Wesley Mann was the President of H E Harris in the late 1970’s and early 1980’s. His background was in finance and he was made the head of what was then the world’s largest stamp company because of his successful corporate career at General Mills, the cereal conglomerate. General Mills had just bought Harris and put in one of their own managers to try to continue Harris’s success and maximize it’s profits. Wes Mann was a very smart, kind and honorable man. But he was not a stamp man and he was given orders from General Mills that reflected a profound misunderstanding of both the stamp business and the reasons that H E Harris had been such a successful and profitable company. What had made Harris so successful (and so desirable) to General Mills was Harris’s fantastic operating profit margins. If memory serves me correctly (and it was 35 years ago) Harris did a bit less than $10 million per year and had net operating margins of nearly 15%. In this day of web companies which have no manufacturing facilities and few employees, 15% margins can seem tame, but in the 1970’s margins like that were impressive. What General Mills’ bean counters didn’t realize was that, though Harris was a very bright stamp dealer and excellent businessman, his margins were the result of having put away an enormous inventory in the 1930’s, 40’s, and 50’s. His huge margins were the result of selling of these low cost goods that were carried on the books at nearly nothing. If that inventory had to be replaced at then current wholesale prices, Harris’s incredible profit margins couldn’t be maintained. Wesley Mann was the unlucky fellow who first realized that what looked like a great buy for General Mills was actually accounting driven not philatelically driven and despite his best efforts Harris never had the profitability that General Mills had expected.
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