Investor Group Tightens Grip on Christiana
The group of Texas-based investors that last winter bought a controlling interest in Christiana Cos. tightened its grip Monday on the real estate development and retailing company, installing one of its own as president and accepting resignations from six of the company’s 11 directors.
The action came during a board meeting in New York, where the company, formerly based in San Diego, recently moved its headquarters. In a prepared statement, Christiana’s new officers linked the board resignations to the company’s recent decision to branch out into non-real estate areas.
Christiana also reported a $2.3-million loss for the year ended June 30, compared to a profit of $955,000 in the previous year. Revenue dropped 30% to $11.9 million. The loss includes a $2-million charge that covers interest payments on a longstanding Internal Revenue Service claim involving equipment leasing transactions, company officials said.
Veteran Christiana executive Martin Fenton Jr. resigned Monday as president, effective Oct. 29, but will remain a director. Succeeding Fenton as president will be John P. Holmes, an associate of Christiana Chairman John Roberts, the Texas-based investor who owns 39% of the company’s outstanding shares. Holmes said Monday that he owns about 40,000 of Christiana’s 2.4 million outstanding shares.
In August, Christiana expanded from its real estate development base by purchasing F. A. O. Schwarz, a New York-based retailer of expensive toys with about $20 million in sales last year, for an undisclosed amount of cash. The company has about 200 employees at its 22 stores around the country, including a store in Costa Mesa’s South Coast Plaza.
Christiana’s expansion will be in retailing, Holmes said. “We want to build (Schwarz) now and boost the profit margins,” he said. “Then we’re going to expand it.”
Holmes said the company was “very disappointed with the loss--that’s why we’ve changed the direction of the company.” In the fourth quarter, Christiana reported a net loss of $1.6 million, compared to a $325,000 loss during the same quarter a year ago. Revenue, bolstered by a pair of real estate sales, rose 129% for the quarter.
