Sigoloff Tries Another Rescue; Will Take Charge of Ailing Retail Chains

Sanford C. Sigoloff, the peripatetic turnaround artist who rescued Wickes Cos. only to surrender the company to new owners four years later, on Wednesday took over management of L. J. Hooker Corp.’s troubled U.S. retail chains.

The announcement was made as the U.S. unit of Australia-based Hooker Corp. filed for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code.

L. J. Hooker operates about 100 specialty apparel and jewelry stores that last year had sales of $550 million. In addition to Bonwit Teller and B. Altman, it owns Merksamer, a jewelry chain based in Sacramento, and has majority holdings in Houston-based Sakowitz Inc. and Parisian, a specialty chain based in Birmingham, Ala. It also develops malls and owns commercial and residential properties. The Chapter 11 filing covers B. Altman and Bonwit but excludes the company’s other retail chains.

Sigoloff, whose stern voice and lean figure were familiar to Southern Californians from his “We got the message, Mr. Sigoloff” ads for Wickes’ Builders Emporium chain, has proven himself an ace in past efforts to salvage debt-laden companies. In addition to Wickes, based in Santa Monica, he helped resuscitate Republic Corp. and Daylin.

Left Other Firms

However, despite his tough successes and nickname as “Mr. Chapter 11,” Sigoloff has not been able to follow up his rescues with any long-term stints as chief executive in non-crisis situations.

After two years at Republic, where he sold more than 50 money-losing divisions, he departed after disagreements with directors. Later, he left Daylin, the first company he brought out of Chapter 11, when the Los Angeles-based retailer was bought by W. R. Grace & Co.

At Wickes, Sigoloff brought the company out of Chapter 11 in 1985, in a relatively speedy three years during which Sigoloff and his managers often worked 18 hours a day, seven days a week. They transformed it from a retailer to a diversified consumer and industrial products company. But Chairman Sigoloff proved unable to boost the company’s flagging share prices, and shareholders grew restive.

Last fall, Sigoloff and other managers briefly attempted a $574-million buyout of Wickes until they learned that operating income would be sharply lower than expected. Two investment banking firms--Blackstone Capital Partners and Wasserstein Perella & Co.--then leaped into the breach, offering $538 million.

Sigoloff, who turns 59 next month, left in December and has since been traveling and lecturing in addition to looking for a job.

With other former Wickes managers, he recently formed Sigoloff & Associates, a management consulting firm based in Santa Monica. Sigoloff heads the company’s crisis management group.

He was running a seminar in New York about a month ago when he was approached by the Hooker people.

Initially, Sigoloff said in a telephone interview from New York on Wednesday, he offered to help out with some “crisis management.”

Two days ago, negotiations escalated. “Last night for the first time, we had a meeting (to talk about the company’s) past and future,” Sigoloff said. He agreed to take over management of the debt-burdened concern, although he intends to continue living in West Los Angeles.

“It has interesting assets,” an ebullient-sounding Sigoloff said of L. J. Hooker. Of all the troubled companies he has been asked to manage, he added, “this is probably the one I enjoy taking the most.”

Sigoloff on Wednesday spent his time cloistered with lawyers, reviewing the company’s books and the progress of negotiations for asset sales. He added that “I have not even been into a B. Altman or a Bonwit” to see how the stores look.

He said he has been told, however, that while Bonwit has been able to keep an “orderly merchandise stream,” Altman is dangerously shy of fall and winter merchandise and is “seriously in jeopardy.”

The Chapter 11 filing capped weeks of tense controversy between Hooker and its U.S. creditors and vendors. The company has operated in a crisis mode, as many manufacturers complained of slow payment and refused to deliver goods.

Lenders, meanwhile, last month negotiated a four-month moratorium during which Hooker would pay interest but not principal on its $1.2 billion of debt. A court in Australia appointed a provisional liquidator to manage the Sydney-based parent.

Prompt Action Needed

A week ago, Hooker advisers flew to New York to negotiate with lenders but were unable to reach an agreement on a plan to restructure the debt.

Observers said lenders apparently were appeased by the decision to put Sigoloff at the helm.

In a statement, Sigoloff sought to reassure Hooker employees.

“It is important for everyone to understand that Chapter 11 does not mean we are going to close all of the operations . . . or that all Hooker employees are going to lose their jobs,” he said.

In the telephone interview, Sigoloff left open the possibility that some of the assets, including some of those not covered by the Chapter 11 filing, would be sold. Under the management arrangement, Sigoloff & Associates will run the entire company.

Retail observers praised the naming of Sigoloff, noting that his first task should be to sharpen the marketing focus for B. Altman and Bonwit.

“I think it’s a very positive sign,” said Ann C. Hunt, a vice president and retail partner at Korn/Ferry International, an executive search firm in New York. “I think Sandy Sigoloff has a track record on going in and dissecting companies.”

Thomas H. Tashjian, vice president of retail trade for Seidler Amdec Securities in Los Angeles, said Sigoloff should have a shot at turning around the hapless company because B. Altman and Bonwit Teller are well-known names with good real estate holdings.

“I think there’s a great opportunity with the franchises,” he said. Given L. J. Hooker’s widespread woes, however, “one could see that maybe he’s not going to keep the entire stable.”