Dividends from the Drop

"We don't like recessions," says Francis Rooney, president of Melville Shoe Corp., "but we also know how much they help our business." This spring Rooney's company, which sells a low-price line through its Thom McAn and Meldisco divisions, was helped to a 20% increase in sales over the same period in 1969. Rooney's case is not unusual. Adversity has always smiled on a lucky few, and the present economic downturn that is bringing travail to many companies is pure serendipity for others.

Growing bands of consumers in search of bargains are pushing up sales at cut-rate stores. Kresge's first-quarter volume leaped 23% over the same period last year; J.C. Penney's was up 12%; and Woolworth's latest figures show a 14% rise. In New York City, Alexander's recently posted an 18% profit increase, aided by such promotions as "pre-inflation sales" that offered men's suits for $29. Used-car sales are also brisk, mainly for models costing less than $1,000. Auto-repair volume is up 10% from last year, partly because drivers are trying to nurse one more year from their old models.

U.S. resort operators and others in the home-front vacation business are bracing for a hot season. They expect cost-conscious families to flock to local resorts, which often have been bypassed in favor of far-off places. A need to escape urban tensions inexpensively has led to a surge in camping. Coleman Co. Inc., a manufacturer of outdoor equipment, reports profits up 26% in the first quarter.

Sewing Their Own. Denver's Bride-N-Groom Rental Salon is swamped with orders from women who do not want to spend $200 for a wedding gown. Sales at Chesebrough-Pond's, a producer of moderately priced facial creams and toiletries, increased by 13% in the first three months of 1970. Many women are putting off buying new summer wardrobes and instead are making clothes for themselves. Volume is ahead 80% at Discount Fabrics Inc., a chain in the Pacific Northwest and Alaska. Just as women are sewing their own clothes, they are also growing their own food. Manhattan apartment dwellers are planting tomatoes in boxes on their terraces. Oregon's Chas. H. Lilly Co., a seed wholesaler, reports that an unexpected run on corn, beans and squash has all but depleted supplies. "You get the feeling," says Proprietor Walter Zenner, "that the people are determined to beat the high cost of living even if it means getting their fingers dirty."

Discount food stores have never done better. Demand for hamburger is so pronounced that prices have risen 11% in the past twelve months. Snack sales are also on the rise. Smoke-Craft, a producer of low-cost pepperoni, beef jerky and other snacks, showed a sales growth of 85% in the last report. Lower-priced alcoholic drinks are moving nicely. U.S. brewers predict a record 120.6 million barrels of beer will be downed this year. Though oenologists may wince, wine merchants are doing well with 99-c- "California Liebfraumilch."

Off to the Races. No company loves misery, but the economic slump can take strange twists. An official of the William J. Burns International Detective Agency explains: "When managers think that employees know there will be layoffs, they don't want the help taking the plant home with them. That means business for us." The Thoroughbred Racing Associations report that more people are betting bigger sums at the race tracks. Some are undoubtedly seeking relief from their anxiety, while others are looking for that big long-shot win. Last week casinos in Las Vegas, Reno and other Nevada gaming centers reported record first-quarter earnings of $133 million, an increase of 19%.

As usual in tough times, the pawn business is thriving. At Kaskel's, a tony Manhattan hock shop that caters to the sometimes rich, business has expanded 20% in the past few months. "We could have increased it by 100% if the funds were available," says Richard Kaskel. "We are getting ten to twelve calls a day from people looking for loans of $20,000 to $50,000 on their jewelry. The demand for money is so very high that it is ridiculous."

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