Carter Hawley Operating Net Jumps in Year
Carter Hawley Hale Stores, showing signs of recovery after taking on massive debt in a major restructuring, reported a 31% gain in net operating earnings in its fiscal 1989, excluding non-recurring items.
However, including all special one-time charges and items, net earnings fell 23.7% to $13.5 million in the fiscal year ended July 29.
The Los Angeles-based owner of the Broadway and other retail chains said net earnings from operations--excluding all non-recurring special items--totaled $11 million in fiscal 1989, compared to $8.4 million in fiscal 1988.
Operating earnings--excluding interest expenses and taxes--rose 14.3% over 1988 to $172.8 million. Sales totaled $2.79 billion, a 6.5% gain over fiscal 1988.
‘Showing Improvement’
The gains in sales and operating earnings reflect improvements in store management at the retailer, which is in its second full year of operations since taking on huge debts in a restructuring, said Sarah Stack, an analyst at the Los Angeles brokerage of Bateman Eichler, Hill Richards.
“They’re showing improvement,” Stack said. “They’re achieving good control of their operations and generating a higher return on sales than they have in the past.”
The company lost $178.7 million in 1987, largely because of costs related to the restructuring, in which it spun off three specialty stores to thwart a takeover bid by the Limited, a specialty retailer based in Columbus, Ohio.
The stores--Neiman Marcus, Bergdorf Goodman and Contempo Casuals--were put into a separate public company controlled by General Cinema Corp.
Carter Hawley Hale’s fiscal 1989 operating earnings were affected by a $6-million pretax charge stemming from the closing of its Market Services office, a division that developed private label merchandise. The company also had an after-tax charge of $9.2 million from expenses related to establishing a financing corporation for its department store credit card operation. A change in financial accounting in 1989 produced an after-tax credit of $15.3 million.
