Why Should White Guys Have All the Fun? by Lewis Reginald

Author:Lewis, Reginald [Lewis, Reginald]
Language: eng
Format: mobi, epub
ISBN: 9781574780536
Publisher: Black Classic Press
Published: 2012-12-18T00:00:00+00:00

THE PRICE ISN’T RIGHT!

One day Lewis was in his office at 99 Wall Street when Earle Angstadt called up and asked to see Lewis right away. Lewis rushed to Angstadt’s office to see what earth-shattering crisis was afoot. An executive with McCall for 14 years and 17 years Lewis’s senior, Angstadt tossed two huge bound catalogues on his desk, where they landed with a resounding thud. The catalogues had “Patterns at 89 Cents” stamped on their covers and were from Butterick, one of McCall’s main competitors.

“They’re running a sale,” Angstadt said plaintively. “The last time this happened, we lost a fortune. We’ve got to meet their price.” The logic behind Angstadt’s argument hadn’t quite registered with Lewis.

“Why?” Lewis asked. “Why do we have to meet their price?” Lewis and Angstadt argued heatedly over pricing, with Lewis adamantly opposed to meeting Butterick’s price and Angstadt all for it. Exasperated, Lewis decided to defer to Angstadt’s years of experience in the pattern business.

“Okay,” he said. “I tried to talk you out of it and I don’t think it makes sense. But if you think this is the way to go, this is the first time I’ve been confronted with the issue. We’ll go with your judgment.”

The move to match Butterick’s prices was a disaster. McCall lost $2 million during the course of the promotion. Lewis was livid. He gave McCall’s executives hell and vowed never to compete on price again.

The next time the pattern industry became involved in a price war, Lewis stuck to his guns. “No, we will not go on sale with those discounts,” he said without hesitation. “I want to show these people that we’re not here to basically cannibalize the industry. I’m not going to meet their sales price—we might lose a little money or not make as much, but I’m not going to lose money every time I sell a pattern. The price of a pattern is such a small price, let’s raise prices some more.”

Instead of lowering its prices to meet the competition, McCall followed Lewis’s suggestion and raised its prices. The move led to a double-digit increase in net sales and a small drop in market share. Lewis was more than willing to accept the tradeoff.

But then, I think the magic started to happen when I sold the organization on some key principles: The name of the game was to hold market share, not increase it at any expense. It was equally important to hold an increased price and moderate the level of increases, and to hold the line on expenses. The earnings started to pop.

Lewis’s decision not to compete on the basis of price and to forsake market share for profit were key moves in increasing McCall’s profitability. And the impetus came not from the company’s seasoned executives but from his own instincts. It was a lesson he would always remember.

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