The Press: Simonizing McCall

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To Manhattan journalists, jittery over the folding of Collier's and Woman's Home Companion (see below), the news at first seemed a possible cause for concern. McCall Corp., publishers of McCall's and Redbook, announced a 50% cut in its quarterly dividends from 30¢ to 15¢. Though McCall's revenue was up $6,000,000 in the first nine months (to $46,116,539), earnings were down 16% to $758,276. McCall said it was saving cash "to finance future growth." What the company did not say was that the dividend cut was the work of a strong new hand that is guiding McCall.

The hand is that of West Coast Industrialist Norton Simon, 49, who controls Hunt Foods and Ohio Match Co., has major interests in a nationwide string of enterprises ranging from insurance to railroads. Multimillionaire Simon created his empire by buying undervalued companies and building them up. Convinced in 1953 that magazine publishing was being underrated as a result of TV competition, he bought stock in Curtis, McGraw-Hill, Conde Nast and McCall, decided to concentrate on McCall. Simon now controls 35% of the stock, enough to have eight men of his choice put on the 16-man board three months ago. Although Simon insists he does not have corporate control, this stock gives him what he calls "a substantial interest and influence." Convinced that McCall needed to cut its dividends and use cash to expand, Simon easily persuaded the board to agree.

Simon, who hates publicity, has supervised McCall's changes from behind the scenes. Shortly after he bought into the company, he used his influence to get $7,500,000 in long-term loans to finance McCall's growth.

The new policy has begun to pay off in growth if not yet in increased profits. Sales in McCall's pattern division rose 15% in 1956. McCall's circulation increased 242,000 to 4,756,839, along with a 5% rise in ads. Redbook, which earlier switched its appeal from fiction to articles for young homemakers, boosted its circulation 114,000 to 2,286,500 in 1956, picked up another 11% on ads.