Vertically stacked letters, a common treatment a century ago, is not a preferred layout technique for sign work.
Though sometimes requested by clients, stacking letters vertically is not only awkward-looking but it compromises legibility. As explained by typographer Ellen Lupton in Thinking With Type, “Roman letters are designed to sit side by side, not on top of one another.” If it is necessary to stack letters, they should be all capitals. Lower case letters treated this way take on a precarious look that is visually unappealing. It also helps to carefully adjust the centering optically of each letter.
A simpler and more readable solution for a narrow vertical format is to rotate the entire line of text. A vertical axis is thus achieved, but the natural relationship of the letters sitting on a common baseline is preserved.
Does this mean that letters should never be stacked? No. In fact, sometimes this treatment is an easy way to achieve a retro look. But it should be used judiciously and with an awareness that it can limit readability.
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Ellen Lupton is a designer and educator, and the author of several books on design. Thinking With Type by Ellen Lupton (second edition)