Corporations: Jumpers at Jonathan Logan

The rag business, as the $12 billion-a-year garment industry dubs itself, is stretching out. In the lofts above the pushcart pandemonium of Manhattan’s Seventh Avenue, Italian seamstresses have given way to Negroes and Puerto Ricans, and in carpeted executive suites, the district’s predominantly Jewish chiefs proudly point out that more and more young gentiles are coming in as junior executives. The most significant change, however, is that giants are beginning to appear in an industry where the average firm has 40 employees. Biggest of them all is Jonathan Logan, Inc., whose sales, running 34% ahead of last year’s, are expected to reach $80 million in 1962.

Jonathan Logan has brought modern management methods to a colorfully confused industry. In a business where buyers traditionally go to sellers, Jonathan Logan has more than 60 button-down salesmen constantly visiting the trade, testing trends, reporting on sales. At its new distribution center in New Jersey, a Univac computer sorts and digests day-to-day orders according to models, shades and sizes; with it, the company can toss out slow sellers or step up production in a hurry. Jonathan Logan even has its own C46 transport airlifting fabrics and finished goods to and from its 28 plants around the U.S., has sliced ten days off delivery times.

Everything for Junior. In real life there is no “Jonathan Logan.” The name was invented by Founder and President David Schwartz, 60, a grey-haired, broad-browed, restless man with a voice like the horn on a Staten Island ferry. Born in Harlem to Russian immigrants, he broke into the rag business 47 years ago as a messenger, has become one of its wealthiest titans. He roams and roars through Jonathan Logan’s head offices, darting into showrooms to glad-hand buyers, dashing into design rooms to tug at fabrics and study new lines. He is kindly but curt. “Do me a favor,” he shouts to an interloper in the company’s design rooms, “and get out.”

When Schwartz started his own company in 1924 with $7,500, he decided to concentrate on the “junior” market. Juniors are worn by fewer than 20% of U.S. women, but those women buy 35% of all the clothes. Jonathan Logan’s trademark is the “simple” dresses of basic style that can be worn more than one season. “Paris sets the trends, but we execute them,” says Schwartz. While most Jonathan Logan clothes have junior-sized prices of $14.98 to $29.98, Schwartz also has lines (Butte Knit, Youth Guild, Junior Accent) that retail, after the stores’ usual 60% markup, up to $80.

Schwartz has ridden the postwar trend to national style in fashions and materials. “Take a dress like this,” says he, fingering a “double-knit” wool sheath. “You can wear this in Nova Scotia or you can wear it in Atlanta when the temperature is 107 degrees.” Schwartz and his Cornell-educated son Richard, 24, Jonathan Logan’s executive vice president, now show new lines in Dallas or Minneapolis before they show in New York, discard models that go over poorly outside Manhattan.

Pacemaking Jonathan Logan also is a leader in the technology of garment making. Its factory at Spartanburg, S.C., is in a mechanical sense the industry’s first “integrated” plant. “Raw wool in one door and finished dresses out the other,” beams Schwartz.

On to Wall Street. To raise working capital in a business where inventories are high and accounts receivable often precariously higher, Schwartz has brought off some imaginative deals. Two years ago, Jonathan Logan merged with Montana’s moribund Butte Copper & Zinc Co., took over its assets, earned $2,700,000 after taxes. Through Butte, Jonathan Logan got a listing on the New York Exchange (current trading symbol: JOL), became the first ladies’ ready-to-wear maker to make the Big Board. The highly competitive garment business had been suspicious of “going public” because that requires a company to publish intimate financial details. But after Schwartz showed that public listing also opens better lines of credit, there was a rush from Seventh Avenue to Wall Street. Schwartz’s nearest competitor, Bobbie Brooks (’61 sales: $44 million), has become listed, as have several other gar-mentmakers.

Several years ago Schwartz considered retirement, but his subordinates, as he tells the story, twisted his arm to remain because “the company would make more money if I stayed on.” Now he is determined to stay at least until Jonathan Logan cracks the trade’s version of a sound barrier—the $100 million sales year.