Pacific Lighting Adopts Name to Reflect Diversity : After 102 Years, Firm Aims to Enhance Recognition of Non-Utility Subsidiaries

Pacific Lighting Corp. executives figured they had a problem.

The 102-year-old Los Angeles-based company’s name doesn’t spark the same kind of recognition as some of its subsidiaries--the Southern California Gas utility, the Thrifty drugstore chain and Big 5 Sporting Goods.

And the name confuses some people. Only last week, two Pacific Lighting officials attending a seminar were mistaken for manufacturers of lighting fixtures.

So on Tuesday, with little fanfare, the $5.3-billion company is changing its name to Pacific Enterprises to better reflect the diversification that it has been pursuing since the 1960s.

“The name had become inappropriate, and I think Pacific Enterprises, although it is somewhat general, is more descriptive of the company because we don’t make lighting fixtures and we’re not an electric utility,” Chairman Paul A. Miller said. “It’s more descriptive--or less un-descriptive, maybe.”

Didn’t Hire Consultants

The soon-to-be former Pacific Lighting did not pick its new name by hiring high-priced consultants, said Executive Vice President Willis B. Wood. Instead, company executives got together at a few meetings and brainstormed on a new handle for the company.

“We decided we could do it as well as anybody outside,” Wood said. “It’s tough to come up with a name that everyone says is wonderful but nobody already has.” The company also wanted to avoid “alphabet soup” names or made-up words, he said.

The name change will cost $700,000 to $750,000, which is relatively inexpensive, Wood said, because the holding company’s name is not displayed on trucks that must be repainted or on any large signs. A few advertisements will announce the switch to Pacific Enterprises. The ticker symbol will become PET.

“From our standpoint, it really is the indication of a change of an era,” Wood said.

Pacific Lighting was a fine name in 1886 when Paul Miller’s grandfather, C. O. G. Miller, and Walter B. Cline founded the company in San Francisco to rent a new kind of gas light for streets and businesses.

The company expanded rapidly into gas distribution, eventually buying Southern California Gas, and moved into the electric utility business in 1937. Pacific Lighting later got out of electric utilities and in 1960 started diversifying by incorporating a subsidiary to explore for oil and gas.

Focusing on Core Businesses

Pacific Lighting, which moved its headquarters to Los Angeles in 1967, further diversified into land development starting in 1969. The surprise purchase of Thrifty Corp., with its Big 5 and other sporting goods subsidiaries, came in 1986. And last year, Pacific Lighting sold its successful land development operations to two investor groups.

The new Pacific Enterprises will focus on expanding its existing businesses, particularly specialty retailing and oil and gas, Miller said. The company’s stated goal has been to earn half of its net income from non-utility operations.

In 1987, the company reported record net income of $251.2 million, compared to 1986 net income of $83.6 million, which included a $118-million after-tax writedown in the book value of its oil and gas properties. More than one-third of net income in 1987 came from the non-utility businesses. Revenue held steady at about $5.3 billion.

“We would like to have the others where growth is occurring more than the utility, because utility growth is limited by population growth,” Miller said.

“We see for the present and the next very few years, we probably won’t go into any other kinds of businesses,” he said. “We don’t want to be a conglomerate.”

Herbert Hart, who follows Pacific Lighting for the investment firm S. G. Warburg & Co. in San Francisco, said the diversification has worked out well “because the big engine, the utility side, is flat and probably will continue to be because of the lower rate of return” authorized late last year by the California Public Utilities Commission because of falling interest rates.

“There was an obvious problem in the oil and gas sector when oil prices went south in 1986,” Hart said. “That seems to be coming back nicely,” and the company has done a good job replacing reserves. Hart said the company probably will make an acquisition in the oil and gas area to continue growth.

Last of the Family Leaders

“The basic idea of getting into specialty retailing was a good one,” Hart said. “The Thrifty operation, from all indications, is right on schedule, and I think that’s turned out to be a very positive thing.”

Miller, 63, by company policy will be the last of his family to head the firm. He said he did not regret changing Pacific Lighting’s name.

“No, because I haven’t been around for 102 years,” he said. “We demonstrate how modern we are by changing our name every 102 years.”