Traveling Man

Walter E. Schott, 50, is a Cincinnati businessman who likes to collect companies. Fortnight ago he called reporters and announced: "We've just bought the Bunell Machine & Tool Co. of Cleveland for $1,750,000." Next day Schott called reporters again. This time he had paid $1,000,000 for the Novo Engine Co. of Lansing, Mich. This week, Schott's speculative eye was already on a new prospect. By such hustling and sharp buying, Schott has put together a family holding company with enterprises worth an estimated $20 million and controlling some 26 companies spread over the U.S. and Canada.

A typical Schott deal was his purchase late in 1949 of the Royal Vacuum Cleaner Co. for $2,000,000. By vigorously pushing low-priced lines and reorganizing distribution, he increased monthly sales from $500,000 to $1,000,000, paid back the $600,000 he had borrowed from the bank in five months. He has his own rule for financing a new business: clean up the bank debt by the end of a year with profits from other companies.

The Banks Are Paid. When he was still in high school at Cincinnati, Walter Schott got some horse-trader's advice from his father, a cattleman: "Be a salesman, always a salesman. Even if you're buying, be a salesman." Schott never forgot the advice. At 18 he hustled off to Richmond, Ind. with his 15-year-old bride, got a job as an auto salesman.

Four months later he persuaded a bank to lend him $10,000 to go into the auto sales business himself. In a short time he hit on the idea of buying new cars at reduced prices at the end of the year just when the models were about to change, and selling them well under list prices. Before long his salesmen and brash advertisements were covering the Midwest.

By 1938, he was Ohio's biggest auto dealer, with a large stock interest in Willys-Overland.

But he wasn't satisfied. An investment company which Schott had formed earlier with his wife and a brother bought Cincinnati's J. A. Fay & Egan, manufacturers of woodworking machines, for $700,000. Fay & Egan was in poor shape because of overexpansion, but by cutting down and changing the management, the new owner soon had it on its feet. From then on, Schott's investment company began picking up companies and real estate. In ten years he gathered up more than 18 new businesses, including Whale Harbor Spa (a Florida fishing resort), Columbia Axle Co., U.S. Air Compressor Co., Stratbury Manufacturing Co. (overcoats), Farm Tools, Inc.

"We're Fascinated." Schott insists on getting full control of any company he buys into. Once, in 1941, he joined a group dickering to buy New York's Belmont Plaza Hotel. Schott thinks that it was for lack of control that he took a $100,000 loss when the deal went sour. When he knows he can get control, he moves fast. His method: "Don't jump until you have something to jump for, then jump with all your might."

To run his widely spread empire, Schott splits up the job of supervision with his four brothers, has no intention of stopping collecting. Says he: "At first it was family security. But suddenly we gained momentum and we started to roll. Now we're fascinated. We expect to keep traveling."

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