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The now "complete" set of Gruen Annual Reports 1936-1956
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Author:  MikeTheWatchGuy [ Wed Jan 11, 2017 10:24 am ]
Post subject:  The now "complete" set of Gruen Annual Reports 1936-1956

I'm very happy to say that we now have ALL of the annual shareholder reports from The Gruen Watch Company spanning from 1936 to 1956. While we don't have a lot of the early "Guild" years, we at least have from the first generation Curvex up through the mid-1950s meltdown.

A very helpful reader (I call him Mystery-guy-Steve) provided me with the 9 missing reports. Noteable within these are the mid 1950s (1954-1956) which paint a much clearer picture of the business problems Gruen was experiencing, and not doing a very good job of handling, sadly. The number of pages almost doubled to 342 pages.

You can read more about them and download the complete set as a single PDF file by visiting the Gruen Annual Reports page.


What I like about these reports is that we get the facts that explain what have been previously rumors or guesses. One to check out is the "Katz payoff". The Gruen mythology talked of scandal and payoffs of Katz as if a shady event, when in fact it's all right there in the numbers. I'm tempted to say it's no difference from a "Severance Package" today, but in reality today's numbers are inflated 10 or 20 times what was normal then.


I invite those with a background or knowledge in business to PLEASE take a look at the financials and tell us the story you see in the numbers!!


One nice little nugget of information I was able to dig out was FINALLY a number that is specific to number of watches sold or shipped. We still don't have a great handle on the concrete number of watches Gruen was selling and shipping. While the sales numbers are all there, they don't give us information on quantities of watches made or sold.

Check out this paragraph from the 1947 report...
1947 Annual Report Paragraph.png
1947 Annual Report Paragraph.png [ 310.91 KiB | Viewed 294 times ]

In this report they are stating that over 18 months from 1945 through April 1947 there was $3.5 Million in sales of the Curvex Executive. The retail price of the Curvex Executive back then was $200. With a little math that came to 972 per month or 11,667 per year. While this is only ONE single watch model, it's at least a number.


See what you can dig out of these pages and share it with everyone!

Author:  Barney Green [ Wed Jan 11, 2017 12:55 pm ]
Post subject:  Re: The now "complete" set of Gruen Annual Reports 1936-1956

Great stuff and thank you very much, Mike, for again sharing your valuaboe documents with us.

Regarding the financials for the leave of Mr. Katz I read the documents as it might not have been that expensive to get rid of Mr. Katz. This is from the 1944 report but you find it mentioned in almost every single one starting 1941:

Note 4—Insurance policies on the life of Benjamin S. Katz, President, aggregating
$750,000 have been assigned as collateral to notes payable, bank, aggregating $2,000,000.
At the option of the bank the notes may become due and payable on demand in the
event of the retirement of Benjamin S. Katz as an executive of the company.

The sum varies overt time.

The final note is this:

5. During the year the Company acquired for its
treasury 88,230 shares of its common stock, representing
all of the Company’s shares owned by the former
president of the Company, Mr. Benjamin S. Katz, members
of his family, the Benjamin S. Katz Family Foundation,
and the Trustee under a trust created by Pearl M.
Katz. The total cost of these shares to the Company, the
settlement of an employment contract with Mr. Katz and
claims of himself and members of his family, amounted
to $2,197,520.
Simultaneous with the acquisition of these shares the
Company transferred to the sellers or other lineal descendants
of members of the Katz family all life insurance
policies owned by the Company on the life of
Benjamin S. Katz, the face amount of all such policies
aggregating $1,800,000. The Company received as payment
therefor the cash value of all such policies as of
the date of transfer.

What I read from this is that the insurance paid $1.8M and the company "only" the balance of $397,520.

Author:  MikeTheWatchGuy [ Wed Jan 11, 2017 1:49 pm ]
Post subject:  Re: The now "complete" set of Gruen Annual Reports 1936-1956

Fantastic stuff!

Still on the Katz subject, I didn't realize the "family" involvement until I read the parts you pulled out. I wondered about why they talked about his "family" rather than Ben Katz the individual.

Well, turns out there's an explanation for this, also found in the company reports.

There are multiple Katz in Gruen... thanks to these reports, the Katz is out of the bag! :lol:

The Katz family at Gruen included:
Benjamin S. Katz President and Treasurer
Ira R. Katz (son) Vice President
Mr Abraham S. Braude (son-in-law) VP of Sales

I read in 1953 that they promoted Mr. Braude to VP from a Director of Sales position. So there were 3 Katz family members holding Director

And when one Katz left, all the Katz scattered and left too. This announcement was made in the 1953 report...
Annoucement of Katz resignation.jpg
Annoucement of Katz resignation.jpg [ 104.41 KiB | Viewed 282 times ]

These positions gave the Katz's a sizeable amount of control since these are Officers of the company. Interesting that Mr. Braude was promoted just in time for departure from the company.
And it's interesting that all 3 quit together.

If you're looking for a "scandal", then perhaps these maneuvers could be considered to be shady in the minimum.

Good stuff these reports!!

Author:  Barney Green [ Wed Jan 11, 2017 2:04 pm ]
Post subject:  Re: The now "complete" set of Gruen Annual Reports 1936-1956

So it was in fact even cheaper to get rid of him as an individual since the money included the package for the whole family!

