Chain Stores

The issuance last week of the annual reports of the two leading American chain-store companies-- the F. W. Woolworth Co. and the S.S. Kresge Co.--again demonstrated extraordinary profits earned in recent years by this class of merchants. Woolworth last year enjoyed the benefits derived from the splendid profits made in 1922, when net income of $18,324,399 and surplus of $22,038,950 enabled the company to retire its preferred stock, reduce its good will item by $20,000,000 and still have a surplus of $10,663,349. Last year net income set a new record at $20,698,180; good will was reduced by $10,000,000 more, leaving a reserve for protested taxes of $3,000,000 and a final surplus of $ 13,161,529. In 1923, $31.84 was earned on each common share, as against $26.42 in 1922. Kresge's record was proportionately better yet, though on a smaller scale. Net income for 1923 set a new record at $9,493,988 against $6,614,972 in 1922. Last year $38.14 was earned on each common share, against $35.52 in 1922. Total sales increased from $65,191,467 in 1922 to $81,843,232 last year, but the margin of profit on every dollar also rose from 10.15 cents in 1922 to 11.60 cents in 1923. The remarkable thing about both these companies is their prosperity in boom and depression alike. In flush times, the poorer classes who ordinarily would not buy at all, flock to them; in hard years, buyers who, when prosperous, are willing to patronize more expensive stores, return to the chain stores to economize.