Patriarch Cuts Wife, Son From Board : Feud: Turmoil at Dart, which controls Crown Books and Trak Auto, concerns analysts.
Herbert H. Haft removed his wife and son from the board of the family holding company Dart Group Corp. on Monday, making them casualties in the widening feud over the leadership of the Washington-area-based retail and real estate empire.
Haft is the 72-year-old family patriarch and majority shareholder of Dart, the multimillion-dollar company that controls the Crown Books, Trak Auto and Shoppers Food Warehouse retail chains.
The action by Haft, who controls 57% of Dart’s voting stock, drastically restructured the boards of Dart, Crown and Trak. It came after two months of acrimony over whether and when Herbert would step down as Dart’s chief executive to make way for the son, Robert, 40.
“I think all of us made every attempt to reconcile them, but you probably needed a psychologist to sort it out,” said a board member who will be departing in the reshuffle. “It transcended business issues. I close my eyes and see two bucks standing at the top of hill with the old one not ready to get out of the way.”
Gloria Haft, who has been married to Herbert for nearly half a century, worked behind the counter when the couple first started out at a single drugstore in Washington. She had served on Dart’s board for more than three decades.
But Gloria, who typically had been quiet in board meetings, angered Herbert when she delivered an emotional plea to him in a May 24 board teleconference to stop fighting and support their son, according to sources close to the board.
Despite losing his important seat on the Dart board, Robert remains Dart’s second-ranking executive and is also chairman of Crown.
Members of the Haft family either declined to comment for the record about the matter or did not return phone calls.
The Crown Books chain has 247 stories nationwide, with more than 95 outlets in Southern California. A major portion of its 319 Trak Auto stores are also in the Southland.
With his latest action, Herbert has shown he is completely in control. Dart released a press release at midday Monday stating that the composition of all three boards was nearly completely changed.
At Landover, Md.-based Dart, which owns majority stakes in Trak and Crown, Herbert is the only incumbent to remain out of what previously was a six-person board. The new board has only three members and includes Herbert; real estate attorney Douglas Bregman, and Bonita Wilson, a Hecht Co. buyer and widow of the late District of Columbia Council Chairman John Wilson.
The current fight may have far-reaching implications for Dart, which employs nearly 10,000 people and is publicly traded, said Wall Street analysts and retail industry executives. It could hurt morale at the company and project an image of instability to the retail community and to investors, they said.
The removal of Robert from Dart’s board was especially troubling to investors, the retail observers said.
“Robert Haft is one of the brighter, more sincere and astute retailers we have worked with over the last few years,” said Gilbert W. Harrison, chairman of Financo Inc., a New York-based investment firm that specializes in retail acquisitions and has worked with both Herbert and Robert in the past.
If Robert were to lose all his positions, Harrison said, “his loss will create a vacuum, which will be difficult to fill.”
Despite such concerns, Dart stock rose $3 a share Monday, closing at $84 in over-the-counter trading.
The impact of the dispute also could be felt within the company. “Eventually, some aspects of a fight filter down into operational levels . . . everything from ignoring a new marketing plan because of the battle to executives who start looking elsewhere rather than picking sides,” said Harold P. Welsch, professor of entrepreneurship at Chicago’s DePaul University.
“Removing a wife and son from a board is a little extreme, so he (Herbert) must have been plenty mad,” Welsch said.