Funny to see that the "The cat is out of the bag" seems to be exafcly the same idiom as in German?!?

Author:  MikeTheWatchGuy [ Wed Jan 11, 2017 2:34 pm ]
Post subject:  Re: The now "complete" set of Gruen Annual Reports 1936-1956

Oh wow, you are right! They managed to dump THREE officers for the price of ONE. That's really interesting. Did anyone else know about this family setup within Gruen?? I don't recall it being pointed out anywhere. It seems sort of like a big deal with the president brings in his son and makes him VP and also hires his son-in-law and makes him a Director, and eventually VP.

I can find no mention of Ira Katz in ANY of my Gruen stuff, except for these company reports. Not the employee magazines, none of the NAWCC issues, etc.

Author:  MikeTheWatchGuy [ Thu Jan 12, 2017 3:04 pm ]
Post subject:  Re: The now "complete" set of Gruen Annual Reports 1936-1956

In addition to the new information, the reports also have some nice artsy illustrations and photos.

Here are a few drawings and photos that I liked from the most recent additions. I put one of them on the GW homepage already.

1948 Spooky Time Hill.png
1948 Spooky Time Hill.png [ 165.75 KiB | Viewed 255 times ]
1946 Gruen Building Drawing.jpg
1946 Gruen Building Drawing.jpg [ 637.7 KiB | Viewed 255 times ]
1946 Shadow Cover.jpg
1946 Shadow Cover.jpg [ 119.51 KiB | Viewed 255 times ]
1955 Gruen Staircase Image.jpg
1955 Gruen Staircase Image.jpg [ 497.73 KiB | Viewed 255 times ]

Author:  thojil [ Sat Jan 14, 2017 9:50 pm ]
Post subject:  Re: The now "complete" set of Gruen Annual Reports 1936-1956

Great stuff Mike. When I have some time again I will start reading.

The 1946 drawing of the factory is interesting. The first time for me I see an image of the full factory. Sofar I only found pictures of the offices.

Author:  18kBPH [ Sun Jan 15, 2017 8:12 am ]
Post subject:  Re: The now "complete" set of Gruen Annual Reports 1936-1956

Something interesting contained within the 1954 Annual Report:

"...When the new management took over last Fall, it was confronted with the consequences of prior planning which had been far too optimistic. Even while watch sales were declining in the Fall months, plans had been laid and commitments made on the assumption of a large increase in watch sales in 1954. Throughout the preceding portion of 1953, firm orders had been placed by our wholly-owned Swiss subsidiary for materials and parts for a large increase in production of movements and with our domestic suppliers for quantities of cases and accessories running even beyond requirements for a volume of sales larger than had ever been achieved in any prior year..."

I am not a business analyst, but this could be interpreted by a Gruen shareholder as an accounting scandal. If this was true, perhaps it could explain the sudden resignation of 3 Gruen executives.

Author:  MikeTheWatchGuy [ Sun Jan 15, 2017 9:35 am ]
Post subject:  Re: The now "complete" set of Gruen Annual Reports 1936-1956

Nice find among the chaos.

I'm in the process of putting together some graphs of Gruen's business performance over time since we now have a complete picture. Maybe it'll show something that is not already evident in the text.

I'm not sure if making horrible business decisions was enough to be considered a "scandal". Maybe there was or wasn't one, it's gonna be difficult to say unless we uncover the backup of their email server ;)

I do believe there's something pretty fishy about all 3 Katz's being canned. It's one thing for President Ben to make overly optimistic bad decisions, the board decide new leadership is needed, and fire him. It's a completely different thing with The President, the company VP, and the NEWLY promoted VP of Sales to all leave at the same time.

You would think that newspapers from that time would hold some answers. I haven't done an exhaustive search through newspapers to see if they picked up the story.

It's one thing for "Gruen and Son" to be in business together as father and son, and something completely different when an appointed/hired President to then bring in his son and son in law. I've seen these kinds of family dynamics in the executive ranks in a couple of the companies I worked for in Silicon Valley. Even if there's no favoritism, the employees are hyper-vigilant in looking for improprieties and sadly, more often than not, there was almost always some amount of nepotism in these situations.

If the board wanted to really "clean house" of the management team that made the bad business decisions, I would expect some non-Katz people to get sucked into fun as well.

It does seem odd that the "Katz Family" was mentioned in the company reports. Maybe things were different back then. I'm not sure but it seems like Ben Katz got all the money and stuff on the way out and the other two were not compensated on their way out. At least with President Katz they had been planning for his departure almost from the day he was hired. You see the insurance bring brought forward and added to in each of the Annual Reports.

Keep digging! Great finds so far!

Author:  MikeTheWatchGuy [ Sun Jan 15, 2017 9:36 am ]
Post subject:  Re: The now "complete" set of Gruen Annual Reports 1936-1956

thojil wrote:
Great stuff Mike. When I have some time again I will start reading.

The 1946 drawing of the factory is interesting. The first time for me I see an image of the full factory. Sofar I only found pictures of the offices.

Right! I jumped when I saw that drawing in the middle of one of the reports. The reason it's not 100% complete is there was text on the page in addition to the building. The building was sort of a backdrop on the page. But it does look quite detailed and likely accurate. Still pulling out more and more stuff from the pages......

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