Schulte & Specialties

The 541 cigar stores of United Cigar-Whelan Stores Corp., which dot the country like an attack of measles, have long been filled to bursting with Mickey Mouse watches, G-Man automatics, shoe trees-- and only incidentally, cigars. Last week Schulte Retail Stores Corp. announced that it was no longer confining itself to tobacco, was opening its shelves to just about everything else.

Schulte Retail Stores Corp. has had its ups & downs--or more precisely, one up & one down. It controls Huyler's as well as the 268 Schulte shops mostly on U. S. street corners. President David Albert Schulte is also president of Dunhill International, Inc. and with associates controls Park & Tilford. In 1926 Schulte Retail earned over $6,000,000 on total assets of a little more than $40,000,000. And yet in 1936, though its customers were smoking more furiously than ever, Schulte Retail Stores filed for reorganization under the Bankruptcy Act. Reason was Mr. Schulte's tendency to lease too much real estate. In his 47 years in the cigar store business Mr. Schulte has developed an uncontrollable passion for corner sites. In 1925 he paid $6,000,000 for a corner in Manhattan's Times Square, put a shop on it to sell cigarets at a pipsqueak profit per package. Mr. Schulte's great attachment to real estate has not been entirely irrational. Once he bought the Aeolian Hall, then on 42nd Street, and sold it two weeks later for $1,000,000 profit.

That sort of thing was Horatio Alger justice, for Mr. Schulte has worked hard all his life. At 15 he started as a clerk in a Sixth Avenue drygoods store. Two years later he went to work as a cigar clerk for his brother-in-law. A partner at 25, he owned the firm and its five stores two years later in 1900. There were soon more stores and diligent Mr. Schulte, working hard in a dingy Manhattan office, paid less & less attention to tobacco, more & more to real estate. In 1926, which is the year Mr. Schulte's story would end if Horatio Alger had written it, the Schulte Real Estate Co. made almost $2,000,000, and Mr. Schulte was drawing profits as well from a lot of other real estate companies. But by 1936 real estate did not seem such a good investment.

In 1928 Mr. Schulte, Whelan Drug Co. and United Cigar Stores Co. got together and started 59 Schulte-United 5-c--to-$1 stores throughout the U. S. United Cigar got out of that just before the 1929 market collapse and in 1931 Schulte-United slipped quietly into receivership. Now there are only 20 Schulte-United Stores, none of them in New York.

Mr. Schulte's new Manhattan "specialty shops" are really an attempt to brighten up the old 5-c--to-$1 idea. To avoid burning his fingers again, David Schulte is making the transition slowly, has imported Stanley Roth, slick merchandiser, from the Golden Rule Department Store in St. Paul, Minn., made him a vice president. Said Mr. Roth: "I think most persons will be surprised at the large number of things we can get into a relatively small store." Most persons who visited the sample Schulte store at Manhattan's 86th Street & Broadway were surprised. Mr. Roth had filled it with 175 items, from the Victory Band Harmonica to cocktail shakers, had arranged them neatly in good department-store fashion. Two more of the new stores will open in Manhattan before the end of the year.

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