Goliath Has the Upper Sword

Soon after Britain's tiny Wilkinson Sword Ltd. began selling stainless-steel razor blades in 1961, it captured 30% of the British blade market, dominated by Boston's slow-moving Gillette Co. It then moved into the U.S. and bravely challenged Gillette on its home ground. By last year Wilkinson had moved into 50 countries, run up a 1964 pretax profit of $9.8 million and made confident predictions of a 40% sales increase in 1965. It began to look as if tiny David were slaying the Gillette Goliath.

Things have not worked out that way. Wilkinson's sales in 1965 rose about 25%, but its profits are actually down 43% to $5.6 million. Overseas expansion has proved far more costly than Wilkinson executives expected. Last month Wilkinson laid off 250 of its 3,000 employees, is now fighting to stay alive in its home market. London is buzzing with rumors that Gillette is negotiating a takeover of Wilkinson. The rumors are denied by both companies, but they have not given any lift to the 193-year-old saber manufacturer, whose shares have slid from $7.56 when they were publicly issued in April 1964 to $3.50 last week.

Gillette began to fight back in earnest in December 1963, when it entered the British stainless-blade market, launched a major new salvo last September with a massively advertised new blade coating named "Microchrome EB-7." Wilkinson, whose ads seem designed to sell swords as much as blades, still is holding on to its 52% share of the British stain less market, but it has had to lay out needed cash to double its advertising spending. "We made certain forecasts and geared our output to them," says Managing Director Roy Randolph. "Well, it has proved more difficult than we expected. Believe me, though, we don't intend to stand still."

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