One morning of the early '90s tenants of the new Pulitzer Building in Manhattan noted a new face at the small cigar stand that crouched between two pillars of the lobby. They noted too that their cigars that morning had a softer feel, a fresher tang. David A. Schulte had begun business for himself and already was anticipating the contentment of his customers. They ought to appreciate fresh smokes, he had reasoned, and quick service and low prices. They did. Now D. A. Schulte Inc.'s retail stores number 300, many of them at locations he himself picked years ago, as he walked up and down Manhattan dreaming of future selling success.
A few years before, Charles A. Whelan and his brother George J. Whelan entered a partnership to sell tobacco at wholesale in Syracuse, N.Y. They had a genius for selling, and so it was not many years before they had built up the United Cigars Stores chain. This chain now numbers close to 3,000 retail stores. Last year they did an $85,000,000 business.
During the same year Schulte retail stores sold $35,000,000 of goods. It would be fine, many an ambitious corporation promoter thought, if these two eminently successful selling organizations were merged. The idea is not new. Five years ago it was presented to Charles A. Whelan and David A. Schulte. Astute men both, they had long known the economies of a merger. But neither would yield the identity of his business. When the proposition was laid before David A. Schulte that he sell out to United Cigars Stores, he replied, in effect, "I'll buy out myself, United Cigar Stores, if they will sell." That meant stalemate. Nor have subsequent merger negotiations come to anything.
Last spring the problem of reducing competition was attacked by another method. The Union & United Tobacco Corporation was formed to manufacture tobacco products and to distribute them wholesale. But the purpose back of this incorporation, the panoramic intent, associates of Charles A. Whelan explained only last week.
Union & United Tobacco will make tobacco products and will distribute them wholesalees and to Schulte retail stores. The two retail chains own their common manufacturer-wholesaler (Union & United Tobacco). As retailers they continue separate. David A. Schulte and Charles A. Whelan remain at the head of corporations their selling geniuses created. There is no merger, just sensible cooperation.