Estate of Cyril I. Magnin, Deceased, Donald Isaac Magnin, Executor - Page 16

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          not begin to expand considerably until the mid-1950's, eventually           
          operating 32 stores by the end of 1969.                                     
               In January 1940, Cyril, Joseph, and Mr. Blum formed                    
          Specialty for the purpose of operating a branch store in Reno,              
          Nevada.  At that time, JM lacked the capital to open a new store.           
          Specialty opened a second store in Oakland, California, in 1948,            
          and a third store in Lake Tahoe, Nevada, in 1950.  All                      
          Specialty's stores were operated under the JM name and by JM                
          management, and they had merchandise and customers similar                  
          to JM's.                                                                    
              Whenever possible, JM and Specialty elected to lease rather            
          than own their store locations.  The companies did not have a               
          great deal of available capital, and leasing store locations                
          permitted them to expand.                                                   
               Relevant financial data from the financial statements of JM            
          for the fiscal years ending January 31, 1949 through 1952, are as           
          follows:                                                                    

                  Fiscal Year Ending January 31                                       
          (In Thousands)                                                              
          1949         1950         1951         1952                                 
          Assets                 $1,778       $1,886       $1,983       $2,161        
          Earned surplus            645          749          757          782        
          Sales                   4,994        4,856        5,239        5,591        
          Net income                117           58           41           38        
          Similarly, relevant data from the financial statements of                   
          Specialty for the fiscal years ending January 31, 1949 through              




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