Why Did John Powers Advertise That a Clothing Store Was Bankrupt?

David Senra, reading Claude Hopkins on John Powers, says Powers told a clothing store on the verge of bankruptcy that the only way out was to advertise the truth: the store was bankrupt, and the only salvation was large and immediate sales. The dealers said that announcement would bring every creditor to the door. Powers said it did not matter. Either tell the truth, or he would quit.

The ad said the store was bankrupt and owed $125,000 more than it could pay. It warned that the announcement would bring creditors down, and it promised that shoppers who came and bought the next day would give the store money to meet them. If not, the store would go to the wall. It listed the prices quoted for that situation. Hopkins says truth was so rare in advertising that the announcement created a sensation. People flocked by the thousands, and the store was saved.

Hopkins admired Powers for telling the truth in a rugged and fascinating way, and he treats those principles as still among the fundamentals of advertising. While Powers worked for Wanamaker in the early 1900s, the company paid him $12,000 a year. Senra calls that a crazy high salary.