Plans for Neiman-Marcus Unveiled
Wall Street’s latest glamour company got its unveiling Thursday with the first extensive details of the new Neiman-Marcus Group that will emerge later this summer.
The specialty store company is being formed as part of a proposed restructuring of Los Angeles retailer Carter Hawley Hale Stores, on which shareholders will vote Aug. 26. Under the plan, Carter Hawley’s three highly regarded specialty stores--Neiman-Marcus, Bergdorf Goodman and Contempo Casuals--would be spun off into the new company.
Reaping a rich reward for their timely rescue of Carter Hawley in recent takeover battles, executives of General Cinema will take over the new company’s four top management spots, according to proxy materials.
The company, based in Chestnut Hill, Mass., will thus add a long-sought third operation to its two cash-cow businesses: movie theaters and Pepsi bottling.
“They’ve got a great situation, and it’s going to make General Cinema look quite different in the next two years,” said Stuart G. Gauld, an analyst with Brean Murray, Foster Securities, an institutional brokerage and money management firm in New York. “Thirty percent of its operating earnings will now come from specialty retailing.”
General Cinema is expected to hold just over 61% of the specialty store company after the restructuring.
In a proxy filing the size of a Los Angeles telephone book, Carter Hawley projects solid growth during the next five years for Neiman-Marcus Group, with sales expected to rise to $1.8 billion in 1991 from $1.1 billion in 1986 and earnings anticipated to grow to $158 million in 1991 from $42 million in 1986.
Richard A. Smith, the 62-year-old chairman and chief executive of General Cinema, will also assume those posts at Neiman-Marcus Group. In addition, three other executives will take corresponding posts at the specialty store company. They are: Robert J. Tarr Jr., 43, president and chief operating officer; J. Atwood Ives, 51, vice chairman and chief financial officer, and Samuel Frankenheim, 54, senior vice president and chief legal officer. The four, all of whom will leave Carter Hawley’s board, will be directors of the new company.
The three divisions will continue to be run by executives already in place.
A newcomer to the world of high-fashion retailing, General Cinema has enlisted three current members from Carter Hawley’s board. They are Jean Head Sisco, Walter J. Salmon and John T. Dorrance Jr. Other outside directors will be Gary L. Countryman, a Boston executive, and Francis C. Rooney Jr., chairman of the executive committee and a director of Melville Corp., a major retailer. The directors’ terms will be staggered.
In the documents filed with the Securities and Exchange Commission, Carter Hawley also listed the 14-member slate of directors for the department store units, including the Broadway, that will remain after the spinoff.
New to the board will be two individuals who have been longtime associates of Carter Hawley Chairman Philip M. Hawley. One is Dennis C. Stanfill, 60, former chairman of 20th Century Fox Film and the man that Hawley, as a director of Walt Disney Co., unsuccessfully backed as a candidate for chief executive of that company in 1984.
The other is Caroline Leonetti Ahmanson, 69, former chairman of the Federal Reserve Bank of San Francisco and a Walt Disney director who is prominent in Los Angeles social circles.
Myron Du Bain, 63, chairman of SRI International, will also join the board.
