Stores Worst Hit, B-School Expert Claims

Department store profits during 1951 fell of more sharply than those of almost any other type of big business, Malcolm P. McNair, Lincoln Filene Professor of Retailing, said yesterday. Compared with the previous year, the net dollar earnings suffered a 39 percent drop.

McNair discussed this situation while presenting the annual Harvard report at the meeting of the Controllers' Congress of the National Retail Dry Goods Association.

Profits were slashed further by a necessity for heavy markdown because of an "injudicious" surplus of merchandise stocks and stringent OPS price controls.

As a result, the final net earnings of department stores after taxes amounted to only 2.3 cents out of the consumers dollar 4 cents on the consumer's dollar to be a reasonable sales goal.

"The conclusion seems inescapable that many department stores in 1951 did not realize enough profits to maintain their economic health." McNair concluded.