Henry Jacques Gaisman - Mastermind!

Discussion in 'General Shaving Talk' started by GlennConti, Aug 16, 2019.

  1. GlennConti

    GlennConti Well-Known Member

    All true. And they didn't come out of it until the baseball advertising at the World Series later. Just as good press got them out of it, bad press could have gotten them into it. Or just the bad economy after the depression and subsequent recession. It's all moot at this point for me. I am not 100% up to speed on the mid and late 1930s yet. I am trying to focus on the AutoStrop/Gillette merger and Gaisman's patent moves in 1929.
     
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  2. Rev579

    Rev579 Well-Known Member

    Sure there were issues, but to what extent were they unique "issues"?

    -Earnings decline such that all profits came from non-US operation by 1938.
    Once they were no longer the only game in town, profit margin will be shared.

    - Stock price falling 90% from its peak
    They took the world, quite literally the world, by storm. That is not sustainable.

    - Blades market share declining from over 80% in 1928 to under 20% in 1938. These declines in market share and earnings had begun after 1926-28 and simply continued on under Gaisman.
    Same as the first and second.

    - NY Stock Exchange demanding replacement of management after audits discovered Directors had knowingly overstated pre 1930 earnings and taken huge bonuses on those fanciful earnings.
    ^^This becomes the real issue^^
    Yet this issue was driven by not being able to sustain the unsustainable. Remember also, pre-1930 is also pre-Crash. The handling of shares and stocks and investments were sloppy at best. Imagine how many companies didn't survive, those companies were not audited.

    This is a fascinating time in US and Global history due to the implications the crash had on society as a whole. It was as if the economically-fed, inustrialized world when through a chemotheraphy-like purge[may not be the best analogy off the cuff], but there was so much global and social collateral damage and destruction. So many survived and so many didn't. Even this subject demands serious digging and and responsible scholarship. In the end, it all hurt and no one was immune.
     
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  3. jmudrick

    jmudrick Type A Man

    Of course Gillette's unique position in the early period was unsustainable but Gillette's vulnerability in the 1928-38 period was also a reflection of their own decision making and judgements, not merely a natural progression of unalterable market forces. These were real issues not "issues" and Gillette did reverse its fortunes (despite not being able to get back to its 80% share) from 1939 through changes in advertising strategy, products, and a great deal of help from another World War putting its blades in the hands of new customers to the detriment of its smaller competitors..

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    Last edited: Aug 21, 2019
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  4. Rev579

    Rev579 Well-Known Member

    There were problems with the practices within Gillette, I have no doubt. Industry, as a whole, had serious issues. I think they shared many of the same issues with all of the surviving companies. Fortunately they had some capital and options. Left to their own devices, it could have definitely gone south. I do wonder which problems were essentially unique to Gillette and the Shaving Industry, or if they were some of the typical issues that lead to failure in companies.
     
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  5. jmudrick

    jmudrick Type A Man

    Gillette did have some unique problems and unique opportunities. As the first in, they had enormous capital investment in what by the mid 20s was outdated technology. They could have bought Autostrop for $5 million when first approached by Gaisman in '26 but were in part held back at the prospect of their wasted capital investment.

    Gillette continued to position themselves at the premium end of the market, rather than the value end, and relied enormously on reputation and consumer goodwill, much moreso thsn the myriad small manufacturers churning out cheap blades stealing their sales. The blade problems with the New Improved were the beginning of a long period of dissatisfaction among consumers who Gillette relied upon to pay a premium for their products.

    In Gillette's favor, they had an international reach and operated in a much less competitive environment in Europe, where earnings were able to balance out the marginal profitability of Gillette's US operations during the economic downturn of '29-39.

    And of course their sheer size enabled access to national media which they used to great advantage when they did it it right from '39 , as well as a privileged position when wartime came, tripling profits between 41 and 46 while many of the small producers disappeared.

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    Last edited: Aug 21, 2019
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  6. brit

    brit in a box

    watching and learning..very cool thread gentlemen..
     
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  7. GlennConti

    GlennConti Well-Known Member

    My associate at Procter & Gamble is teasing me with info. He wants my assistance in another matter which may take time. He has all the Gillette company info on the New!!! He are his folders...

    PGC-A.jpg

    Here is a a very early letter from Fahey sometime around their decision to create the New. I'm thinking May 1929...

    PGC-B.jpg

    Here is a letter from Gillette's attorneys probably around early April 1930....

    PGC-C.jpg
     
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  8. jmudrick

    jmudrick Type A Man

    Even censored useful as it establishes different production start dates for blades vs. "New" razors.

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  9. GlennConti

    GlennConti Well-Known Member

    Possibly the new designs of blades were being produced in 1929? We know the razors were getting produced in Jan 1930.
     
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  10. GlennConti

    GlennConti Well-Known Member

    Also, I like the “limiting conditions”. In other words Fahey let his minions do what ever as long as his preconditions were met. Interesting that he was not micromanaging the design or the team.
     
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  11. GlennConti

    GlennConti Well-Known Member

    Also the Fahey memo established that they had a name for the New very early on. Even prior to it’s design. The “New”.
     
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  12. jmudrick

    jmudrick Type A Man

    Yeah I caught that

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  13. GlennConti

    GlennConti Well-Known Member

    Two minor points also...

    1) 1930-March-06 The dealers were already stocked and ready to sell the New Blades and discounting the old blades heavily: (Trenton Evening Times)... That is any competitors with blades that fit the old razors and not the New were going to have a tough time competitively..

    1930-03-06-P23-TrentonEveningTimes.jpg

    And point 2) "A New" (Early March Ads) was already being changed to "The New" (later March Ads) as far as branding... Gillette wanted The New to be the new name.

    1930-03-20-TrentonEveningTimes-TheNew.jpg
     
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  14. jmudrick

    jmudrick Type A Man

    "the New Gillette Razor' does make its appearance though in the March 6 introductory ad:

    [​IMG]

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  15. GlennConti

    GlennConti Well-Known Member

    Agreed but I bet that the headline title "A New" was considered confusing to the Advertising Department at Gillette so they realized their mistake and switched the headline shortly thereafter.
     
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  16. Jayaruh

    Jayaruh The Cackalacky House Pet

    Supporting Vendor
    I love this thread. Very informative.
     
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  17. jmudrick

    jmudrick Type A Man

    You want to get deep in the weeds, we're your guys

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  18. Rev579

    Rev579 Well-Known Member

    This is like finding a Rosetta Stone!
     
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  19. GlennConti

    GlennConti Well-Known Member

    GilletteStockPrice1929-30.jpg

    It looks like the crash of October 1929 had a larger effect on the stock price than anything else. The suit declaration from AutoStrop in early April 1930 got a shrug from Wall Street. Blade prices from 5-15-29 to 2-15-30 are for the 3 hole version. After that they are for the New Blade. The blade prices are from random advertisements in cities on the East coast. I just picked them at random. No real statistical analysis went into it.
     
    Last edited: Aug 22, 2019
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  20. jmudrick

    jmudrick Type A Man

    Wall Street didn't go into full panic until after the NYSE audit uncovered Gillette directors' accounting shenanigans. It was after those disclosures that the stock hit rock bottom at $18.

    Prior to that the stock uptick that took place in summer '30 was attributable to the Directors' purchase of Gillette shares on the open market to help fund the buyout..



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    Last edited: Aug 22, 2019
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