman Dart declines to appoint a president, holding that position himself and relying on seven group presidents who enjoy great autonomy. Says the blunt-spoken Justin Dart: “I don’t have time to louse up the operating groups and I am the only one who can do it.”