Shavers Cut

Result of an Alaskan gold prospector's spraining his ankle 28 years ago was the creation of a luxury product with an amazing consumer appeal. The prospector was Jacob Schick. Forced to lie in camp several weeks, he spent much of his time thinking up a way to make some money. Rubbing his stubby beard, he hit on the idea of a mechanical shaver. But Schick electric shavers did not appear on the market until 1931, and these first hand-made models sold at $25. Many a man began to wonder how he had got along without one. When Schicks later went on a mechanical assembly line, the price was cut to $15. Not long thereafter hundreds of thousands of men either had bought the shiny new gadgets or had begun saving their pennies toward that optimum goal. By that time, Schick had several competitors.

In 1933 the prospector-inventor had met a promoter named Archie Moulton Andrews, had been persuaded to let him display the Schick shaver along with his own Lektrolite cigaret lighter at the Chicago world's fair. After a disagreement over distributing rights, Promoter Andrews developed his own dry shaver, the Packard, and began to sell it with noisy ballyhoo. A typical advertisement pictured a small child from behind & below, with a caption: "JUST AN IDEA OF HOW SMOOTH YOUR FACE FEELS AFTER USING A PACKARD LEKTRO-SHAVER." Jacob Schick sued Archie Andrews for infringement of his patent, but he lost, and the number of competitors continued to increase.

Jacob Schick died in June 1937; Archie Andrews in June 1938. But the Schick v. Packard battle went on. Last week Schick shaved its selling price from $15 to $12.50. Packard immediately went its competitor one better by cutting its Packard Shaver from $15 to $7.50, its newer Roto-Shaver from $18.75 to $12.50.

No price war, this was merely revision in line with more efficient production and distribution. In May, FORTUNE estimated that for a $15 Schick Shaver, the motor costs $1 or less; the head, about 50-c-; case, cord and indirect labor, another $1.25; overhead, advertising and sales, perhaps another $2.50. Total costs then amount to about $5, leaving a neat $10 net for dealer and manufacturer. That Schick, first in the field, should lead in price-cutting was no surprise; that Packard, which has always been out to beard Schick, should cut further was no surprise either. Big surprise was that General Shaver Corp., a subsidiary of Remington-Rand Inc., which claims a current sales rate of 1,600,000 shavers per year, announced it would NOT tag along with the others on price revision.

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